As angry as many people were about the bailout of Wall Street, something else makes people just about as angry: falling stock prices. It is probably for this reason that Washington decided to take the risk and push one of the more outrageously extravagant spending programs in the history of the world. The benefits of rising stock portfolios are concentrated while the costs of a bailout are diffuse. In the political calculus, then, politicians were betting that they would come out ahead.
What’s really at issue is a deeper problem that is culture-wide: the intolerance toward failure. We can’t face it. It is probably a symptom of the economic boom during which all stocks go up, all bets pay off, all homes rise in value, and everyone is slightly richer today than yesterday and half as rich as tomorrow. You just can’t lose. It was true in Tulipmania, the South Sea Bubble, and it has been true in the United States for some ten years or more.
This is the mentality that spreads throughout a society in which the drug of loose credit — based not on savings but rather the paper products of a printing press — spreads to every sector. Every investor is an amazing stock picker and every home buyer a financial genius. But the illusions don’t stop there. The ethos of genius inflation permeates everyone and everything, so that there emerges a culture-wide resistance to the very notion that someone might not be up to snuff.
Read it all.
Jeffrey Tucker: What's Wrong with Failure?
As angry as many people were about the bailout of Wall Street, something else makes people just about as angry: falling stock prices. It is probably for this reason that Washington decided to take the risk and push one of the more outrageously extravagant spending programs in the history of the world. The benefits of rising stock portfolios are concentrated while the costs of a bailout are diffuse. In the political calculus, then, politicians were betting that they would come out ahead.
What’s really at issue is a deeper problem that is culture-wide: the intolerance toward failure. We can’t face it. It is probably a symptom of the economic boom during which all stocks go up, all bets pay off, all homes rise in value, and everyone is slightly richer today than yesterday and half as rich as tomorrow. You just can’t lose. It was true in Tulipmania, the South Sea Bubble, and it has been true in the United States for some ten years or more.
This is the mentality that spreads throughout a society in which the drug of loose credit — based not on savings but rather the paper products of a printing press — spreads to every sector. Every investor is an amazing stock picker and every home buyer a financial genius. But the illusions don’t stop there. The ethos of genius inflation permeates everyone and everything, so that there emerges a culture-wide resistance to the very notion that someone might not be up to snuff.
Read it all.