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How ethical is the pending Wall Street bailout?
By Lauren | September 24, 2008
This afternoon I had the opportunity to watch the Senate hearings on the proposed Wall Street bailout. It’s not surprising that legislators on both sides of the aisle are revolting against the current proposal to authorize the Department of the Treasury to buy out approximately $700 billion dollars of bad debt. Many issues on the minds of taxpayers - foreclosure avoidance, CEO compensation, and greater accountability in the financial world - haven’t even been addressed. In other words, the American public is being asked to pony up for the biggest bailout in the history of the United States with very little idea of what their tax dollars would actually buy. And, according to former Federal Reserve Chair Alan Greenspan, even the enormous amount of money on the table right now may not be enough to do the job. Kentucky Senator Jim Bunning quoted Greenspan today as saying that $700 billion is “chicken feed” that won’t begin to clean up the mess on Wall Street.
There’s no doubt that something needs to be done. International financial markets are beyond jittery, and the U.S. economy will suffer lasting damage unless quick action is taken to solve this problem. But our nation is already facing a $482 billion dollar deficit - this buyout would more than double that enormous debt. Is it too much to ask that the American people be given some reassurance that taking on this massive obligation will actually solve the problem at hand? And what, if anything, will lawmakers do to hold accountable the people who knowingly brought this disaster down on the American public, and to prevent anything like this from ever happening again?
My readers know that I’m not a great believer in mortgaging the future to cushion the present. How ethical would it be for this generation of Americans to foist the cost of the Wall Street subprime mortgage mess onto future generations, perhaps for many decades to come? Then again, how ethical would it be to allow a train wreck now, perhaps permanently damaging America’s creditworthiness and place in the future world economy, if a bailout will truly prevent that lasting harm? And, for that matter, where are the “wizards” of Wall Street who created this disaster, and why haven’t they come forward with apologies and help with planning a plausible way ahead?
Last week, one Member of Congress was quoted as saying that all of the legislators are eager to end this session and go home because “no one knows what to do.” I appreciated his honesty, even though his comment was pretty scary. This problem is truly unprecedented, and our leaders are as human as the rest of us. I just hope that, as they work toward a solution, they focus on how to come to an ethical outcome, not just how to kick this can full of toxic debt down the road.
Topics: Business Ethics, Social Ethics, corporate responsibility, ethics |
September 24th, 2008 at 1:30 am
Hi. I read a few of your other posts and wanted to know if you would be interested in exchanging blogroll links?
October 7th, 2008 at 3:32 pm
[...] presents How ethical is the pending Wall Street bailout? posted at The Business Ethics [...]
October 13th, 2008 at 7:20 pm
I must disagree thoroughly with your statement that “There’s no doubt that something needs to be done.”.
There is plenty of doubt amongst those of us who do not believe everything the government states on face value. There is no worse action than one that is rushed and pushed through on a whim. Dr. Ron Paul said it best when he stated that inaction by congress would have led us to the same point, where people lose jobs, banks fail, but we would not have wasted $800 billion in the process.
Action is not always justified purely because “something must be done”. Action is only justified when we know what we’re doing and why we’re doing it. Our government and our people need to realize soon that throwing money at a problem is not a guarantee of fixing it.
In fact, every single issue that brought us to this credit crisis is still in full effect and not one dollar from the bailout has gone towards addressing the true problems with the economy, mainly that we are consumption based with rampant corporatism running our economic and political systems into the ground.