2 big 2 fail?

Disparaging the invisible hand? Au contraire, Jeffy--do you mind if I call you Jeffy?-- I think in some ways you are endorsing the invisible hand of the market as the only way to handle those pesky corporations. Forget about bailouts, let the invisible hand do some creative destruction. Out with the bad, bloated, inefficient firms who made bad decisions, took too big of risks, and were ultimately irresponsible and replace them with lean, mean, smart, new entities ready to make better decisions, take advantage of the market, and profit among the carnage (just look how these two guys from New Jersey are doing it).

However many firms (especially in the automotive and financial industry) have avoided (for now) the cold slap of that infamous hand by convincing the government to give them a handout. And how did these firms manage to squeeze hundreds of billions of dollars from both Obama and Bush. Four simple words: Too big to fail. Let me paraphrase what CEOs of major banks are thinking while they are testifying before Congress, "Hey Congressman Joe Shmoe, if we fail, we will take everyone down with us. This won't be creative destruction, it will be total destruction. Go ahead and slap on some silly stipulation about salary caps or whatever else you have to do to appear that you have some control over the situation. But give us the money or we will blow this society to smithereens because our failure will send such shock waves of instability this economy will never recover."

The government is not giving out handouts by its own free will. It is being held for ransom. But paying the ransom is only delaying the inevitability of creative destruction which is the only real incentive firms will respond to. If these firms are indeed too big to fail, then they cannot exist in a market where failure is inevitable. It is not time for a handout, it is time to take these entities out of the control of the market and into the hands of the government because as you say the corporation "falls beyond the immediate jurisdiction of the voter" and why would we want something so big that its failure could destabilize the entire society to be out of the jurisdiction of the voter? If the market is not allowed to reign these firms in, then someone has to do it (sounds like a job for Super Obama!).