Reader Question: WuFlu and the Bailouts?

Here’s the latest reader question, along with my reply!

Chris writes: I participate in a “Book Club for Men” at the local library and this month’s selection was “Stress Test” by Timothy Geithner, Treasury Secretary under Obama and New York Federal Reserve president under Bush.

In it, Geithner defends the financial bailouts after the 2008 banking crash and offers his reasoning behind them. He stated how Obama told him “you don’t let a neighborhood burn down because someone was irresponsible and smoked in bed” to illustrate how the administration would have to do unpopular or seemingly immoral things like bail out reckless financial institutions who paid outrageous bonuses to their CEOs while the economy tanked, interfere in private loans and stock purchases, etc., because to do nothing and let the economy fail would be far worse for the country. He felt that since the stock market recovered and the economy grew under Obama, this vindicated his actions as treasury secretary, as he and his team saved America from another depression.

At the end he writes: “…to solve a major financial crisis, you have to do things you never do in normal times or even in a modest crisis. This is the central paradox of financial crises: What feels just and fair is often the opposite of what’s required for a just and fair outcome.”

This sort of “end justifies the means” thinking is rather unsettling to me, but I feel the same precedent is being used in the WuFlu “crisis.”

I often wondered why liberals/progressives didn’t fight back against the lockdowns, when they were the biggest general assault on civil liberties we’ve seen in the U.S. Geithner’s comments kind of answer that though — the lockdown and “mask mandate” proponents see the suspension of civil liberties as necessary toward their “outcome” — the supposed eradication of WuFlu, even if they wouldn’t be tolerated in more “normal” times. How can one argue with logic like Geithner’s? There’s something not quite right about it in my mind, but he seems to use the “can’t argue with success” line of thinking, and the WuFlu “fighters” seem to be just as confident they’ll be successful.

My reply: Well, first of all, there was a financial crisis – whereas the “crisis” we’re dealing with now is a manufactured one. Also, everything being done to ameliorate this manufactured “crisis” is causing more damage than that (allegedly) caused by the “crisis” itself. Without even addressing the fact that almost all the deaths attributed to WuFlu are in fact deaths of the very elderly and the very sick – i.e., the “virus” isn’t much of a threat to almost everyone – we have the fact that tens of millions of people have had their lives crippled because something on the order of 250,000 people have died from WuFlu.

The “cure” in other words is worse than the “sickness.”

I understand, of course, that many believe otherwise – but that is beside the point. And the facts.

As regards the bailouts: Geithner is disingenuous at best and dishonest at worst. The ’08 crash affected greasy large-scale financial cartels such as Lehman Bros. –  not the average person. It is true that many people lost their jobs, but they would have found new ones as capital re-allocated to sound businesses. Instead, money was redistributed from the taxpayer to unsound businesses – like GM, for instance – which were thus spared the discipline of market forces. Had GM gone bankrupt, the unsound parts of the company would have been sold off while the sound ones reconstituted. Instead, the fundamental unsoundness was protected and thus propagated – with the result being that, today, GM sells virtue, not cars.

Fundamentally, I think it’s a mistake to adopt an ends-justifies-the-means approach to public policy as it enables bad people to do bad things while claiming they’re doing good things. Our moral compass ought to always point toward the right thing, even if it means remaining “on course” leads to short-term consequences we’d rather avoid.

Because the long-term consequences are worse – and last longer.

. . . .