Work and Days

“Go Fail, Young Man!”

An end to failure seems to be the new American creed of the twentieth-first century. If you were on Wall Street, and bought and sold subprime mortgage paper, gambled on derivatives, garnered spectacular bonuses as you piled up debt—and then helped to bankrupt your investment company—the government was often there to ensure that your past profits were your own, and your present failures everyone else’s. In our brave new world, no one took too many millions he didn’t earn, or was a fool who squandered someone else’s 401(k)s. Instead, nebulous forces, not real people, did this, and so an equally nebulous “government” must set things right.

If you were a federal banking bureaucrat at Fannie Mae and Freddie Mac, and enriched yourself by cooking the books under the politically-correct cover of putting the poor and unprivileged in homes of their own—at the cost of ruining hallowed institutions— then no problem: you failed; others cleaned up your mess; while you sought refuge in victimhood with millions in past bonuses.

For much of the 1990s, the Big Three auto companies preached the gospel of let the market adjudicate popular tastes in automobiles, when warned that their big-profit Tahoes, Yukons, Hummers, and Escalades might make both America more vulnerable to foreign oil spikes and themselves at the mercy of a sudden radical shift to small cars should gas prices ever rise.

Then energy prices spiked. Consumers did not want any more 15-mpg behemoths. Cars went unsold—and Detroit then asked for, and received, a bailout guarantee to cover their own failures. We never heard that the CEOs, the marketers, the advertisers, and the designers failed—only that union health care costs, or market forces, or consumer choices did the automakers in, and thus the government had to intercede to save automakers from themselves

But at the other end of the spectrum, failure is becoming just as obsolete. We are told hourly that millions of Americans have lost their homes, rarely that 94% of home debtors continue to pay their monthly mortgages. And there is almost no information given on how or why those who defaulted walked away? Did at least a few buy a house who had no business taking on a mortgage? Did at least some wish to speculate, buy property, flip it, and profit in a perceived permanently bullish housing market? Did some others take out second and third mortgages to expand their consumer spending and hope to make it deductible on their income taxes? Did others still simply make a business decision to walk away from a freely incurred debt that proved larger than the falling equity in their homes?

Yet it seems to matter little how these mortgages failed, since both political parties are now outbidding each other to offer some sort of debt relief, mortgage reduction, or suspension on foreclosures. Indeed, no one failed at all—“they” (fill in the blanks with “the banks”, “the economy” or “George Bush”) caused the defaults, and so “they” should make it right.

Listen to almost any Congressman, or tune in to radio ads, and rather quickly you will hear a plan to bail out those with onerous credit card debt. No one dares to ask anymore what was charged on the Visa or Mastercharge. Were such debts always heart operations or food purchases to stave off hunger, rather than an occasional plasma television, video game, or vacation? Instead, the failure to pay one’s debts is assumed again to be the fault of someone else.

The message in all of these cases is now becoming unmistakable: if you are hyper-wealthy, gamble with someone else’s money, and lose big-time, then the government will cover your losses. Or better yet, work for a quasi-government agency where the bonuses are yours, while the losses belong to the public. If you build the wrong car, and bet wrongly on the future price on gas, then your successful gambles make you rich, and in times of miscalculation your government covers your losses. And if you buy a house beyond your means, or decide it makes no sense to pay off the mortgage, then someone or something, not you, failed to honor your debt.

But what happens if you are not enormously rich and not rather poor—and, worse still, made the ethical, but old-fashioned decision to pay your debts and not default on what you owe others?

Let us hope that you do not make over $250,000 like many family physicians, small business owners, or restaurateurs. You are way too big to be part of the fifty percent of wage owners who would, under the Obama tax plan, not only be excused from income taxes, but in many cases receive a check from the government.

You are also way too small to be a corporation in need of a bailout, or a megafarm that needs more agricultural subsidies. Instead, as a reward for belonging to the 4% who pay 60% of the nation’s income taxes, and working industriously to achieve an enviable income, you may well soon pay between 60% and 65%—or more— of your gross income in state income, federal income, Medicare, and social security payroll, taxes. And you will be considered the suspect “rich” and then told it is “patriotic” to “spread the [rather than your] wealth around.” Nor can you sigh that your tax liability will ensure that the deficit disappears—not when another trillion dollars in federal entitlements are promised by would-be President Obama.

In the mid-nineteenth century, young people of industry and vision were advised “Go West, Young Man!” Today we might instead suggest “Just Fail!”