The Soapbox

So of course there’s been a lot of talk lately about the big bailout, that 700 billion dollar gorilla in the room that everyone wants to talk about. Everyone wants to weigh in on whether or not we should do it. Should we let the banks fail for making bad decisions? Should we bail them out? What’s the better plan? Well, there are several plans out there, and my friend Jason Carreira actually turned me on to my as yet favorite plan, modeled after Sweden’s crisis of the past. While this plan has some flaws in it that I think are made worse by our particular situation, its far better than Paulson’s plan, especially given the dangerous and far reaching implications of Section 8 of said plan. In this post I want to focus on part of the plan I feel is being completely ignored; a part that should be at the forefront of our leader’s minds and is not.

Now I promised Robert Scoble I was more of a tech blogger than a political blogger so he would put me on his tech blogger list (which he still hasn’t yet), and I still hold that to be true. I plan to write that Apple post next, and hopefully this last political one will get it out of my system, but something has to be said and it seems like no one is saying it, so it falls to me. Why, after jumping from a Democracy to an Oligarchy to a Police State (that last one starts on Oct. 1, for more see my last post), why are we now practicing selective socialism? If we are to use $700b of taxpayer money to bail out the financial industry (and I’m not the only one thinking in the end its going to cost much more), why are we only focusing on them? The other half of the equation is the citizens being foreclosed on, the folks who are losing their homes and their cars because they cannot repay the debt they have gotten themselves in.

While I really want to play hardball like Allen Stern and say that bailing these people out is no lesson to teach my kids, I realize that there are other lessons for my children here. First, I want them to help people even when those people don’t deserve it. I don’t believe, as many others do, that all of these people who are losing their homes and their cars purchased these things knowing beforehand that they couldn’t afford it. I believe that most people are doing exactly what I am, which is making the best decisions they can at any given moment. Some of these decisions are always wrong, but then again hindsight is always 20/20. I’m sure some people took advantage of the lending spree, as there are always a few folks like that, but you take the good with the bad, that’s just how it works. I think many of these people saw an opportunity to improve their lives and the lives of their loved ones, and they took it. Big deal, I’ll go toe to toe with anyone who says that’s wrong (ask Jason C.).

But I digress. The second lesson I see here for my children is that when you do things you do them as fairly as you can, and that is not what is happening here. Our government, which is supposed to be supremely focused on helping me ( I’m an old fashioned guy, I still believe that’s what government is for), saw this crisis, like everyone else did, forming way back earlier in the year, but back then we called it ‘the housing crisis’. When it was just ‘the housing crisis’, and the only people affected were individual citizens, there was no talk of anything like a bailout (unless you count that $600 I got from Uncle Sam). Now that the situation has come home to roost and big business is in jeopardy my government is falling all over itself to help out.  That just goes to show you who my government cares about. My point here is that while my government is scrambling to help big business out of the mess they created for themselves there is no thought being given to helping out the people who are defaulting on the loans. Think of it like a classroom. If one or two students fail its the students, if its most of the students its the teacher.

I don’t want to encourage fiscally irresponsible behavior in anyone, and I’m sure no one else does either. My family and I live in a condo instead of taking one of the many loans offered to us during the lending heyday because we knew that we couldn’t afford it (thank you to my dear wife, who helped me keep my head firmly planted on my shoulders and out of the clouds). I would love to have a house with a garage and a yard for my kids to play in, but we’re just not there yet (wait until this blog starts making me some money, then we’ll talk). I want everyone to be as fiscally responsible as we were, but since that didn’t happen we are stuck with the situation as it is.

The situation being what it is, its time to start practicing socialism. Its Poly Sci 101; when you live in a society there are times where you have to sacrifice the individual good for the societal good, because in the long run its better for you too (even as a staunch Libertarian I know that). If we don’t bail out the banks we most certainly face a very deep recession, and possibly another Great Depression. No one wants that. If you don’t think bailing out the banks is a good idea you haven’t thought about it long enough. I’m not arguing that. What I am arguing is that they are the only ones in need of help here.

If we are going to help out the banks, which by all rights should go under completely because of the bad lending decisions they made, why are we not helping out the consumers, the citizens, who by all rights should go bankrupt because of their fiscal irresponsibility? Neither party deserves it in the classic sense of deserving charity, but that isn’t stopping us from helping the banks out at all. I feel like you can either do both or neither here, but selective socialism does nothing but set ourselves up for another situation just like this down the road. I’m not saying they should get something for nothing (even though that’s what charity is by definition). If we go with a model such as the plan that worked for Sweden our government will own a piece of the banks they bail out (and believe me I expect to see a piece of that since I am paying for it. Do you hear me federal government?), so I think the same thing should be done for citizens. Give them a chance, give them the opportunity to keep their homes or their cars and still remain solvent, instead of foreclosing, but have them pay it back somehow. Take it out of the Social Security they have accrued, take their tax refunds until its paid off, whatever it takes, I don’t know. I will admit I am not the wisest man in the land, and if someone can think of a better plan I will be glad to go with it. The problem I see is that no plan is being formulated for citizens whatsoever.

If our government is going to practice socialism in order to keep the standard of living we have become accustomed to they should be practicing socialism as it was meant to be, as it was dreamt to be by its inventors. Socialism is equality for everyone, not just for big business. If we are going to do this bailout thing, we should bail out everyone involved. I have no love for big business or for irresponsible citizens, but this would go a long way in helping restore my faith that my government actually cares about the plight of the common man.