Thoughts on the Bailout

For those of you who have been living under a rock for the last week or so, the hot topic now days is the proposed $700 Billion bailout of the lending institutions that overextended themselves on bad mortgages. The senate recently passed it, and it's going to the house. President Bush has endorsed it, and both Obama and McCain voted for it in the senate. It seems almost a forgone conclusion that this will pass. I have only one question...

What the fuck happened to accountability? I always thought that one of the key ideas of capitalism was that you accept both the earnings and the losses. These lending institutions took risks by handing out mortgages to any Tom, Dick, or Harry with a pulse. "You make $25k a year, and you want to buy a $1.5M house? Sure, we'll back you!" Who approved these boneheaded moves?

People talk about the collapse of these lending institutions as if it's the end of the world. They claim it's the next Great Depression. Did any of these politicians live through the Great Depression? It's like claiming that the Iraq War is the next WWII.

People point to the failure of Washington Mutual as if all banks will fail and all the money people have saved will just vanish into the ether. Did these people notice what happened to Washington Mutual? It got bought out by JPMorgan Chase and was open the next day. This is capitalism, people. The banks perform both a vital, and lucrative, service. If there's a void, and there's profit to be made, that void will be filled.

It's not the government's place to insulate businesses from the consequences of their bad decisions. All the government needs to do is ensure that business is being conducted in an ethical manner, and beyond that, fortunes will be made and lost by the hands of the businessman, not the congressman. You aren't solvent enough to cover your debt? Fine, sell assets until you are. Don't whine to the government for free money. If the government has to bail out a business, it should be nationalized, rebuilt, and eventually sold back into the private sector. Put the jackasses who ran that ship into the ground out on their ass.

The other concern I hear about is all the people who will get foreclosed upon because of their bad mortgages. Cry me a river. You're going to lose your house? Cash in your end of the mortgage, let the bank foreclose on you, and buy a house that you can actually afford. What? It'll ruin your credit rating? It should, I wouldn't lend to your dumb ass after you made a mistake that big.

In the end, it all comes back to accountability. People are in this mess because both sides made some God awful decisions. Bailing them out at this point is simply rewarding them for making those decisions. It takes all the risk out of business, and in the end, is tantamount to theft from the taxpayers.