Punchinello’s Chronicles

September 15, 2008

Let’s Bail Out Everybody!

Where’d that expression come from, “bail out?” We know that if you get arrested, someone may be willing to bail you out of jail, right? The word “bail” likely comes from the Latin word, “bajulare” which means “to bear a burden.” If someone bails you out of jail, they bear the burden of paying the state if you skip town.

Another image that comes to mind is a sinking lifeboat. Water’s coming in over the sides and everyone starts bailing like mad to get rid of the water. They toss it back out over the sides, into the ocean. “Bail,” in this usage, likely comes from the French word “baile, or baille” meaning a bucket.

To bail someone out of jail means having an abundance of money. You’re willing to risk losing that money to the state if your friend splits town and runs away. The bail money is supposed to be important enough that if you provide your own bail, you’d sure hate to lose that money. So you appear in court.

Abundance: That means having some extra money, or a lot of extra money. Let’s see; we’re hearing that the US economy is going broke, Social Security is broke, there aren’t enough tax revenues, and we NEED to raise taxes in order to pay for everything! We’re told that rich people aren’t paying enough, poor people ain’t got no insurance, and who knows what we’ll do if another hurricane comes by!

So where’s all this money coming from to bail out the mortgage industry? Who’s ponying up the bucks to fix the automobile industry, electronics industry, airline industry, fishing industry? Why don’t we just be done with it and bail out Everyone! If we’re all sinking, let’s all bail each other out!

Who cares if you borrowed thousands of bucks on a credit card and can’t pay it back? “It’s not your fault,” we’re hearing, and the government should bail you out. Did you buy a house you couldn’t afford? Hey, someone’ll bail you out. Got too many kids and can’t afford to keep them alive? What the hell, apply for a bail-out loan.

What happens if the person who writes the check for bail money bounces the check? Or how about this: Suppose 90% of the population suddenly gets arrested. Can 10% of the population come up with bail to keep the whole population out of jail?

Then there’s the question nobody likes: Isn’t anyone responsible and accountable for their own bad decisions? Should we bail out serial killers? What about politicians or corporate executives who commit serial crimes? What if I get arrested and you get arrested, and we each lend ourselves the money to bail each other out? Would that work? Would the court bailiff figure it out?

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5 Comments »

  1. This whole week has pissed me off. I live out in California where all houses are ridiculously overpriced. Me and my Wife make good money, but still- 500 or 600k for a crappy starter home is asinine.So for years we’ve been socking it away, waiting for the inevitable to happen: the bubble burst.

    Common sense would suggest that falling home prices means that people can suddenly afford homes again. People buying homes= money in the pockets of banks, who can then lend to other home buyers and college students. In other words, affordability is what drives the US economy because if we can’t afford something… we don’t buy. That is unless clever little loan products enable us to cheat our way in.

    So here we are, ripe for a nice little housing correction. But no- that will never do. Instead, the government can’t allow that to happen. So thus they bail out not only the two largest mortgage lenders, but as of today- the entire banking system. For what? So that Johnny paycheck can keep right on getting loans to buy overpriced houses.

    The reality is that no matter what the Fed, the government, or anyone else does, prices will fall, and do so until real people can afford to buy… which is precisely what would have happened if nothing had be done, only it would’ve happened sooner than later.

    Comment by bobwilson1977 — September 18, 2008 @ 5:50 pm | Reply

  2. You want to really get mad? I’m in my middle 50s, and finally getting around to reading some textbooks on economics. I started with Lester C. Thurow’s “The Zero-Sum Solution,” written in the late 1980s. He explains exactly what’s been happening for the past 30 years and more, in pretty easy-to-read language. What we’re seeing in the housing industry and enterprise bailouts is just the tip of the iceberg! If you want to keep that nest egg, put it into gold for the moment, until the rest of the bank collapses shake out. Then we’ll see if the housing prices actually come down.

    Comment by Punchinello — September 18, 2008 @ 10:19 pm | Reply

  3. Well, As we can now see, the government is enacting perhaps the largest bailout in US history. We’re talking the potential for the government to basically take all of the toxic loans off the hands of banks.

    What’s happened is that the entire mortgage industry has now become nationalized. This in turn might become a good thing since perhaps then, more regulation will mean that housing prices will also become more regulated due to the simple truth that if prices get too high and above what real wages and mortgages can pay, then the prices will adjust versus creating more and more loan products that increases debt and risk.

    Again, we live in California. The Bay Area to be exact. For young families like me and my Wife, whom make well into a six figure income, there are still very few choices for us in regards to buying a house.Most homes in even remotely nice areas are still hovering around 500K+. That’s not acceptable. So to me, when I see bailout after bailout, all engineered to somehow prop up the mortgage markets, I can’t help buy become infuriated because the real solution is to let prices fall to become more affordable.

    Comment by bobwilson1977 — September 19, 2008 @ 9:41 am | Reply

  4. There’s the bottom line: nationalze and regulate. We’ve seen that the 50-year plan, so to speak, of modern day socialists is to nationalize the US economy and regulate everything from a central government. There was for awhile a move toward decentralization, but “somehow” that hasn’t worked very well. We’re seeing a move toward national healthcare under the guise of expense and mismanagement. Now comes nationalized banking, nationalized lending, and the government becoming owners in the auto, textile, steel, and other industries.

    Comment by Punchinello — September 19, 2008 @ 2:26 pm | Reply

  5. Look, if my business fails because I made bad choices, I have to pay the bill. Nobody is going to step up and bail me out of that situation. I am pissed off when I hear that goldman execs are going to be compensated as a component of this government buy out plan. Seriously.. wtf?? Every penny any executive has should go directly towards paying off investors and the cost of going out of business. They made the bed, now they should have to sleep in it.

    If you were dumb enough to buy a house you couldn’t afford, you too should have to pay the price. Good lord did you really think this was a Milton Bradley game?

    Comment by joeseattle — September 24, 2008 @ 6:24 pm | Reply


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