House
Progressives Throw Down a Marker: No AI Bailouts
A new resolution demands that Congress withhold support for AI
companies that bankrupt themselves and instead respond to any
future recession by supporting ordinary people.
[...]
Both Anthropic and its partners are now reliant
on each other. If Anthropic cannot repay its debts, or Google’s
AI ambitions outpace Anthropic’s and it cuts its rival off, or
any number of other possibilities in the 94 pages of risk
factors listed in the prospectus come to pass, all these
counterparties will feel the pain. These kinds of tight
connections are precisely what crumbled the housing finance
system when the bubble collapsed in 2008.
It’s these kinds of concerns that have led the Congressional
Progressive Caucus to write a new House resolution, obtained
exclusively by the Prospect,
demanding that Congress “refuse to provide any additional funds
or exceptional regulatory support to companies or financial
institutions facing insolvency or financial collapse due to
exposures to acute stress within the artificial intelligence
market.”
The text of the seven-page resolution recounts the history of
the financial crisis, the lack of prison time for those whose
illegal actions caused it, and the congressional bailout
delivered to big banks instead of workers or homeowners. The
resolution attempts to commit Congress to not make the same
mistakes again.
[...]
The
resolution advises that any bankruptcy of an AI company or
affected bank should go through the current bankruptcy
processes reserved for those businesses, in ways that support
workers, consumers, and pension and retirement fund holders.
It states that senior executives liable for excessive
risk-taking or any other unlawful action “should be held fully
accountable under civil and criminal law,” with disgorgement
of ill-gotten gains. It says that the government should take
action, but bail out workers instead of executives through
fiscal stimulus, job creation, and retirement fund backstops.
It suggests automatic stabilizers to prepare for this
possibility, so that workers and consumers are protected with
immediate benefits if an economic collapse commences. And it
proposes a “reform agenda to prevent future speculative
bubbles.”