Too Big To Fail

I’ve been hearing that phrase a lot lately.  AIG is too big to fail.  Got me wondering what that means, frankly.  And also what the cultural implications are.

I wonder if anyone said the Titanic was too big to fail.  Or the World Trade Center.  Or America.

Context is everything of course.  I think what they mean nowadays is that a company or operation is too big to ALLOW it to fail.  Apparently AIG was so big that if it were to just stop, there wouldn’t be enough insurance companies in the world with enough assets or whatever to take up the new business.

But I have contended that AIG, GM, banks, the real estate market, the stock market (fill in whatever company or business you want to here) or at least those at the top rungs in these operations saw it another way.  They got so big that they believed that “Too Big To Fail” started to mean “Too Big For The Government To Allow To Fail.”  And I’m not just talking about the economic implications either.  I’m talking about self-importance.  “I’m too big for you to let me fail.”

These are tough times for a conservative like me.  The republican in me wants to encourage wealth-building and discourage government interference.  If you have been around me recently, you have probably heard me repeat the mantra about the dangers of letting the same government who has bankrupted social security and routinely spends far more than they take in on stuff that they have no Constitutional power to meddle in anyway, take care of anything like healthcare.  Is it possible to run a company as ineffeciently as they run our government?  I would say no, but sometimes I wonder.  Isn’t that exactly what these companies that are getting the bailouts did?  Maybe not exactly, but pretty close?

I mean let’s face it: at some point, some of this “investing” had to have gotten so risky that SOMEONE had to have at least whispered, “Boy, I hope this all hits the fan AFTER we get rid of this stuff.”  My guess is that all that “risk” was managed very carefully until it got so “big” that they knew there was no risk anymore at all.  Once it got so big that we couldn’t let it fail.

And here is the problem, and where unfettered capitalism turns into something else.  Allow me to put on my Zen hat for a minute.  You see in the universe there are equal an opposing forces that keep things in balance.  Light and darkness.  Good and evil.  Liberty and accountability.  Sowing and reaping.

Risk and reward.

I hold no bad feelings for people who have attained wealth and success in America because I believe that except for the occasional aberation those people get that way the old fashioned way, by working hard, being frugal, and taking risk.  But like I said before, some of these companies and industries allowed themselves to get to a point where the risk part of the equation started to erode.  Or at least appeared to erode.  I contend that the risk was really there all along, and still is.  It just got passed to someone else.  Me.  Okay, and you too.

That’s where culture comes into play.  You see, when one guy gets all the reward but another gets all the risk, there is still balance, but it is “unfair.”  We have a mechanism in America that is there to keep this from happening, called the judeau-christian ethic.  If you don’t like the religious implications, surely we can agree on another way of talking about it: treating others as we would want to be treated.  It’s that sense of fairplay we are supposed to learn on the playground.  Remember when cheating was frowned upon?

Jesus warned us about loving money more than people.  Frankly, he more than warned us about it.  He admonished us about it.  He reminded us that some day we were leaving this world for one far greater where we wouldn’t need money or wealth.  That true wealth was stored in Heaven as was accumilited by serving others.  That model used to be the model for earthly wealth: wealth was acquired in direct proportion to our ability to serve others (by manufacturing a good or providing a service that improved someone’s life in some way, and charging a price that they could/would afford to pay.)  I’m afraid it isn’t the model today, and it means some dire consequences for all of us.

You see, I believe what we are seeing in the economy now is a symptom of a larger problem.  Our eroding economy is a symptom of our eroding culture.  And while the government senses that there is a gap of sorts, they think it is a financial gap and has decided to throw money at it. All the while it is really a gap in morality.  Throwing TRILLIONS of dollars into the economy might stave off the economic collapse for a time, but until someone throws some morality into the culture, we are as doomed to failure as a crack-head who wins the lottery.  He’ll squander the money on what is important to him, just as the “fat cats” in the troubled industries will squander the bailout money-and have.

That’s where you and I come into the picture, and why government can’t solve this problem.  Morality starts in the living room and works its way up.  This where my liberal friends and I should be able to agree.  They are the first to warn that you can’t legislate morality.  I agree.  Government is a reflection of the people.  If they are screwed up…well, you get the picture.  So, what do we do?  I’ll tell you.

First, we get it into our thick brain buckets that there is no such thing as a free lunch.  For every action, there is an equal and opposite reaction.  There are no “victimless crimes” and when one person cheats, at least one other person is robbed.  If doing the right thing isn’t satisfying on its own, then remember that what goes around comes around.  Anytime we are offered something for nothing, we should hear alarms and see red flags waving…and pay attention to them.

Next, we start conduction ourselves morally.  Doing the right thing because it is the right thing to do.  No, we won’t be perfect at it, but we should try.  This goes a bit beyond “not doing the wrong thing because it will be painful if it doesn’t work out” and leans more toward “doing the right thing even though it seems painful as we do it.”  It might help to remember the deal about a life after this one, where your true treasures are collecting.  Sorry if that is too religious for you, but you’ll probably need a bigger reason than “feeling good” to be successful at it.  If it helps, think of it this way: it’s like being greedy in a good way.  Do good here and you get something for it later!

Finally, let’s start holding people, companies, and industries accountable to more than the bottom line.  Let’s start supporting companies that do the right thing morally.  Even if it costs a little more in the long run.  Remember, no pain means no gain.  Another one of those zen, yin yang laws of the universe.

Adding the moral quotient into the free market capitalism equation is absolutely necessary, and must come from the living room for it to effect the board room.

That’s my two cents.