We always get back to the same place, don’t we, whenever something goes wrong — the place known as How Can the Government Help?
Already Democrats, without too much contradiction from nervous Republicans, are sifting ideas to help the subprime mortgage victims keep their homes despite rising mortgage costs. Denunciations of "predatory" lending practices fill the air, though I’m not aware of a single presidential candidate’s having fingered specific predators — or even having attempted to prove that predatory practices are at the bottom of the problem.
Meanwhile Hillary Clinton talks of a $1 billion federal fund to help families likely to find themselves sitting on the curb outside their former houses (or, much likelier, moving into apartments or rental houses). The New York Times on Sunday ran a poignant photo of a father and young son about to be ousted from their home.
This stuff hurts. Home ownership is, allegedly, the American dream, notwithstanding that only in recent decades have a majority of Americans actually owned their homes. Americans don’t like the idea of other Americans losing homes and hopes. In which attitude there’s much to applaud.
Still, the other side of the coin needs a little burnishing. Any economic system — in particular the free market system, which is risk-based — presupposes winners and losers. That you don’t win isn’t necessarily your fault. Bad luck could be responsible — as when, in a rush of exuberance, one has borrowed a sum hard or impossible to repay, expecting, like Wilkins Micawber, that "something will turn up." But it doesn’t. Now what?
Now some hurt. It sounds heartless to talk clinically of other people’s hurt, which is one reason politicians come running with the balm and bandages at times like these. We’ve come to expect it. In a country where everyone votes, or at least can, the call for government aid is inevitable, even proper up to a point. How pleased would we be as a people if standard government practice was to judge victims of various kinds a bunch of worthless losers, unworthy of the winners among us?
The question, really, isn’t whether to help; the questions are how much to help, and at what public cost. A protective layer of government "compassion" that insulates citizens from the consequences of bad choices does little for anyone but the politicians — and in their case, only as long as their little game goes undiscovered.
Emergency relief — food, shelter, clothes — is one thing. Protection, as a matter of policy, from bad decisions (e.g., borrowing without the means to repay) penalizes good decisions. It says to citizens, don’t bother to plan, to save, to reason things out, to act with discretion and judgment, because if you do blow it through carelessness or irrationality, along the government rescue wagon will come, bells jingling and dollars flying through the air.
When the course of least resistance works, it becomes the course increasingly preferred by the majority. Where’s the incentive to make good decisions if bad decisions pay off? Pain hurts — yes. It also toughens and strengthens, concentrates the mind wonderfully on those tasks needful to avert it in the future.
Nor are voters, generally speaking, so dumb they never figure out the ruinous consequences — moral as well as economic — of rigging outcomes and rewarding bad luck. Sen. Clinton isn’t talking morality — of this kind anyway — and she certainly isn’t talking economics. She’s talking politics — the acquisition of votes through a species of bribery disguised as good old American compassion.
Blessed are the merciful, we are advised on High Authority. And cursed, in considerable degree, are those whose politicians pretend to preside over a bed of roses in which difficulties wilt away and no one gets pricked by thorns — and if someone gets pricked anyway, his representatives in Washington will find the culprits, you bet, and make them pay. Them and everybody else around.