Our Bailout Culture and the Beauty of Bankruptcy


By: Selwyn Duke

The story of the Prodigal Son teaches a beautiful lesson about repentance and forgiveness. As you may know, it involves a lazy, irresponsible young man who insists upon taking his share of the family inheritance immediately and striking out on his own. He then proceeds to squander it on a dissolute lifestyle and ends up destitute, living like an animal. Duly chastened and humbled and purged of his spirit of entitlement, he approaches his father in contrition and asks for aid, saying that he would be satisfied to just be treated as a servant. The father, overwhelmed with joy, forgives his son, proclaims him “found” and holds a celebration commemorating his return. Of course, the idea is that he was “found” spiritually; he had developed wisdom, the capacity to not just manage money, but life.

Now, after 2000 years, we have gone from Prodigal Son to prodigal sin, and I imagine that today the story might unfold quite differently. The son’s problem would probably be related via cell phone, be chalked up to a matter of money, and remedied not with character formation but cash flow.

We have all seen this new story, these parents who will bail their children out of trouble – financial and otherwise – time and again, never allowing them to learn through suffering the consequences of bad decisions. I can think of one case in particular wherein a couple I know of spent a lot of money to ensure that their teenage son wouldn’t temporarily lose his driving privileges after a traffic infraction. When I mentioned to the mother that her bailout didn’t teach responsibility, she sheepishly said something to the effect of how she couldn’t help herself.

Yet the truth is that many of us, with children and without – and most notably right now those of us in government – can’t help ourselves. We seem to have forgotten that not allowing people to suffer consequences has consequences. The reason for this was perhaps expressed best by English philosopher Herbert Spencer, who said, “The ultimate result of shielding men from the effects of folly is to fill the world with fools.”

Given what figures most prominently in media and minds right now, it’s not hard to know what I’m referring to. Main Street wants to bail on Wall Street and Detroit, not bail them out, and more sympathetic I could not be. We may very well be throwing good money after bad, and, regardless, the people doing the throwing aren’t throwing away their own cash. But they sure pitch like Roger Clemens; it’s stimulus this, 700 billion that, here a bailout, there a bailout, everywhere a bailout-bailout. Old McDonald had a country . . . and we’re having a cow.

Really, though, if we want to know the reason for these government bailouts, most of us need look no further than the mirror. Sure, people may say they oppose bailouts, but it’s not usually true.

Most Americans have no problem with them at all, as long as they’re the ones getting bailed out.

This isn’t really surprising, as people tend to refuse money like politicians refuse votes, which is why votes are so often bought with money. Yet the problem goes far deeper than the financial; it stems from the philosophical. As I indicated earlier, we have become a bailout culture. Parents bail out children lest the little snowflakes have their feelings hurt. Schools then follow suit, bailing out students through social promotion and an overall lack of accountability. Emily Friedman wrote about some examples of this, such as a policy known as “Zeros Aren’t Permitted” (except when embodied in school administrators) at one Boston area middle school, which gives lazy students the opportunity to do unfinished homework in school, which I guess makes it schoolwork. The title of Friedman’s piece asks, “Are Children Coddled?” but such a question is anachronistic. We long ago passed the coddling stage and transitioned into the “exaltation of stupidity and shiftlessness” stage.

Without a doubt, we continually bail out those devoid of brains, ambition and/or industriousness, whether they be rich or poor, domestic or foreign. For instance, there are people – and many of them are Daddy Warbucks – who insist on building homes in areas prone to floods, hurricanes and earthquakes and who do not or cannot get insurance to cover their dangerous living. Yet they don’t have to fear an act of God because they can count on an act of government, meaning, they will get money that often comes from people of far more modest means.

A bailout is really a handout, and the aforementioned variety is branded “disaster relief,” but it takes many forms and masquerades under many titles. We bail out illegal aliens when they cross our border for medical care, and many Americans want to offer them another bailout known as amnesty. We bail out the lazy as well as the needy with welfare, food stamps and other programs. Then consider that some politicians want to bail out the intellectually lazy (and corrupt) as well. Yes, believe it or not, they want to give our money to the ailing newspaper industry.

Now, don’t misunderstand me, because I firmly believe in charity. When a private entity bails out someone who through no fault of his own is in dire financial straits, it’s a beautiful example of man’s humanity to man. Moreover, even a correct understanding of our Constitution – which is as rare as accountability today – allows state and local governments to establish a social safety net. (In keeping with the principle of subsidiarity, however, the private sector should be the first line of defense here.)

But our bailout culture is a perversion of charity – and one that touches everything. Putting our heads together, we could probably fill 10,000 more lines with something to the effect of, “We bail out so-and-so when we _____,” but the point has been made. Far more often than not nowadays, we don’t teach people how to fish; we give fish to those who could cast a line but would rather fish for others’ funds. We tend to not practice healthy charity but facilitate irresponsibility.

In light of this, why would we be surprised that irresponsible politicians elected by irresponsible people want to lavish money on irresponsible businesses? Our problem isn’t isolated to finances; it is part of a deep cultural malaise permeating every national pore. To think otherwise is like looking at the Prodigal Son and thinking the problem was just one of finances. In both cases, it reflects a moral defect, an irresponsibility that is only corrected through exposure to consequences.

Of all our bailout babies, perhaps the best example of a bad example is the Prodigal State, California. It now may be out of cash in February, and some have floated the idea that it should receive a federal bailout along with everyone else who isn’t you or me. But I say let Ca and every other profligate entity collapse under its own weight. There is beauty in bankruptcy.

People are people, be they in the Bible, business, government or grammar school; they all operate by the same principles.

Politicians may dress smartly and know how to tie a fine Windsor knot, but money burns a hole in their pockets just as it does with a toy-craving ten-year-old. And this is the problem in Ca; its government has descended into the immorality of über-statism, as it vainly tries to play the paternal role with a juvenile sense of responsibility. A bailout would only perpetuate the foolishness and postpone the day of reckoning.

Bankruptcy, on the other hand, is one of the best ways to bring big government to heel. For just as a compulsive gambler will continue playing the casinos until his well runs dry – and giving him money just delays the inevitable – statist politicians will keep spending until there is nothing left to spend. So let state and local governments shut down and suspend services. Let them twist in their own ill wind. Let them languish in a self-created debtors’ prison. In the same way the bankruptcy of a corporation can lead to a sale of assets that will allow more prudent heads to take the helm, government collapse can lead to necessary restructuring. Failure can shrink the big government of profligate statists just as it does the big heads of profligate young men.
Today we have many prodigal sons but precious little repentance. They don’t need to be bailed out but bawled out – by life – because irresponsible people rarely change their ways unless forced to do so. And if allowing them to be disciplined by circumstances they created themselves is beyond us, then we are simply a Prodigal Nation, and such a place cannot long exist. After all, in just the way that failure to remove a gangrenous limb results in the death of the body, the body of a nation suffers the same fate when it doesn’t allowed defective parts to be reformed or replaced.

Remember, to gravitate toward a system that seeks to bail everyone out is to move toward the standard of “. . . to each according to his needs.” This didn’t work very well in the Soviet Union, and I don’t know how much better we will look once our wall – that ever-growing one between responsibility and state – finally falls.

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