I’ve complained that the bailout was a cop out – a slush fund to forgive people who encouraged people who couldn’t afford loans to take them, and to rescue people who abused their credit beyond reason. If people were more responsible, and lived more within their means we would all be better off. But, with interest rates kept low by the Fed, people could afford more and the banks were willing to give it out. After all, what’s the worst thing that could happen? Foreclosure? Pfiff! We’ll just fix it and flip it, right?

Let’s get this straight, if you oppose the bailout, you oppose the big government kind of spending that Democrats claim is required to keep us stupid consumers from living within our means for a change and ruining the economy. It isn’t a plan to rescue corrupt corporate evil-doers. It isn’t the fault of George Bush or the neocons, all of our politicians have contributed to this scourge. This whole thing has its roots in regulations passed by the Democrats since at least Jimmy Carter to “protect” the right of poor people to abuse credit, just like the wealthy! It’s pretty appalling. We are now facing a weakened Bush forced to sign a few billion for this bailout and that, as Secretary Paulson (Dem) convinces him and about half of congress (and a lot fewer than half of polled Americans) that bailouts are propping the economy up, and without these aid packages to rescue the auto industry, the taxachusetts socialist healthcare program, Fannie, Freddie and now the mortgage lenders, we would all be forced to face our bad decisions and deal with the consequences.

Politicians don’t like to make hard decisions, and don’t like to make voters face the music for their bad decisions. They live to get reelected. So, they do everything they can to insulate us from “reality”. They are just like the typical yuppie parent these days. They make excuses for their spoiled kids, and rescue them anytime they fuck up. They apologize for them and bail them out. As this report shows, voters have increasingly less trust in our politicians to make sound decisions on Wall Street and the economy, and for good reason! You can’t always be best friends with your kids, sometimes you have to act like an adult and let them face the consequences for their actions. The politicians are afraid to admit it, but these trumped up crises are not all a matter of corporate greed – they show a fundamental inability of Congress to properly govern and a failure of Americans to self-regulate.

To be honest, it isn’t all our fault. It isn’t that we were just suckered in by seductive ads promising interest-only loans that would allow us to live in the lap of luxury at a discount. We live in a society that feeds on self-delusion. In just a few decades, we have forgotten the lessons of the early 20th-century, and as individuals we are more concerned about the trappings of success than saving for our future. We can’t blame the ad agencies, companies that exist to make a profit or someone else for our self-indulgent ways. We saw incomes rise, and we saw all sorts of consumer goods become cheaper. (I could go into how we did that by exploiting cheap global labor, but that’s not productive here, and having better wages and cheaper goods isn’t all a bad thing, but we abused it!) Our competitive nature pitted us against our neighbors, and we decided it was easier to do what feels good and live for today (screw tomorrow!) – and we traded in our self-responsibility and moderation for fast food, jet skis and half-million dollar mortgages. We told ourselves “we deserved” what the other guy had, even if we couldn’t afford it. After all, we were just as good as “them”, right? Why should we have to live within our means?

In Socialist Squirrel’s post, the mix of our desire to spend more and have more than our parents was compounded by the need for our politicians to give us those expensive Nike’s we want (because all the other kids have them).

I think the argument goes like this:

1. Since Jimmy Carter, liberals have pushed regulations that justify “protecting” the right of the poor to buy houses they can’t afford. They’ve even written laws to allow mortgages to be granted considering food stamps and welfare checks as income. This is totally irresponsible!
2. Clinton imposes big penalties against lenders who appear to discriminate against the poor. He also allows Fannie Mae to only hold 2.5% in reserve for all outstanding loans. He encourages lenders to grant loans that exceed individual ability to guarantee them.
3. This is worsened in the last decade, as the Fed enforces an unreasonably low interest rate. Now everyone can afford new homes and millions are encouraged to refinance. Lenders accelerate this by over-the-top marketing, spam and advertising and exploit balloon-payments and invent new kinds of loans, like the “interest only” loan and the “reverse mortgage” loan to compete in an unnaturally aggressive market.
4. Greed rears it’s ugly head, and Fannie Mae CEOs cook the books and give themselves big bonuses. Unethical behavior results, as a result of government endorsing and consumers demanding “money for nothing” for the past 25 years.
5. Ethics violations are wrong, but the Fed and regulators also exploit the use of bailouts during the election cycle. The hype helps them promote their candidates at a time when you can hardly tell them apart. The Democrats see this as their chance for redemption in the eyes of voters (their kids).
6. Rather than vote for ethics reform, Congress (and Bush) are persuaded by Paulson to buy up assets and bail out failing companies left and right. The average voter is not amused!

Now, all taxpayers must pay the burden for the greed, over-consumption and ethical abuse of lending practices. We don’t end up making any real progress or learn anything from this, once the stock market recovers, we will just go back to our old, indulgent ways, and our elected officials will tell us that we should go buy a new plasma screen TV with our tax refunds, for the good of the country, rather than saving money or paying down our bloated debt. We continue to be the ones who are screwed, but we bend over and take it with a deluded, happy smile on our faces. We buy the bullshit. It’s our fault. Unless we have a truly remarkable meltdown, we will quickly move past this with no lessons learned. And, history shows, even if we do learn, generations will pass and once again we will be back to living beyond our means, eating Happy Meals and riding our jet skis until our credit is ruined and our 401K is gone. But, don’t worry, the next bailout is right around the corner! Big government programs will pay for our old age.

[Who gives a fuck if our children and their children will have to pay for our short-sighted behavior and policies? That won't be for decades (or a few months if things really go south!)]

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