Thursday, August 6, 2009

Bailing on Bail Outs

Lately, it seems that anyone and everyone is a potential target of the government's generosity. The automakers, the banks, any distressed industry can make their case that they are "too large to fail." Compelled by a fear that the bad economy may get worse unless Congress or the President intervenes, money is dolled out under the auspices of preventing collapse.

Much has been written about whether this is the correct or incorrect use of federal funds, and I'm not going to take on that task here. However, what I haven't read much about is what this does to the "national consciousness." In other words, when Ford, Citbank, AIG and others aren't held liable for the choices that they've made, why should anyone think that they will be personally responsible for their decisions too.

A great example of this is found in a college graduate that recently filed suit against her alma mater because she wasn't able to find a job. Among her reasons that a job should have been forthcoming was that she had stellar attendance and a GPA of 2.7. Now, I'm not qualified to comment on what the college did or did not do in regards to providing her job placement services, but at the very least, I'm thinking maybe they should have spent more time on math. After all, thinking that a below B average is in demand in an economy that is quickly approaching double-digit unemployment, doesn't add up.

However, it turns out this young lady may have just been ahead of the curve. Recently, a coalition has been formed for unemployed young people to become the latest recipients of the government's largese. It's easy to imagine that soon people will want to receive financial payment from the government for anything that goes wrong in their life. After all, even if the government can't be "blamed," they can still make ammends for the disadvantages we suffer. Those that receive rewards are no longer those that make the most of the hand they're dealt, but those that can make the most legally compelling case.

And the point is this, I don't know whether the economics work out in favor or against the recent government bailouts (I have opinions, but I haven't done the supply and demand curves.) However, when well-intention ideas take the turn for the worse, we have to realize that there's a limit to their implementation. When an idea that was originally intended to prevent economic collapse, becomes a license to limit personal responsibility, than we must bail on it. Otherwise we will not only be facing a financial collapse, but a societal one as well.



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Bailing on Bail Outs