"It's too easy to think that the market will take care of everything," said Leon Panetta, director of the Panetta Institute for Public Policy at Cal State Monterey Bay and former Clinton White House chief of staff. "That's how we've gotten into the crisis we face today."
Still, there is something inherently unfair about the nation's roughly 138 million taxpayers having to foot the bill for an industry's recklessness. No one told these guys to invest billions in ill-conceived mortgages, and they did so for no better purpose than to make themselves richer.
Similarly, no one told thousands of home buyers to take out mortgages they had no hope of repaying. Why should the rest of us have to subsidize a rewriting of their terms so these knuckleheads can keep their homes?
I know: The answer is that sometimes the greater good is served by sucking it up and doing what's best for society. And in this case, there's a strong case to be made that society benefits over the long run by helping Wall Street and distressed homeowners get back on their fiscal feet.
That's not how Fed Up USA sees it, though. The group's website ( www.fedupusa.org) says taxpayers "have been subjected to the biggest con job ever in this country."
Fed Up USA grew out of a financial blog called The Market Ticker (market-ticker.denninger.net), run by financial pundit Karl Denninger, who previously headed Chicago Internet service provider MCSNet. The blog hosts an online forum that claims 4,500 registered users.
"The solution that Ben Bernanke and Henry Paulson have put forward is to flood the market with money," Denninger told me. "That's like giving a drunk a bottle of whiskey for what ails him."
I can certainly sympathize with the frustration Denninger and others in the let-'em-fail crowd are feeling.
But I also heed the words of the late Nobel Prize-winning economist Milton Friedman, who asserted that the Great Depression wasn't caused by the stock market crash of 1929. Rather, he said, it resulted from the government not doing enough to provide liquidity for financial markets, depriving banks of the cash they needed to conduct business.
Bernanke has said he agrees with that assessment, and that's precisely what he's trying to avoid this time. I'm no economist, but I suspect he's right.
I do have one small suggestion, though. The White House and Congress were dickering Tuesday over whether the government should receive an equity stake in firms that receive bailout funds. It should.
But since this is our money at work -- about $5,000 per taxpayer -- we should benefit directly from any rescue of the financial system. Some sort of mutual fund should be created to invest in troubled companies, and every taxpayer should get a share of the fund.
President Bush has spoken of the virtues of an "ownership society." Fine. Wall Street can have my money. In return, I want my piece of the rock, crumbling though it may be.
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Consumer Confidential runs Wednesdays and Sundays. Send your tips or feedback to david.lazarus@latimes.com.
