Bear market for personal responsibility
By Michael Graham | Tuesday, September 30, 2008
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Despite the vote by the House of Representatives yesterday, the fact remains that America desperately needs a bailout - a massive rescue plan for an institution vital to our nation and its economy.
My bailout target?
Personal responsibility.
America is experiencing a collapse of the ethics market. Belief in the notion that people should be responsible for their own actions, or pay their own bills or keep their promises has plummeted. It’s time to pump moral and ethical capital into the idea of individual responsibility.
Is it any wonder that Wall Street is waiting for a bailout? After all, we’ve become a bailout society.
Earlier this summer - before the financial meltdown - we passed Barney Frank’s $300 billion bailout of individual homeowners who had bought homes they couldn’t afford. Last week, Congress voted a $25 billion bailout of the auto industry because they’ve made cars nobody wants to drive.
And now we’re bailing out banks because they made loans to people who feel no duty to repay them. This failure of personal responsibility has led to the potential failure of our financial markets.
Yes, there is a public policy aspect to this story. The Clinton and Bush administrations were wrong to push easy lending to low-income borrowers, and the Democratic Congress’s scandalous affair with Freddie and Fannie is enough to make Barney Frank blush (almost).
Wall Street bankers who leveraged $1 trillion worth of mortgage-backed securities up to 40 times on the dollar get no sympathy from me. But it is an inescapable - if unpleasant - fact that banks would not be failing or credit markets frozen if borrowers were keeping their word.
This isn’t a failure of finances. It’s a failure of character.
Barney Frankophiles rage against this idea as “blaming the victim.” I ask “victim of what?” The economy?
I’m sorry, but folks who lost their homes during the Depression were victims of the economy. Twenty percent unemployment made it impossible for folks to pay the mortgage.
We are experiencing the opposite: Unemployment has barely hit 6 percent, and yet so many borrowers are walking away from their loans that they might take down the entire economy.
You can blame mortgage brokers willing to make loans to any warm body, but every transaction ended with that warm body - presumably a voting-age adult - signing their good name on a pledge to repay the loan.
But when was the last time you even heard the phrase “my good name?” Has a single politician in the midst of this mortgage crisis mentioned the notion of personal responsibility even once?
No. Instead, John McCain rails against “Wall Street fat cats,” Barack Obama suggests tar and feathers for a few CEOs, and then we write a $1 trillion check to subsidize the bad behavior of all involved.
And it’s not just on Wall Street. Main Street’s always up for a bailout, too.
Marriage too tough to manage? Just bail out, and don’t worry about the consequences. The kids will probably be OK.
Don’t want to pay your bills? Why not bankruptcy? Hey - everybody does it!
And what are proposals here in Massachusetts to abandon the MCAS other than a bailout of under-performing students? Why make failing kids work harder, when it’s so easy to drop the standards instead?
Yesterday, the Herald reported that the Boston City Council is considering legal action against parents who refuse to take responsibility for their truant kids.
In Salem, a woman who tripped over a firefighter’s rescue bag in a rest room is suing the city for her broken wrist. She can’t be held responsible, it seems, for even watching where she’s going.
So here’s the final question: If everyone gets a bailout, who does the bailing?