The Boston Globe
Hanging the little guy out to dry
By Joan Vennochi
September 21, 2008
WHEN YOU are too big to fail, you are bailed out.
When you are too small to save, you are down and out on the street.
Some aspects of the Wall Street crisis are tough to understand. But one economic principle is pretty clear.
When a really big company goes bust, the little guy pays with his home or job. But those CEOs and money managers who boldly march their corporate empires into bankruptcy just get paid millions and millions of dollars more.
From Washington, inconsistency is the policy order of the day.
President Bush lurched briefly into the spotlight, turning from a repressed memory into a poor excuse for a Harvard MBA.
In just the past week, the federal government let Lehman Brothers Holdings Inc. fail; applauded a merger between Merrill Lynch & Co. and Bank of America; then turned around less than 48 hours later to bail out insurance giant American International Group Inc.
Before that, bailouts rescued Bear Stearns, Fannie Mae, and Freddie Mac. Each was deemed too big too fail.
But no one wants to help taxpayers who are losing homes and jobs. In the grand scheme of American capitalism, they are overreaching specks, too stupid, presumptuous, and inconsequential to spare.
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