30 May 2009

Why we are not surprised

Andy Kroll writes:
What cannot be disputed, however, is the [US government] financial bailout's biggest loser: the American taxpayer. The US government, led by the Treasury Department, has done little, if anything, to maximize returns on its trillion-dollar, taxpayer-funded investment. So far, the bailout has favored rescued financial institutions by subsidizing their losses to the tune of $356 billion, shying away from much-needed management changes and--with the exception of the automakers--letting companies take taxpayer money without a coherent plan for how they might return to viability. The Greatest Swindle Ever Sold, 'The Nation', 26 May
So why are we not surprised? The compelling reason is that there is no compass to give the bailout any meaningful, coherent, direction, unless it is simply to shore up the short-term prospects of the politicians in power and the most powerful interest groups. Ordinary people are well down on the list of things to worry about. It is this indifference that has characterised policymaking for many decades. Time was, though, that there was a reasonable correlation between the interest of powerful lobbyists and the wellbeing of the general public. Over the years, as inequalities have widened and society become more complex, that correlation has weakened. Bailouts to big business at the expense of society and the environment - the corporate-welfare state - are the result.

Social Policy Bonds would make passing this sort of corporate subsidy programme more difficult. They would subordinate all government interventions to the wellbeing of human, animal and plant welfare. How raising such welfare is to be achieved would be left to the private sector; under a bond regime raising welfare would be the private sector's goal, rather than doing things that can be sold to government as necessary or otherwise gaming the system for government funds.

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