We’re all (not) in this together…by John Allen
A popular cliche of lawmakers during the economic downturn and the discussion of bailouts is that “we’re all in this together”. Hillary Clinton and Barack Obama both said it during the 2008 Presidential campaign. Other lawmakers have used the phrase recently. In one sense I agree that we are all in this together. When defending our national security during, say, World War II we were all in it together as a matter of national pride and national survival. When we are up against Islamic extremists who want to kill as many American civilians as they can then we should also all be in it together (although, shamefully, we were not).
The greatness of America, however, is that when it comes to matters of economics and personal achievement we are, most decidedly, not all in it together. The beauty of America is that you are free to pursue your self-interest and achieve your dreams without being tethered to the lazy, shiftless, incompetent and most corrupt members of our society. We (traditionally) don’t have to bear the burden of the undisciplined and unmotivated as we try to make our way in the world. This is not to say that there shouldn’t be some social safety nets for the less fortunate among us, it is just to say that they shouldn’t be worn like an albatross around the neck of society’s most productive citizens, weighing us down and sapping our collective strength.
This is the main idea behind the populist rage at the bailouts (not to mention the profligate spending by government) that has caught our government leaders flatfooted recently. When we are asked to bailout Wall Street financial firms, Detroit automakers, irresponsible homeowners and reckless state governments it seems like, once again, government is grinding us down for the sake of those who were corrupt, irresponsible and incompetent. Whether it’s AIG executives or Octomom, responsible taxpayers are getting tired of going to work everyday to pay for somebody else’s mistakes.
How come we are only “all in it together” during the bad times? When the guy making $40,000 a year was living large in a 3000 square foot home with a pool, were we all in it together then? When people were over-leveraging to buy multiple condos and houses so they could flip them and make a quick profit, were we all in it together then? And when many of our neighbors were taking out home equity loans so that they could buy a boat or take an extravagant vacation, were we all in it together then? No, of course we weren’t. As soon as times get tough, however, and these same people find themselves in trouble, now all of a sudden we’re all in it together. Well, sorry, but I’d rather not be.
I know the arguments. We’ll all suffer if we don’t bail them out. Our home values will further decline due to all of the foreclosures in the area. That’s probably true. But, these are the same people who drove up home prices to begin with. There were 5-6 million people who never should have been in the market who increased demand for housing which increased house prices. They are the reason I paid $366,000 for my house instead of, say, $200,000. They have already cost me enough money. I don’t want to help them. Also, if home prices fall even more then houses will actually be affordable for many young families who might take care of them and keep them up because they intend to be long-term owners. Eventually, home prices will recover.
And, by the way, remember when “affordable housing” was the goal of people like Barney Frank, Maxine Waters and Chris Dodd? Well, guess what, when home prices fall they become (wait for it, wait for it)…affordable. Much more affordable than putting someone with no down payment and low income into a $450,000 home. And just when home prices start to fall so that new families and lower-income people can afford them, here comes the government to artificially prop them up. So, according to these do-gooder liberals, a poor guy in an expensive home is “affordable housing”, while a poor guy in an inexpensive home is, well, something we shouldn’t allow to happen because we must stabilize home prices.
Conservatives are often criticized for being beholden to corporations and big business. Isn’t it ironic that the only people who aren’t willing to bailout Wall Street firms and Detroit automakers are Conservatives? Conservatives don’t believe in corporations, we believe in the free market. When a business fails it is society’s way of saying that we don’t value the products you are offering, we don’t want them at the price you are charging or that you have made way too many unwise business decisions and the company’s balance sheet is unsustainable. The materials, labor and capital are not being used efficiently and in a way that society values. By letting a company go bankrupt we are, in effect, freeing up resources and labor to be used more efficiently elsewhere in society. Every person who loses a job in the Detroit auto plants is someone whose labor is freed up to be used elsewhere, perhaps at Toyota or maybe even in the new “green” energy industry. By propping up failing companies we are basically saying that inefficiency and incompetence are to be tolerated and, worse, subsidized by the taxpayers.
And, why all of the outrage at the AIG executive bonuses? Why would AIG not pay them? What lessons have they learned from us? Every time they have been on the brink of bankruptcy they have come to the U.S. taxpayer and been given another multibillion dollar bailout. They have suffered no consequences for their incompetence and recklessness and every time they need money we faithfully hand it over. Why would we expect any change in behavior? It’s kind of like the taxpayers of California. Every time our legislators run up a huge deficit with irresponsible spending we just let them dip into our pockets and take more money out. Why would they ever learn to be more prudent with our money? At some point, we have to say no, not this time.
Somewhere lost in all of this madness is the notion that government shouldn’t be doing things like intervening in the running of companies and overriding mortgage contracts. The free market let’s you rise or fall based on the degree to which you work hard, innovate, serve your customers, honor commitments and make good decisions. In other words, (and this will make liberals’ heads explode) the free market rewards virtue. And, more importantly, it punishes lack of virtue. And, most importantly, it doesn’t stick somebody else with the bill when it punishes you for lack of virtue. And it doesn’t guilt trip you into believing that we are all in it together.
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