Financial Crisis or How I Learned to Stop Worrying and Love the Bailout

When I first heard the term “Bailout” in 2008, I (and millions of Americans) thought to myself: “why should *my* tax dollars be given to these irresponsible and idiotic companies?”

If this country is going to continue the charade that it’s a capitalist society (I hate to break it to you, but this country has been socialist for a long time now; however I’m comfortable with that) then why not let the laws of capitalism rule and let these companies crumble?

The pros to the bailout were numerous and nebulous to the general public (frozen credit markets, government financed take-overs would be less costly in the long run); the only one that resonated with people was that the US couldn’t afford that many newly unemployed people. On the flip side the cons were everywhere: companies hadn’t learned any lessons, no accountability, fostering the entitlement mentality of Wall Street, etc.

The bailout started in the financial sector but soon started to grow. Detroit came with their hand out, but met a much more stern Congress compared to the red carpet treatment that Wall Street received.

I was against these bailouts, but it has dawned on me that the issues weren’t the act a small group of people. The issues these industries were facing were truly systemic. Additionally, this isn’t the first time the government has stepped in to bailout an industry or a company.

It isn’t as true as it used to be, but there is the old adage “As General Motors goes, so goes the nation.” The negatives of financial collapse on Wall Street and in Detroit far outweigh the debt that will pile up.

So I’m not happy about the billions going out the door to Corporate America, but with any luck this recent patch of tough times will reign in some of the extravagant perks and salaries of high level executives (a boy can dream, can’t he?).

However… with all of that being said, I am back to square one when it comes to Obama’s mortgage bailout plan.

Much in the same way that my last post lamented the focus of time and money on a slim minority of people who probably don’t deserve the “help” they are receiving; this bailout is eerily similar. Did you know that over 95% of US homes are NOT in foreclosure? Over 90% of homes are current on their payments.

We see these scary headlines every day like “Ninety Percent increase in US Home Foreclosures”. Foreclosure is a scary process, and I’m not minimizing those facing that prospect; but how do you target those who deserve help instead of idiots who got in way over their head, yet not alienate the 90% of homeowners (not to mention non-homeowning taxpayers) who didn’t get themselves in a heap of trouble? Is the problem truly systemic when 90% of people are current on their payments? Why are we addressing the minority at the expense of the majority?

Maybe someone can talk me into loving this latest bailout; but until then I’ll continue to worry.