Wednesday, April 08, 2009

Consequences Shmonsequences

A friend of mine that is a primary care physician was on his soapbox a couple of days ago. Actually, he was quite entertaining as well as informative.

“I have patients,” he said, “that eat Twinkies and watch TV for a hobby. Not surprisingly, they have high blood pressure. They don’t want high blood pressure, but they also don’t want to take blood pressure medicine. And, by golly, they’re not about to give up their hobby. They whine to me, ‘But, Doc, that’s my hobby!’”

I have a lot of respect for my friend. A few years ago he was overweight and out of shape. He finally decided to take some of the same advice he had been giving his patients. He went on a healthy diet and exercise program and dropped a lot of weight. Now he does triathlons.

“I had a couple in my office today,” my doctor friend ranted, “that do dope as their primary form of recreation. They want me to give them some kind of magic pill that will take away all of the negative physical effects of their drug abuse. In today’s world,” he groused, “you’re not supposed to take away anyone’s personal recreational activity. Oh, no, that would be wrong.”

We live in a world that increasingly promotes a disconnect between choices and their consequences. In many cases, we teach that it is wrong to hold people accountable for their choices. We tell people that they can have their cake and eat it too. When groups have sufficient political clout, we protect them from their choices via public policy (and public money).

When we as a society continually send the message that you are not accountable for your choices and that you can have whatever you think you ‘deserve,’ regardless of whether you have paid the price for that outcome, is it any wonder that we have Twinkie popping, dope smoking dolts looking for a doctor that will mystically make their consequences vanish (all for a $25 co-pay)?

We’re creating a moral hazard. Too many people expect to be bailed out of their bad choices.


Charles D said...

"Too many people expect to be bailed out of their bad choices." Absolutely.

Pardon me if I'm a bit more concerned about the moral hazard of handing billions of taxpayer dollars to banks and insurance companies with no oversight, no controls, and barely even a suggestion of what they should do with the money. That's a moral hazard for sure.

Of course, we are told that we have to do these things because for the last 30 years we have failed to investigate and regulate corporate America with the supposition that people would do the right and honorable thing even if they stood to make millions by cheating, lying and stealing. Perhaps that's not really a moral hazard, just stupid.

rmwarnick said...

The Bush administration and Wall Street are making a clean getaway after committing crimes on a massive scale. So, yeah, there are no consequences. And very little truth, anymore.

Scott Hinrichs said...

I was hoping that using the term "bailout" would help direct thoughts toward all of the recent bailing out going on. It's hard to escape such a massive in-your-face moral hazard. Unfortunately, many sit by and nod their heads whenever anyone says how "necessary" these bailouts are.

Charles D said...

It now appears that while our government is busy bailing out private banks that made risky investments, the "fiscal responsibility" crowd (Peterson Institute, etc.) is suggesting the default on the government bonds held by the Social Security trust fund at the precise moment that the government is honoring trillions of dollars of bonds issued by private banks.

While the government has no legal or moral obligations to pay off the banks' debts to wealthy investors (who presumably understood the risks they were taking), the Social Security bonds carry the full faith and credit of the U.S. government.

(Above from USA Today)

Scott Hinrichs said...

A few months ago, I heard one angry self described liberal call into a radio show. He asked why it is that they are constantly talking about running out of Social Security checks, but never talk about running out of welfare checks. His statement still works if you insert "corporate" before the word welfare.

Actually, the Peter G. Peterson Foundation has long proposed many governmental austerity measures and has also promoted personal financial responsibility. In my opinion, the USA Today article unfairly characterizes Peterson's Social Security proposals and implies that the foundation is in favor of the bailouts.

The Peterson Foundation has made it very clear that the bailouts should never have happened. The article says that Peterson's Social Security proposal is "in response to" recent massive financial losses by people age 45 and over. This is simply not the case. The Social Security proposals were published long before the market had any inkling of going south. In reading through the proposals, I would have to say that Mr. Baker's contention that Peterson is calling for a default of government bond obligations to be twisted rhetorical flourish.

The Peterson Foundation aptly lays out a stark picture of our federal government's financial condition. To put it bluntly, the balance sheet is in awful shape. Even before the advent of our current financial crisis, the projection of future revenue and obligation flows reveals a bankruptcy condition that must be dealt with. The Foundation says that there are no pleasant choices in dealing with this; only hard choices.

But the fact of the matter is that none of the Peterson proposals are going anywhere. The vast majority of them are anathema to the left, right, and center. They are certainly unacceptable to most members of Congress from any party. Still, the foundation warns that the time will come when our nation will be forced to face the facts, even if it chooses to avoid paying the piper for now.

Mr. Baker's USA Today article makes for a fine rant. But it is based on juxtaposing a mischaracterization of a single piece of a large proposal against irresponsible activities by businessmen and politicians alike. Knowing the facts makes Mr. Baker's rant seem rather strange.