We all remember the advice about failure we received from our parents and teachers. "If at first you don't succeed, try, try again." "Learn from your mistakes." "Failure breeds success."
The common theme was that some sort of failure in life is inevitable. It is a wake-up call for reflection -- and should prompt needed change. Our character is not just built from success, but during setbacks as well.
But now Americans seem to think such folk wisdom is obsolete. First came the $700 billion bailout of the financial industry. Such a one-time federal guarantee was perhaps necessary to restore liquidity for the failed banking system, but it sent a terrible message.
Those who caused the mess -- greedy traders, corrupt politicians, incompetent CEOs and gullible stockbrokers -- got a collective reprieve. Most inside the rescued Bear Stearns, American International Group, Freddie Mac and Fannie Mae are either quiet about their failure or are blaming others rather than showing contrition. So far, few have admitted that their managers were both incompetent and far too highly paid.
The teetering U.S. auto industry is now next in line for a multi-billion-dollar federal bailout. But for decades, Detroit made gas-guzzling automobiles that the public
believed were not as well built as the Japanese competition -- despite being made by unionized workers who were paid nearly twice as much as those somehow building better cars. Will overpaid auto executives and workers worry about the consequences of their ongoing mistakes when the government has assured them that failing is not an option?
States and cities are lining up as well for fail-safe cash. California is nearly bankrupt; the state was just projected to have a deficit of $28 billion through June 2010. The state has vastly increased its public spending over the rate of inflation. Californians pay among the highest sales and income taxes in the nation.
But what they see in return are bloated bureaucracies, poor schools, congested highways and dysfunctional community hospitals. With a bailout, California's governor and legislators won't worry too much that their constituents are some of the most taxed and least served of any in America.
All sorts of promises are proposed to bail out mortgage holders who have defaulted or owe more than their homes are worth. Apparently, no debtor is really culpable. And apparently, no one took out second or third mortgages for optional consumer purchases, or bought homes too large for their incomes.
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