The Bailout and Human Nature

Eyes and ears are poor witnesses when the soul is barbarous.    Heraclitus 

Posted mid-Sunday, as bail-out talks continue.  

Pinker complains in The Blank Slate of the increasing emphasis in the 20th century on nurture.  This may well have increased our sympathies for others, but has led us to undervalue human nature and therefore not consider moral hazards that tempt it.  Our experiences are so variable and their impact so ambiguous, we may be quick to assert effect where none existed – or emphasize it when convenient.    Indirectly, we came to devalue that third and most personally consequential component – human agency.   We say, “Officer Krupke, I’m down on my knees” and grin, but we aren’t always ironic.  Our experience and history, however, should make us more optimistic and also wary:  men can be good (and remarkably so) and men are fallible.  (Sinners some might say, while the Deists find us prone to errata.)   A culture’s use is in restraining us from being our worst and encouraging our best; the more those restraints and rewards are internalized the smoother, more productive, and happier our lives. Our goal is not too many laws but good ones, not many restraints but necessary ones. 

The general consensus is that increased subprime lending encouraged by Congress led CEOs to make bad loans.  We are selfish, our vision narrowed to our time and our profit:  the home buyers may have been naïve but also wanted a free lunch; the CEOs wanted to please Congress – the source of their jobs, power & money; Congress wanted to buy votes, increase campaign contributions, and purchase their own houses cheaply.  Those least likely to feel the consequences of their follies are in Congress.

Which is a long way around to the point:  What the hell were Dodd and Frank doing writing a version of the bailout?  Why do they think they should?  Why does anyone else listen to them?  Isn’t having a dog in that fight exactly the reason for recusals?  Is there no moment when we say your history has undermined your authority?   

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Our Poker Game vs. Saddam Hussein

From a comment by Aaron C. at Vodkapundit:

The Iraq war was a no brainer. Saddam had been a threat to the region which prevented growth and development throughout, he used the implied threat to bully neighboring countries, al qaeda types and other small minded anti-americans saw allowing Saddam’s apparent (real or not) transgressions as taking face from America, and Saddam’s large army and the uncertainty of WMD made taking on Iran impractical.
 
We had pocket Aces, the flop was two Aces and a King. Saddam was bidding up the pot and bullying his neighbors suggesting he had a full house. What are we supposed to do, fold? We have 4 aces, it doesn’t matter whether or not Saddam has the boat. If he wants to go all in, you take him all in.

Worth reading in full.

Bail out links

Update, October 2:  Wall Street Journal lists a chronology of links leading to current crisis

 

Links gathered from our blog & others about current financial crisis:

Jonathan:  Healthy Banks to Congress ; Lex:Opposed economists & Bailouts Depressing historical parallel   Blogs:  Gary Becker , superman’s cape   Visual histories:  Fox , Weekly Standard, Mishu: The Mouth Peace; Old editorials:  Paul Gigot A more humerous approach

David Foster suggests four useful blogs:  MaxedOutMama, Calculated Risk, The Big Picture, Hussman Funds  Another blogger (via Insta):  Granitegrok

Update:  Another Visual (via Instapundit) of 2004 hearings

If anyone wants to add useful discussions or believes some here are not useful (and know more than I do which is pretty much anyone who posts here), then put others in the comments & I can add them above; or give reasons for their lack of insight or skewing of history that informs us.

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