The Bailout

So... the bailout. When I first heard about it, it seemed reasonable enough: the demise of a few banks is gonna destroy the whole economy? Well, then sure! Bail them out!

But then, of course, all the counter-arguments came to the fore. Why should we bail out the Wall Street fat cats, who were just as irresponsible as the mortgage holders, instead ? The answer, of course, is that the fat cats are the ones in control of those deciding to bail out the fat cats. This has nothing to do with "morality" or "the right thing to do". It is merely a function of the Golden Rule: the one with the gold makes the rules.

But isn't it, objectively speaking, good to save the economy from crashing and the country from lapsing into The Great Depression II? (And we all know how the sequel is usually never better than the first, World War II and Godfather II being the few exceptions.) Well, yes, that is good, but why is the entire economy so dependent on the banks in the first place? Why do we have this system whereby the government enjoys none of the profit, but all of the loss?

The funniest thing about it, though, I think, is that it exposes a cornerstone of conservatism in such a way that reveals what the Republicans really are. This cornerstones is the idea of the free market: the government should not be involved with business because it increases competition, which makes the businesses as efficient and as much of a benefit to the economy as possible--and ALSO, if one fails, then too bad. It didn't win. Survival of the fittest, and that business was not fit to compete.

Now, under this CONSERVATIVE theory, AIG should have just been allowed to die. Oh, but no, we can't have that; that'll destroy the economy! Well, according to the above theory, we SHOULD let the economy be destroyed. Just extend it to a world view: not only are businesses in a dog-eat-dog world, but so are countries; countries are in competition with each other as well, and if one country's economy implodes, well, just too bad for that economy.

It's ridiculous, isn't it? But isn't that why we're not bailing out the "irresponsible" homeowners who couldn't pay their mortgages? You couldn't pay? Well, too bad. Why couldn't the government say that to AIG? You fell apart? Well too bad.

The difference of course--apart from the Golden Rule mentioned above--is that we have a gun to our heads. AIG (and others) is so big, that we (supposedly) can't afford for it to fail. We'll be plunged into another Great Depression if we don't. The American taxpayer has just been taken hostage by corporations, and we paid up.

Then again, why couldn't we use that $700 billion to give to the homeowners to just start paying back the loans on their houses? But no, we can't reward them for being irresponsible. Oh, wait...