Ethics Paper--Bailout

1795 Words Nov 19th, 2010 8 Pages
Bailout Ethics
Americans are outraged. Billions of taxpayer dollars were committed last year to rescuing firms such as Citigroup and the American International Group (AIG). Earlier this year, several companies who received Troubled Asset Relief Program (TARP) assistance were awarding top executives with extravagant bonuses. According to the Wall Street Journal, the U.S. government lent $238 billion in TARP taxpayer funds to almost 700 banks; 44 of these banks have repaid a $71 billion (Johnston, para 6). There remains $167 billion invested in banks. Some critics argue that a “mere” $167 billion is not significant to warrant public indignation against bonuses. However, the issue is not about specific bonus amounts but the principle of
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In another example of applying the Rights Approach to bailout bonuses, AIG tells a different story. In March 2010, AIG is scheduled to distribute yet another $198 million in bonuses to its financial products employees— largely seen as responsible for the firm’s failure (Collins, para 11). This will result in almost $400 million in bonus payments since receiving government assistance (Collins, para 11). As mentioned previously, AIG does not have a moral right to these bonuses. It would be similar to someone taking an elaborate vacation just before filing for bankruptcy and expecting the government to finance his unnecessary expense.
Common Good Approach: Definition and Analysis
In a globalized world, the Common Good Approach has increased in relevance for judging ethical behavior. It presents “a vision of society as a community whose members are joined in the shared pursuit of values and goals they hold in common” (Markkula, para 12). This Approach calls attention to the conditions that are important to the common welfare of everyone. The principle states: "What is ethical is what advances the common good" (Markkula, para 12). The common goal when considering the bailout is a stable economy. What remains unanswered is why some financial institutions, such as JPMorgan Chase and Goldman Sachs, were helped with TARP funds while other banks, such as Bear Stearns and Lehman Brothers, were allowed to

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