There’s a new corrupt concept being thrown around, “Too Big To Jail”.
“Too big to fail” means “This corporation is so important that it cannot be allowed to go bankrupt. We must bail it out.”
“Too big to jail” means “Not only is this corporation important, but its executives are also important. We cannot prosecute them, no matter what crimes they commit.”
One example of “too big to jail” is that banksters got caught laundering money for drug cartels, and got off with a small fine and no jail term.
“Too big to fail/jail” is nonsense. It’s just making excuses for allowing insiders to get away with crimes.
Suppose a corporation really is “too big to fail”, and it gets into financial trouble. In that case, the government could allow a bankruptcy filing, but then provide bankruptcy financing to make sure all the creditors get paid off. The “problem” with that method is that there’s public disclosure of who got what money. If there’s a bailout but no bankruptcy, then the money is disbursed in secret.
When AIG was bailed out, that money went to creditors including Goldman Sachs. However, there was no public accounting of who got what. It was the same as the government directly writing a check to AIG’s creditors, but it happened in secret. In effect, the bailout money was laundered through AIG.
“Too big to jail” is also nonsense. Most executives are far removed from the people who do the real work. Corporations shuffle their management all the time, especially when there’s a new CEO. Even if a corporation is important, they still could jail the executives and find new ones. There always are plenty of people ready for a promotion.
This also effects the economy and the job market. Why would anyone make a useful product, when you can get a bailout or steal and get away with it? Why would any corporation need good workers, when they can get a bailout? The economy can’t recover as long as people get away with crimes. When corruption is more profitable than doing real work, how can anyone produce something useful?
“Too big to fail” is just an excuse for giving money to insiders with no accountability. “Too big to jail” is another excuse for letting insiders get away with crimes. When an ordinary person makes a bad investment, they lose their savings, but insiders get bailed out. When an ordinary person breaks the rules, they go to jail, but insiders are immune from prosecution. There are two justice systems, one for insiders and one for everyone else.