CNN has a story about the proposed $700,000,000,000 bailout of the financial industry. There’s a great quote in there:
Paulson said that the bailout plan is the only way to unfreeze financial markets, giving firms the confidence they need to start lending to one another once again.
Y’know what? I’m not sure I want them to be confident right now. They shouldn’t be confident. They should have the same insecurities about decision-making that we all do right now, mostly because it was their bad decision-making that caused this mess in the first place. Sure, you can point to people who borrowed more on mortgages than they could reasonably pay back, but the counterpoint to that argument is that these lenders lent money they should have known couldn’t be paid back, or they bought mortgages from lenders without investigating fully the thing it was they were buying.
At the end of the day, the corporations gambled on their ability to predict the future and came up short.
If corporations get a free do-over, at taxpayer expense, then I for one am fully in favor of Phil Hellmuth walking into the Treasury Department, saying, “I flopped a set of Queens, and some idiot who didn’t know the odds held on until the river and cracked my set with a straight. I got busted out of the tournament and lost my $50,000 entrance fee. Can I have a check, please?”
Because that’s EXACTLY the same goddamned thing. These corporations gambled and they gambled badly. If they don’t suffer, they will not learn a damned thing other than “we’re considered too important to ACTUALLY lose money, so we can gamble however we want to and the taxpayers will come in and cover our losses… but obviously, we don’t share our wins with the taxpayer.”
Yes, it will mean tough times if these companies are allowed to fail. We need tough times.
My grandparents’ generation lived through a Depression. An honest to goodness “I’ll work for food” depression. They learned the importance of savings. They learned to save up for what they wanted to buy before they bought it, and the only debt most of them carried was a mortgage.
We’ve grown soft since then — and make no mistake I count myself in that “we”. We’ve accumulated far more per-capita debt than ever. Our annual personal savings figure has declined to the point where, each year, we save negative money. Why shouldn’t we live on deficit spending? The government’s been doing it for years with no problems….
Let the economy fail. And my generation, and the generation to come will grow up with the hard lesson that apparently needs to be re-taught every so often, on how to handle their finances.