There Is No "Us And Them"
My intention is to develop this idea further in a future post, but I want to set the concept in motion before it escapes my feeble mind.
Often during the debates about the economic stimulus and bailout programmes I have heard commentators, pundits, politicos and people I know talk confidently about why we should just let "them" or "those people" or "those companies" fail. It strikes me that, while there once might have been a more discreet economy that would tolerate the failure of large companies without considerable effect on the rest of the economy, such is no longer the case. When Rick Santelli says he doesn't want to save the "losers" who can't afford their mortgages, I wonder how he will feel when half the houses on his block, or condos in his building are foreclosed and the value of his property plummets as a result. When my friend says that GM should be allowed to fail because they made poor management and development decisions in the past, I wonder how he will feel when the ripple effect of all that unemployment chokes off his own business.
The sort of narrow thinking that says we should not, as a society, take an active role in rescuing our economy for all of our good baffles me. I'm all for personal responsibility, and I am not in favor of handing out money without any regulation, or requirement for how it is spent. I do think, however, that government intervention is the only way left to stave off complete economic chaos. We tried letting the market, such as it was, determine economic growth, we sloughed off regulations, we loosened lending requirements, and we encouraged people to live a consumer lifestyle that was largely unsustainable. I'm sure someone will read this and think "socialist." Fine. If the only argument to be made against me is to trot out some 1950's bugaboo, I'm okay with that. I, for one, don't think socialism is necessarily always a bad thing.
Comments
I've been mulling this one over too, and am emotionally split by it. One the one hand, I have a hard time having sympathy for people with no financial sense OR the people who took advantage of that. On the other, there's a systemic problem with how our capitalism tends towards monopolies which exposes us all to the sort of meltdown we're in now. Too big to fail? Capitalism requires lots of small players for a well running market. If you can't have that, then you need government regulation to balance the big players out. Cake and eat it? No, and now we starve.
The part that makes the bailouts so much harder to swallow is that the little guys aren't getting any relief and the people that don't need the help are running off with the spoils. They complain about government welfare with a mouth full of government cheese, and I can't blame folks for wanting to see them choke. Still ultimately I agree the government has to step in and save GM, AIG, BofA, etc. I hope we get something for our money.