Most of us have had or will have money difficulties at some time of our life and hesitate to judge others' problems without mercy. Also, it is a given that thanks to Wall Street's gluttony, many of us will be much poorer than before, and the road downhill might be very rocky. I prefer to follow the words of wisdom of Megan McArdle, who reminded us that America's financial system was the best in the world when foolish people started talking about regulating it.
One of the topics that I write about with some frequency is bankruptcy. And
as with the current financial crisis, what's amazing about bankruptcy is how
many people are willing to spend how many hours debating whose fault it all was.
Were the people who borrowed the money irresponsible, or were they taken
advantage of by unscrupulous lenders? Do the people who backed the reform want
to help credit card companies rape innocent consumers, or did the people who
opposed it want to help deadbeats shrug off debts for the fripperies they
acquired? The main object in all of this seems to be to get the mob good and mad
so that we can pick up a stick and whack whatever villain we've
Almost no one ever steps forward and says, you know, hey, it might not
actually be anyone's fault. Sometimes, bad things just happen. And at any rate,
It's surprising how often everyone in the debate over bankruptcy loses
sight of a simple fact: bankruptcy is the legal recognition of the fact that a
person or corporation cannot meet their obligations. It doesn't matter whether
they spent the money on worthy education or a stupid attempt to corner the Pez
market, or a giant-flat screen television; whatever they spent it on, it's
spent, and their current income is not enough to pay it off. Nor is it relevant
that they might not have borrowed the money if they'd been smarter or better
read, or whatever; the did borrow the money, and spent it, and now they owe it.
I'm not talking about fraud here, clearly; any borrower who lied about their
finances, or lender who misrepresented the terms, deserves whatever they get.
Just normal kinds of stupidity, venality, and unlucky accident.
That's nearly the opposite of what McArdle is advocating now, and further proof that McArdle's goal is to comfort the comfortable and afflict the afflicted. If she can advocate forgiveness one minute (as she does in this excerpt and her first post on Andrews) and then start digging up dirt on his wife a day or two later, one starts to wonder about McArdle's motives as well.