Start Bailing

THE BE YOUR OWN ECONOMIST ® BLOG

We’ve had a lot of rain, and many boats have filled with water.

Too bad the powers-that-be stand ready to help bail out the biggest boats only. The small-boat owners, especially those that have taken on the most water, must fend for themselves. Some will continue to float, but many will sink.

Since the big-boat owners had the means to most accurately forecast the weather and make provision for the approaching storm, why offer them the largest share of assistance? Perhaps many small-boat owners were foolish, in the wisdom of hindsight, not to recognize the hurricane’s approach. But now that they are in the water, struggling for shore, can we take comfort as we see them slip beneath the surface?

It was a hundred-year storm from which we all have learned a lesson. Perhaps we have even learned enough to provide adequate safeguards, counseling and warning for the small boat owners. Maybe next time we won’t let outfitters provision them for a journey that they have no hope of completing.

If we stand ready to bolster the shares of Fannie and Freddie and lend them money too……. If we’re prepared to limit short-selling the fat-cats’ stock………… Why can’t we use public funds to write down a portion of Joe and Josephine Public’s mortgage?

It seems only fair.

© 2008 Michael B. Lehmann