I’ve seen more than a couple of people comment on the bailout by saying something more or less along the lines of what James Lileks said,
“I’m of two minds on the bailout – reasonable people object, but on the other hand, let’s not just wreck everything today because we want to stand on principles, okay?”
This drives me nuts.
I agree that principles shouldn’t be infinitely rigid. I acknowledge that the ethics of emergencies demands close attention to circumstances. I know that otherwise useful principles may actually become a hindrance in certain unusual circumstances.
But if we ditch our principles at the first sign of trouble, if we abandon our principles because it seems like we’ve got a shot at a quick short-term gain, well… then we’re not actually principled.
It does us no good to pretend that this bailout will be different, or to argue that past bailouts demand future ones. Both are simple lies.
Congress will bail out banks and investment firms that made bad choices. The firms and banks that are stable, sound and well-run? They get hammered by the bailout. Reward stupidity, punish success. Bailout American auto-makers because they can’t sell cars and lose massive amounts of money? Why not? Reward stupidity, punish success. Homeowners who’ve built equity, made their payments and acted responsibly? Raise their taxes. Borrowers who’ve over-extended and defaulted on their homes? Bail, bail, bail. Reward stupidity, punish success.