Thursday, May 7, 2009

Darwinian Socialism

Or Socialistic Darwinism. Either way you write it, the phrase seems perfect for our current times.

"Too big to fail" is the buzz phrase of the recession and will likely outlive the recession and become a part of our national consciousness. It is no doubt the reason for the majority of the troubles of this recession and should serve as a lesson for the future. We learned a great deal from The Great Depression, and with the precautions we took afterward, may have averted the full-blown second one, but in the meantime, we have created a lengthy, prolonged, deep, and slow-to-rebound recession, coined colloquially as The Great Recession. No doubt we stand to learn a lot from The Great Recession, mainly how 'too big to fail' is 'too big to be any good.'

Bailouts, TARP, stress tests, etc. etc. etc. The list goes on, perhaps infinitely, as we continue onward in the restructuring of the American economy, and therefore the world economy, and begin to unravel the thick web of deceit, greed, and uncontrolled/unchecked capitalism that spurred the catastrophes we witness daily. All of it caused by companies becoming too big to fail. The too big portion is easy to solve: break off portions of each too-big company and spur new investments in off-shoots of the company--less fundamental portions (for instance Countrywide could stand again on its own should BofA want to rid itself of it) that will be profitable on their own. The 'fail' part is a bit trickier.

The blog title and phrase is extremely funny, and did appear in the New Yorker, but besides the glib and humor, there is a resounding ring of truth to it.

In Darwinism, the fittest survive, and the weakest (no matter how large) will perish. That is more or less how capitalism would like to believe it is run, but the evidence is always pointed to the contrary as merger & acquisition, layoffs, and huge severances prevent the sort of 'eradication' or 'extinction' you would expect to see if capitalism were working wholly and faithfully. Instead it seems the common man, the less influential portion of the 'too big' always seems to be the one that fails. That would be the equivalent of the ticks dying instead of the T-Rex. (Stick with me here, I know the analogy is convoluted, but I promise I'm not referring to entry-level workers and blue-collar workers as 'ticks' for no reason.)

When a company the size of CitiGroup implodes and needs billions of dollars to stay afloat, never mind return a potential profit again in the end, there should be a few things in 'true' capitalism that would occur. The causes of the meltdown would become extinct. That means any upper management, executives, board members, presidents, etc. would be ousted and fired--without severances and without bonuses. Everyone on the lower end of the totem pole would be promoted and would restart the company, minus the dead weight or those with negative influence who drove the company into oblivion. Sounds more fair, but that will never happen.

So, we get socialism, in which the company (and the government) attempts to do what is best for everyone, not just the lowly workers and not just the highly paid executives. It attempts to plug the leak quickly and keep the sinking ship afloat (even if it means draining the water from the ocean instead of letting the ship go down--see, I told you the metaphor would work!!). The majority is saved, which is socialism, as opposed to Darwinism. But only certain companies are saved: Bye Bye Bear Stearns. Who will buy Merrill Lynch?! Anyone?! The aforementioned others saw worse fates. And what is doubly troubling is that the majority of executives who did lose their jobs were either hired by different companies or have so much money that working for them is an option for the time being.

Now the lowly workers, AKA me and anyone else making less than $100,000 year (including their bonuses), who should have been promoted and should never have been fired under any circumstances, are let go and the company continues with the same damaged portions that caused its downfall to begin in the first place.

Seems backwards, doesn't it? Well that's Darwinian socialism. Survival of what's best for everyone, but only what is more or less arbitrarily chosen to be the fittest of what's best for everyone. Yes, seems odd. Now social Darwinism is a bit different: that means there are certain species that should become extinct, but we artificially repopulate these species until their numbers are great enough to survive on their own again.

Too Big To Fail. Socialism and Darwinism mixed.

Oh, what a wonderful world...

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