No Bank Left Behind?

Like everyone else, I have pretty strong feelings about the bank bailout plan that the President is proposing. 

Remember No Child Left Behind?  The legislation that purported to create accountability in schools and ensure that schools that received federal funding met certain criteria? 

We were talking about it last night, and my charming husband (usually the conservative at our house) said "well, it was a good idea."  I interrupted him with "No, it was a TERRIBLE idea. Even the name is terrible!"  

Our capitalist democracy is based on competition. If children get the idea, from their earliest days, that it is somebody else's job to make sure they don't get "left behind," then they get the idea that it requires no effort on their part to succeed.   

At least when I was a kid, I would get away with whatever I could get away with. While my parents were visiting  a friend's house and I was outside with the kids, my Mom would have to call me two or three times to come in now because she was ready to leave. I knew she wasn't going to leave without me.  

On the other hand, on mornings when I had to catch the bus myself and was responsible for getting myself ready for school, I made darn sure I was up and dressed and caught the bus, because the alternative was walking.  Knowing that there would be consequences for my actions influenced my behavior.  

Intervening in the space between action and consequence rarely helps.  

I don't believe the government did much good with No Child Left Behind.  We hear numerous reports of unfunded and cumbersome requirements taking teacher's time out of the classroom in order to compile and file reports and statistics.   There have been reports of teachers teaching children to take standardized tests rather than teaching them useful skills like math and science. A report from the UN Children's Fund says that the U.S. is one of the worst countries for kids, citing falling ratings in education. 

Given the government's stunning success in the field of education, I have no reason to believe that they will do any better in the banking industry. What little I can understand of the crisis is that the trouble stems from bundles of securities that are complex and may ore may not contain mortgages that may or may not have a high risk of default. Now, if the bankers and finance geeks of the world can't figure out what one of these securities should be worth, I doubt that the government will do much better. 

Another editorial in the Salt Lake Tribune says "Public shares the blame in creating Dr. Frankenstein's Wall Street." While many people suffered from fraud at the hands of hucksters (and I sympathize and hope they take the hucksters to court and win!)  Many members of the public made a lot of money from flipping houses in an overpriced market.  That's fine, but it's risky. Sooner or later the musical chairs would stop and somebody would get hurt. 

There are natural laws at work in business, as well as everything else.   The banking crisis is a great example of how, when natural laws are broken, everything goes awry.  The answer is not more intervention, it's being honest, allowing consequences to occur, and not tinkering with the  natural laws that run the economy as well as everything else.