Tough love and taxpayers

By Patricia Hunt
Published: September 12, 2008

It occurred to me this week that being a U.S. taxpayer is a lot like being the parent of difficult teenagers. Young people are famous for telling their parents, “It’s my life. Leave me alone. Don’t you trust me?” The business interests in the U.S. have been doing everything in their considerable power to dump all regulations on them. They hate rules of any kind. They want us to trust them or at least trust “the magic of the market.” Everything will be just fine if we let them do as they please.
Young people also have been known to want nice things: i-Pods and all manner of electronic gizmos, fashionable clothes, cars, entertainment. The captains of industry and finance also have a taste for what have been called the finer things of life: expensive houses, cars, clothes, vacations. Both think they pretty much have to have all this. They need all this. And they can’t imagine why anyone would think otherwise.
Both teenagers and people in the higher end of finance imagine that they are smarter than they actually are and can control events more than any human is able to. They can’t understand why we ever doubt them. They aren’t just saying this; they believe it.
Then comes the catch. When they get into trouble, they are quickly on our doorstep saying we absolutely have to help them out. And we are scared not to. We are frightened that the consequences of letting them fail utterly will be at least as bad for us as it is for them.
The moralists and the therapists weigh in with advice about tough love, but we are the ones who bear the consequences of failing to help and the consequences of helping, and we know there are no good choices available.
I once heard a woman speak whose daughter had died from exposure, homelessness and drug abuse. She had kicked her out because she was hoping tough love would bring her to her senses. It might have worked. If it had, she would have been ecstatic. But instead she was called to identify her child at the morgue.
The U.S. taxpayer has a brood of unruly children, and we have been bailing them out because we are scared to death not to. We have bailed out the savings and loans, a hedge fund created in part by Nobel laureates who thought they could predict the future with computer models, Bear Stearns, a big bank, and now Freddie and Fannie. The auto industry is begging for billions in loan guarantees. We have bailed and bailed until we are about broke. Like the parents of unruly teenagers, we know that there are no easy solutions. If we had it all to do over, we might have put a whole lot more restrictions on them in the beginning. But they were persuasive and begged and pleaded that they could handle the freedom we gave them. Now, with our hair turning gray and our bank accounts dwindling, we are being asked to help them yet again. What to do?
Running an economy and bringing up children are both complex jobs. That is because they involve people, and people are complex. They are a mess a lot of the time.
It is just the way it is. I believe we can devise systems that work better than law-of-the-jungle capitalism at one end of the spectrum and a state-controlled economy at the other end. Power does corrupt, so we don’t want too much in the hands of business or government, and we don’t want cronyism that creates a plutocracy of people who swirl about, moving easily back and forth between the two. I think we can do better, but we can’t come anywhere close to perfect, and we will need to monitor and adjust our system constantly.
The stock market went up nearly 300 points when the government indicated a willingness to bail out Freddie and Fannie. Champagne corks were probably popping. Happy Days Are Here Again. The saner souls in the financial industry warn that this intervention won’t cure the crisis, but tell that to a teenager right after you put up his bail and spring him from jail. He’ll worry about that tomorrow. He’s just glad to be out of that cell.
We need a national conversation, a support group if you will, for the long-suffering American taxpayer about how to best deal with our unruly, immature, yet energetic and talented financial community. How do we harness their intelligence, creativity and enthusiasm while blunting the worst of their excesses and poor judgment? We need better answers, and we need them now.
Patricia Hunt, of Staunton, is a chaplain at Mary Baldwin College.