Tuesday, December 16, 2008

It's a Wonderful Bailout

This has nothing to do with the ongoing discussion, but I just saw “It’s a Wonderful Life” on television and, even though I’ve seen it about 50 times, it took on a whole new meaning for me in light of recent events.

The movie really gets going when the financial people start making questionable loans to noncredit-worthy people:
You see, if you shoot pool with some employee here, you can come and borrow money. What does that get us? A discontented, lazy rabble instead of a thrifty, working class. And all because a few starry-eyed dreamers like Peter Bailey stir them up and fill their heads with a lot of impossible ideas.
Nevertheless, some people, like today’s ACORN and the people behind the Community Reinvestment Act, defend the practice:
What’d you say just a minute ago? ... They had to wait and save their money before they even ought to think of a decent home?
Wait! Wait for what? Until their children grow up and leave them? Until they’re so old and broken-down that they.... Do you know how long it takes a working man to save five thousand dollars? Just remember this, Mr. Potter, that this rabble you’re talking about...they do most of the working and paying and living and dying in this community. Well, is it too much to have them work and pay and live and die in a couple of decent rooms and a bath?
Sure enough, the bubble bursts and the money dries up:
Where’s that money, you silly stupid old fool? Where’s that money? Do you realize what this means? It means bankruptcy and scandal and prison. That’s what it means. One of us is going to jail – well, it’s not gonna be me.
And, just like the conservative Republicans in Congress, some refused to help this young upstart investment banker:
You used to be so cocky! You were going to go out and conquer the world. You once called me a warped, frustrated old man. What are you but a warped frustrated young man? A miserable little clerk crawling in here on your hands and knees and begging for help. … Why don’t you go to the riff-raff you love so much – ask them to let you have eight thousand?
Like today, things looked pretty bleak:
No securities, no stocks, no bonds. Nothin’ but a miserable little $500 equity in a life insurance policy. You’re worth more dead than alive.
But, at the darkest hour, when everything seems lost, in a heartwarming conclusion which must have inspired Treasury Secretary Henry Paulson’s plea to Congress for the $700 billion, the wife of the young financier steps in and collects enough from the public to prevent financial ruin:
Mary did it, George! Mary did it! She told some people you were in trouble and then, they scattered all over town collecting money. They didn’t ask any questions – just said: “If George is in trouble, count me in...”
This was pretty much the same way the more recent bailout was handled, and it brought the same tears to our eyes. Of course, like our own bailout, given the existing hefty federal deficit, most of the funds ultimately came from overseas investors:
I just got this. It’s from London: “Mr. Gower cabled you need cash. Stop. My office instructed to advance you up to twenty-five thousand dollars. Stop. Hee-haw and Merry Christmas. Sam Wainwright.”

* * *

$ 700 billion buys a lot of angel wings, and there must have been an orchestra of bells ringing last fall. And soon, the the bells will be ringing again when the guardian angels for auto industry executives get their wings.


uncle steve said...

I think that this is the best quote from the movie that reflects the times....
Hey look, mister, we serve hard drinks in here for men who want to get drunk fast and we don't need any characters around to give the joint atmosphere. Is that clear or do I have to slip you my lip for a convincer?

uncle steve said...

the most relevant quote from the movie is:

"Hey look, mister, we serve hard drinks in here for men who want to get drunk fast and we don't need any characters around to give the joint atmosphere. Is that clear or do I have to slip you my lip for a convincer?"

James R Harvey said...

Myk, that is a classic!

Big Myk said...

I know that it's bad form to comment on your own blog, but it turns out that I was not the only one thinking about how "It's a Wonderful Life" serves as a penetrating statement on our current economic crisis. Adam Gopnik, contributor to The New Yorker, analysizes the conflicting perspectives of Mr. Potter and George Bailey, and calls Bailey a "Capraesque Keynesian through and through." See Breathers