Captain Kirk Knew

2012-02-01T01:34:00.000-05:00

G’Day fellow Bandaarrians; with cigar and scotch in hand let us continue on.

I knew something was bothering Bootsie for I have seen her this way before. She asked if I could grab for her a Bilby as she plopped onto the sofa at Kangaroo Alley staring at her pay stub.
‘I don’t get it,’ she said. My bonus is taxed at 40%; 40%, and what does the stupid government do? Give it to companies like AIG and Citi Group who can’t manage their money or their business. When they were making millions in profits did they share any of that money with me? Hell no; so why now am I expected to bail them out of their own greed and stupidity?

I could see this was going to be a long afternoon as I lit her cigar.

Bootsie, the government claims that these companies are too big to let fail, if they do then the ripple effect throughout the economy would be catastrophic.

‘Let them fail,’ she said. The underlying problem here is that these big companies operate knowing that there isn't any downside risk. They rake it in when times are good, knowing all the while that the good old taxpayer will bail them out when times are bad. Let me ask you, if you run your business into the ground what happens; will the government bail you out?

‘No, I’ll just be out of business,’ I said.

But if you go out of business there will be a ripple effect in the neighborhood; you will stop paying business taxes, your spending at local shops will decrease and so on and so forth. So why aren’t you afforded the same safety net as the big boys?

‘Because, they are the big boys,’ I said. ‘There is an economy of scale in play here.’

That is a bunch of nonsense, continued Bootsie. This whole mess reminds me of an old Star Trek episode where two planets were at war with each other. Instead of actually fighting they evolved their conflict to the point that computers were simulating attacks and calculating the casualty count. This was to spare property damage to the cities and to civilization as a whole. After each simulated attack the calculated number of citizens would voluntarily walk into decommission chambers to be extinguished (a futuristic version of the Nazi holocaust ovens). Captain Kirk destroyed the computers, thus bringing the downside risk of war back into the equation forcing the two planets to negotiate and avoid actual war at all costs. It is the same reasoning with these big companies. The downside risk needs to be brought back into the equation; total failure and liquidation of the company.

Until next time may your cigar burn cool and drink go down smooth.