Moneybox: The Year in Busts

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Moneybox The Year in Busts The top 10 corporate bankruptcies of 2011. By Matthew Yglesias Posted Tuesday, Dec 27, 2011, at 05:35 PM ET American culture endlessly valorizes successful businessmen. But since at least the time of Schumpeter, economists have understood that capitalism is defined more by its failures than its successes. In a market economy, even rich and powerful executives go bust when afflicted by bad luck (or when they make poor decisions). So it's worth taking a closer look at some of the failures out there—the 10 biggest bankruptcy filings of 2011. 1. MF Global: Leading the list—by far—was the spectacular collapse of Jon Corzine's hedge fund. With $41 billion in assets, MF Global's bankruptcy counts as one of the top 10 in American history. But while the specter of a former governor, former senator, and former Goldman Sachs executive pissing away an inconceivable amount of money in risky bets on southern European sovereign debt seemed to many to be the very epitome of dysfunctional finance, Corzine's comeuppance is in some ways a success story for the system. Corzine made bad bets. He lost money. He'll lose his job in disgrace and may face legal consequences. The firms who lent him the money he used to make reckless bets will themselves lose money. The (wealthy) people who entrusted their assets to him will lose money. Handing cash over to a well-connected political/financial figure turns out not to be a no-risk gamble. And the American economy can handle the firm's dissolution without prompting wider chaos. 2. AMR Corp: Coming in at No. 2 ... To continue reading, click here. Join the Fray: our reader discussion forum What did you think of this article? POST A MESSAGE | READ MESSAGES Also In Slate Fifteen Years Ago, Ron Paul Wasn't Claiming Somebody Else Wrote His Newsletters The Iron Lady Isn't Just a Terrible Movie About Thatcher—It's Terribly Sexist The Weirdos Who Collect Serial-Killer Memorabilia	Advertisement
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