Sunday, April 6, 2008


A basic tenant of Capitalism is the right to fail. If each of us is to be allowed to pursue our ambitions without interference then we should accept the consequences if we are not successful. This has been blurred over the 200 years of existence of our country. We have come to expect sympathy and handouts instead. Should we become rich then in our greed we demand lower taxes on income whether it be in wages or profits from capital gains or dividends. Should we fail we demand to be rewarded for our failure. There are many examples of this. To name a few of recent times;
1- Just this week the U.S. Senate approved an addition $1 billion to cover losses from hurricanes Rita and Katrina. Included in this are grants of up to $150,000 per homeowner and accelerated depreciation for businesses. Sure the hurricanes were tragic, but I ask was there insurance available which was not purchased because it cost too much? Were the homes destroyed worth as much as $150,000? From the ones I have seen on television, I would conclude that they weren’t. The billions that have been poured into this area for the most part were wasted. This is usually the case. The treasury is opened, vultures dive in to get as much as they can. Few dollars actually reach those most in need.
2- West coast salmon fishing industries. The salmon have been fished to near extinction. The government is considering a complete shut down this year in a desperate attempt to allow the species to rejuvenate itself. Those affected are fishermen, the tourist industry including accommodations, restaurants, supply stores and others. When business was booming they were happy to take their profits but now they are demanding handouts to cover their losses.
3- After the 9/11 tragedy, everyone it seems, living and working in the N.Y.C. area, requested and received generous handouts for lost income. I doubt if anything like proof was required.
4- One of my favorites I became aware of in 1987, when we went to Chapel Hill, N.C. to visit my daughter Amy on her spring break. We spent it on the outer banks. While driving along the narrow sand strips that are the outer banks we saw homes built on stilts, obviously very vulnerable. Hurricanes routinely strike this area with houses demolished. The homeowners could not buy insurance from private carriers but guess what our government does, which means that you and I on foot the bill.
5- The current implosion in the value of residences is another example. During recent years the value of homes escalated at an accelerated rate, far above realistic expectations. I remember an article about a doublewide manufactured home in California that sold for $1 million.
Families all across the country went on a binge buying and selling, making tremendous gains. Home ownership has always been considered a wise investment. Down payments of 20% were required. Proof of ability to pay the mortgage was essential. With that 20% cushion, a mild recession would still leave the mortgage less than the reduced value. When and how this reasonable standard was discarded I do not know nor am I willing to research, but it was. Millions purchased homes without any down payment at all under the stupid assumption that values would always increase. Sitting on a park bench watching my granddaughter play on a swing set I overheard a conversation between several young mothers about this person or another who had sold homes making hundreds of thousands in profit. People with mortgages took funds out to spend on other of life’s enjoyments still with the same premise that their homes would continue to rise in value. Now that housing is losing value, they are demanding that the government bail them out. Congress, together with presidential candidates, is falling in line to do just that.
Bear Sterns is bailed out by the Federal Reserve to the tune of $28 billion in guarantees all the while the corporate chiefs continue to receive outlandish financial compensation. This was a first. They also pumped $20 billion into the banks to keep them solvent. In addition they have dramatically lowered interest rates. This has a very adverse result for people like me who withdrew from the stock market and put into fixed investments like money market. The interest is not enough to balance inflation. Do they care, of course not? Their only concern is for the huge corporations who created this mess in the first place.
As usual when find an issue outrages me, I start pecking on my computer knowing full well that what I write or say will have no impact on the course of history. The books are stacked against the little guys of this world. Nonetheless I still insist that freedom to do as we wish includes the right to fail.

Jack B. Walters
3961 N. Hillwood Circle
Tucson, AZ 85750
(520) 722-2958
April 6, 2008


arizonahiker said...

Makes sense to me Jack, also you may get more comments if you can allow anonymous comments, most folks won't comment if they need an account and have to sign in.

Jerry Dean

drsam93 said...

I once heard the Japanese called America "the land of second chances." Certainly applies here.

The most difficult issue to deal with in the education of children, and in sports participation of children, is that many parents won't allow their kids to fail. Parents put enormous pressure on teachers and coaches, as well as their own kids, when in fact, not every kid can be a straight A student, or the star of a team.

Let me also comment on Jerry's reply. I firmly believe in the First Amendment. However, I do not believe that the framers of the Constitution thought free speech should be anonymous. If someone is afraid to attach their name to a comment in a public forum, then what they have to say is not worth reading, in my opinion.

These days, the Tucson Citizen and on-line blogs encourage anonymity, which does not teach the responsibility of one's speech. Hiding behind anonymity is wrong when it comes to Free Speech, in my opinion.

Sam McClung

arizonahiker said...

A repy to Sam's views about anonymous comments, I meant that if one could reply without the need to have an account it may lead to more comments, I didn't necessarily mean that one would not attach their name to their comment. I comment on several blogs that do not require me to have an account and always attach my name.