Higher standard: Too many chances spoil the child ... and the country
What happens when someone makes an irresponsible decision and he or she is bailed out without personal consequence?
How effective is a warning that you need to concentrate and succeed in school if a student knows there is no actual penalty or that underperformance is excused away?
The same demands that Americans are putting on the nation's schools -- to demand more from teachers and students and to insist on strict measurements of achievement as well as rules for advancement for those who have not mastered the basics -- are being ignored when it comes to handling the current economic crisis.
What is the motivation to handle your mortgage properly if you bought a house you knew you could not afford, can't make the payments, and someone comes along -- namely taxpayers -- and bails you out of your bad choices?
Would you think twice before taking on a similar bad debt, especially since you did not think about it before you took out the first one?
Something needs to be done to take care of the many millions of people who are trying to manage under burgeoning mortgage debt they cannot afford, just as something had to be done to take care of the financial concerns that threatened the health of the markets and the impending collapse of the American auto industry.
But as we make these choices, we have to remember that somewhere, somehow, someone has to pay for these bad decisions -- and if there are no or few consequences for having made them in the first place -- we are only postponing another collapse, another bailout.
Companies that have not been managed effectively in the marketplace and who have made bad decisions that have left them vulnerable are like individuals who have made the same types of bad choices that have left them unable to pay their bills.
Help should come only if they understand that the way they have operated in the past is no longer a possibility and that they will have to adapt their policies and to take advice and oversight to get back on the right path. And, they should pay a penalty that absolutely must be collected -- no matter how much of a hardship it places on the bailout-ee. An extra job or a lower bonus ought to do the trick.
Bailouts should be assistance -- not a free lunch.
Otherwise, the rest of the country who doesn't need a bailout might start to reconsider how they conduct business or manage their family budgets.
And who could blame them? Might as well get on the chuckwagon before it loses its wheels.
Published in Editorials on November 12, 2008 10:38 AM