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Let’s not reward incompetence

Posted: December 19, 2008 7:08 p.m.
Updated: December 20, 2008 4:55 a.m.
 
Just as there were a lot of hushed conversations about the election, people now mutter about the financial bailouts. We stand off to the side and speak quietly. We watch the news of families struggling, losing their jobs and homes.

Are we being heartless not wanting this bailout - not this way?

Ted Turner said recently, "Why should we bail out losers?" in reference to the failing auto companies. We are bailing out banks that pay their CEOs $20 million a year, yet somehow managed to make incredibly stupid decisions.

Now the federal government has proposed extensive loans to a car industry that has repeatedly struggled, only to prove again and again it can't, or won't, compete.

Proposals abound to reduce both the principal and the interest for people who somehow thought they could afford a $700,000 house on a $30,000 income.

And the newest pitch is to give more money to "consumer lenders" so people can get further in over their heads. I think of two things - mom and the state of California.

Mom - and I tease her only because I love her - reuses paper plates. And paper towels. There's a little stack of them in her apartment right now, no doubt.

Mom and Dad had a rather ordinary American life - a little traveling, but mostly working and raising kids on a wooded Midwestern lot. We were traumatized to have school clothes bought at such fine places as "Farm and Fleet," the thrift store and Sears.

Oh, how I hated that. We mostly went on family car trips, and I have fond memories of all the historical places and national parks we visited.

I also remember Cheese Whiz-and-salami sandwiches eaten in the parking lots of roadside rest areas. Dinty Moore beef stew on a hotplate was our mainstay on nights in hotels.

We got to do some fun stuff, but clearly we didn't have money to blow, and my parents chose wisely what mattered and what didn't.

What mattered - a good home, places to roam, and things that weren't so flashy. I had a full set of braces - saving me dental problems later in life - and a fully paid college education.

As an adult I now know how hard it is to save for those definitely non-glamorous things.

California. How I love it here. Its beautiful landscape and acceptance of individual dreamers, entrepreneurs and innovators is unmatched.

Some of its infrastructure is just a wonder - both the water system and the freeway system have brought order and ease won only through political vision and willpower.

However, California has lost sight of the value of its infrastructure and has become a credit-card state - borrowing more to make payments on loans it took previously.

Every year the hole gets dug deeper. Things fall into disrepair. We do less and less, but it costs more and more because we are borrowing for programs, not for substance.

The bailouts are like California. They need to be more like Mom.

Why do we seek to reward those who profited from bad decisions, and let the suckers who played by the rules stick it out? When we bought our house, much to our real-estate agent's dismay, I backed out after signing all the paperwork.

A completely sleepless night of what-ifs had me paralyzed - what if we couldn't cover the mortgage, what if the market went down, what if one of us couldn't work?

Thank goodness my husband backed off, then talked me into it, and two weeks later we did get the house that we now love. All along we knew it was a risk, but we took it cautiously.

No real vacations for years. No big-screen TV. I believe the sofa is at least 15 years old.

Many times we ran the what-ifs, and accepted the fact that we might have to sell, in a down market, and figured we'd take our knocks if we had to.

So what if, under the bailout, someone could have the exact same house, with a big-screen TV, and an RV, and half the house payment simply because they couldn't understand the loan docs or overestimated their future raises?

They get help because of poor planning or lack of savings? Doesn't seem fair.

Is it really wise, in this age of crushing consumer debt, to put billions more into a system to encourage people to borrow more? Will we not be in the same boat 10 years from now, or worse?

Personally, I'd like to see any bailout be more of a reward. Let's reward businesses that hire American workers. Let's build things of lasting value - roads, schools, and statewide energy and water systems - and put people and businesses back to work.

If we must hand out cash, let it be in the form of a tax credit for securing health insurance, building savings or retiring debts.

The other real risk with bailouts is the precedent they set. Are you successful? OK - nothing for you.
Were you downright stupid - playing a game you didn't bother to understand, or gaming a system you did understand? You - you get a giant check!

Our system should reward those who have played by the rules and taken care of themselves.

Maria Gutzeit is a business owner and Santa Clarita resident. Her column reflects her own views and not necessarily those of The Signal.

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