"Just so. Just exactly so."
The chief argument against bailouts is they "privatize profits and socialize costs". "In the financial language of options, "socializing losses" corresponds to private firms having a put option from the government: if they lose, the government will cover their losses." For this to happen of course government must be involved in the economy. And a lot of people like it that way. But once certain activities are deemed too important to be left to the market or "too big to fail", the public purse because commingled with the private.
Then we have bailouts whether they are called that or not. Take Xavier Alvarez.
He is a Democrat Party politician who elected to the Three Valley Water District Board in San Bernardino County, CA and claimed to be a ‘retired marine’ who had been ‘wounded’ in combat and had been awarded the ‘Medal of Honor.’” Here is a picture of Alvarez wearing his supposed decorations. He claimed the Medal of Honor was awarded for rescuing the American ambassador during the Iranian hostage crisis.
Now it may be a sad commentary on the state of education that Mr. Alvarez could actually make such a claim and have anyone believe it, but at any rate someone finally called him out and he was convicted under the Stolen Valor Act.
The Ninth Circuit Court struck down the conviction of Xavier Alvarez. In striking down the conviction, the court cited New York Times vs Sullivan, in which the US Supreme Court held that the NYT could not be held liable for printing falsehoods provided it intended no malice. The decision has been hailed as a cornerstone of Free Speech.
Notice however, that Mr. Alvarez privately gained by his lie. The prestige conferred by the nonexistentMedal of Honor must have significantly enhanced his resume. Therefore whoever believed Mr. Alvarez was defrauded by his claim. Imagine if one hired a bodyguard believing he was Audie Murphy and found he was really Pee-wee Herman. While you might be fond of Pee Wee Herman for his comic ability, you deserve your money back if you expected a man ready to repel 200 fanatic SS troopers intent upon killing you.
But Alvarez will not bear the full costs of his lie. He might yet claim the protection of the First Amendment. He lied, but you can't call him on it criminally. Perhaps civilly, so go hire a lawyer. As far as the Government's concerned, there may be no foul.
Just yesterday in the UK, a sting operation revealed that National Health service doctors were approving abortions solely because of the child's gender. Some 'patients' went up to a doctor and said, 'I want this baby dropped because I don't want a girl.' Others said that they wanted the abortion of a boy because they already had one and wanted 'family balancing'. The doctors said, no problem.
One consultant, Prabha Sivaraman, who works for both private clinics and NHS hospitals in Manchester, was filmed telling a pregnant woman who said she wanted to abort a female foetus: “I don’t ask questions. If you want a termination, you want a termination”.
But whose money was going to be used to provide the abortion? Why the government's money of course. Or to be more precise, the taxpayers.
Leaving aside all other issues, we still have the question of private gain and socialized costs. Inevitably the children of those who have children are going to be taxed to provide for the couples who decide not to have children once they become too old or sick to work. The people who had children cannot privatize their gains. They cannot reserve the taxes paid by their children for themselves. That will be selfish. The ever caring government has decided that taxes are going to be used to socialize the costs of everybody, including those who had an abortion at taxpayer expense for whatever reason they might have.
Situations like this are bound to occur whenever public and private interests get mixed up. To keep these wholly separate is probably impossible unless man can learn to live without government. But the more government there is, the more conflicts of this nature will arise.
As Richard Epstein at the Hoover Foundation noted, government already believes it is within its power to ask private entities to give away stuff for free. It can withhold the services already paid for by taxes unless certain suggestions are carried out. Citing Obamacare's contraception and abortion provisions, Epstein wrote:
The political furor has forced the president to back down on the direct command to religious institutions. But now bitten with the statist bug, he just announced that all insurance companies who participate in programs funded through the PPACA will be required to offer the same suite of women’s health-care services for free.
Of course it's not really free. Somebody has to pay for it. But not the consumer of the service. That consumer can privatize gains and if things go bad, socialize the losses. As the size of government's role in human life increases, the instances of bailing out behavior correspondingly rise.
How long can this work? In the case of Europe, not long. As Mark Steyn observes, Europe is running out of people, killing off the next generation at taxpayer expense.
So Greece has a spending problem, a revenue problem, something along those lines, right? At a superficial level, yes. But the underlying issue is more primal: It has one of the lowest fertility rates on the planet. In Greece, 100 grandparents have 42 grandchildren — i.e., the family tree is upside down. In a social-democratic state where workers in “hazardous” professions (such as, er, hairdressing) retire at 50, there aren’t enough young people around to pay for your three-decade retirement. And there are unlikely ever to be again ...
How do you grow your economy in an ever-shrinking market? The developed world, like Elisabeth, is barren. Collectively barren, I hasten to add. Individually, it’s made up of millions of fertile women, who voluntarily opt for no children at all or one designer kid at 39. In Italy, the home of the Church, the birthrate’s somewhere around 1.2, 1.3 children per couple — or about half “replacement rate.” Japan, Germany, and Russia are already in net population decline. Fifty percent of Japanese women born in the Seventies are childless. Between 1990 and 2000, the percentage of Spanish women childless at the age of 30 almost doubled, from just over 30 percent to just shy of 60 percent. In Sweden, Finland, Austria, Switzerland, the Netherlands, and the United Kingdom, 20 percent of 40-year-old women are childless. In a recent poll, invited to state the “ideal” number of children, 16.6 percent of Germans answered “None.”
Far be it for anyone to suggest that Europe should be prevented from choosing demographic extinction. But that's not really going be the case, is it? When the crunch comes the aging population cohorts will require health care and physical defense -- the average age of the Belgian army is 40 and its main human resources problem is that 60% of its soldiers were overweight -- not to mention a pension.
It is hardly conceivable that some future American President will say, "yup. Die". Yet those things -- which people opted out of -- have got to come from somewhere -- the carers will probably come from the Third World, the defense from America, the money from who knows where. But it's not going to come from Europe.
That situation in macro is the consequence of the micro decisions by the NHS to fund gender-determined abortions for "free". The former is simply measured in the millions while the latter is measured individually. How long can private gain and socialized cost coexist? How many things are really too big to fail? How many shibboleths are to sacred to question?
The answer maybe is not many more. And not for long. At first it seems it will have less to do with 'religion' or 'morality' than just the bucks; the slimy, dirty dollars and cents. Or maybe that is to do mammon an injustice. Long term existence is very often the consequence of a value system that favors survival. If your value system doesn't work, you won't survive. So maybe it is about morality after all.