Comment by qj4714 | Hacker News Reader

Comment by qj4714 | Hacker News Reader

The article is arguing for more government intervention in the economy which I would argue is exactly what has led to this form of crony capitalism. What is the answer to 'to big to fail'? Failure. But the problem is that the government made a decision decades ago to bail out Chrysler, and the Fed cut rates in 98 and after to bail out the markets. The we had QE1, QE2, ZIRP, etc...All of these GOVERNMENT policies have created a massive excessive of capital in the system and creates all kinds of temptations to do share buybacks and boost dividends. Verizon workers are covered by unions, which are supposed to ensure their workers get a fair wage.

This article is paint by numbers economics designed to whitewash all the problems caused by the gov't and demonize corporations for taking advantage of a situation the gov't created.

Your comment started appropriately in that it acknowledges crony capitalism. Then it strangely diverts to decrying the government as if it alone created problems that corporations simply (and innocently) exploit.

You had it right at the beginning. It's the fusion of government with corporations that's the problem. Corporations manipulate and influence government for their benefit, not the other way around.

What standard would you hold corporations to?

Well, that's my point: corporations and government are inseparable. It's useless to treat them otherwise, which makes questions such as yours misleading.

Likewise, treating corporations as hapless beneficiaries of some sort of bumbling government largesse is disingenuous. It's the deliberate co-opting of government by corporate interests that is the problem.

How does the repeal of Glass-Steagall fit into that?

I would argue that the repeal of Glass-Steagall in itself was a government intervention, because it happened after Citi merged with Travellers, and it was based on lobbying from Citi.

But there were other pieces of legislation, namely the Commodities Futures Modernization Act, that had a more damaging effect.

The more general problem is that the market prices risk based on the underlying assumption that if anything bad happens the government(s) will step in and bail out the bad actors. The mentality leads directly to risky behavior and, in fact, induces risky behavior. If you take away that inducement, these actors will behave differently.

You're confusing naked government intervention with corporate influence and regulatory capture.

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