House on Fire

As you may know, I was pretty disappointed with the Republican House members (and some Democrats) who torpedoed the financial market bailout. I listen to talk radio (via podcast on my iPod) so I realize that it was not necessarily popular with all of "main" street.

A lot of the anger seemed to be directed at the lending institutions who made the bad loans, and the irresponsible borrowers. Many conservatives seem appalled by the fact that these people had made bad decisions, and that tax payers would not bail them out.

Let me make it clear that I do not like the fact that we have to bail someone out. It would feel great to let those who caused this mess to bear the full consequences of their actions; for about thirty minutes. The bailout is not a measure to help preserve Wallstreet's profits and deadbeat's homes, its to avoid a financial meltdown of our economy.

This melt down isn't going to be limited to the wrong doers. It would have a severely negative impact on our economy. Credit will become more dear to both businesses and individuals. Businesses than cannot borrow or have to pay high rates end up losing business and laying people off of work. Those newly unemployed may now find that their equity line has been pulled so they too become behind in their home payments.

Here is an easy way to think of it. You live in a neighborhood where all the houses are close together. Your neighbor smokes in bed. You've told him on a number of occasions that it is dangerous, and that he is going to start a fire. Of course, he doesn't listen to you and eventually catches his house on fire. What are you going to do? Would you risk the entire neighborhood by refusing to call the fire department or even worse block the street in order to teach the offender a lesson? You would only do that if you were a complete moron. That is exactly what some people are doing now with the financial crisis. They are willing to let our economy suffer enormous damage just to teach everyone a lesson. Its not principled, its just stupid.