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Too Big Not To Fail - Eliot Spitzer (His First Slate Column)

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NashVegas Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-05-08 09:12 AM
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Too Big Not To Fail - Eliot Spitzer (His First Slate Column)
http://www.slate.com/id/2205995 /

Last month, as the financial crisis and the government rescue plan dominated headlines, almost everyone overlooked a news item that could have enormous long-term impact: GE Capital announced the acquisition of five mid-size airplaneswith an option to buy 20 moreproduced by CACC, a new, Chinese-government-sponsored airline manufacturer.

Why is that so significant? Two reasons: First, just as small steps signaled the Asian entry into our now essentially bankrupt auto sector 50 years ago, so the GE acquisition signals Asia's entry into one of our few remaining dominant manufacturing sectors. Boeing is still the world's leading commercial aviation company. CACC's emergenceand its particular advantage selling to Asian marketsmeans that Boeing now faces the rigors of an entirely new competitive playing field and that our commercial airplane sector is likely to suffer enormously over the coming decades.

But the second implication is even bigger. The CACC story highlights the risk that current bailoutsa remarkable $7.8 trillion in equity, loans, and guarantees so farmay merely perpetuate a fundamentally flawed status quo. So far, at least, we are simply rebuilding the same edifice that just collapsed. None of the investments has even begun to address the underlying structural problems that are causing economic power to shift away from the United States, sector by sector.

(snip)

This long-term change frames the question we should be asking ourselves: What are we getting for the trillions of dollars in rescue funds? If we are merely extending a fatally flawed status quo, we should invest those dollars elsewhere. Nobody disputes that radical action was needed to forestall total collapse. But we are creating the significant systemic risk not just of rewarding imprudent behavior by private actors but of preventing, through bailouts and subsidies, the process of creative destruction that capitalism depends on.


You know, something tells me that if his fall from grace had never happened, Eliot would most definitely not be AG come January.
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groovedaddy Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-05-08 09:28 AM
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1. Like 'big dog,' we shouldn't let Spitzer's poor judgement in one area of his life
Edited on Fri Dec-05-08 09:28 AM by groovedaddy
preclude his participation in the arena. The guy knows what he's talking about. I'm glad to see he hasn't completely gone away.
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NashVegas Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Dec-05-08 11:24 AM
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2. kicking
cause I'm glad he's re-emerging.
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