“It’s a fact: people respond to incentives and disincentives. We work because we get paid, or don’t speed because we fear a ticket. People will act either responsibly or irresponsibly depending on the consequences. Obama’s bailout plans remove negative consequences to bad decisions.”

1. It is, to a certain degree, self-referential that people respond to incentives. The problem is that we don't have very good models of what incentives people are perceiving or how they respond to them. Even John Cochrane doesn't know what's happening here – he refers to investors “pathologically” sitting on cash right now. (http://faculty.chicagobooth.edu/john.cochrane/r…)
2. It is a *value judgment*, not a scientific pronouncement, to say that people act responsibly or irresponsibly depending on the consequences, because you have to define what constitutes responsible. For example, portfolio managers who operate ERISA pension plans are *required* to invest for the sole benefit of plan participants. While avoiding investment in, for example “sin” stocks like tobacco or alcohol might appear to be “responsible” from one perspective, it is “irresponsible” from another.
3. Actions that appear individually responsible may be irresponsible in the aggregate. It might be responsible for each fisherman to catch as many fish as possible to best feed their family, but if everyone does this, fish stocks may be irreparably damaged so that everyone starves.

Thank you Green……….that was priceless.

I think the sheer magnitude of this actions has caught them so off guard that we are all fumbling around in shock. Many of us wanted to believe that the claim that he was going to govern in a centrist manner might actually be true. That he was really not a far left liberal etc….etc….etc.

The real debate should not be about socialism or Captialism. It should not be about those hurting or those in financial distress.

It should be about how the hell are we going to pay for this?? Its never more clear to me now why Clinton has been in China and what she is trying to do. The Furor over Tibet that the left was furious about should now be forgotten so that Obama can get the money to spend like a wild drunken sailor.

This is the debate. It will be narrowed down once the Right recovers from their bewildering shock over this budget.

http://www.youtube.com/watch?v=7PnfpefgI5c
http://en.wikipedia.org/wiki/Floyd_Brown

However they did not mention that these were Republican ideas…. The rest of the article attacks Obama…. so the authors' appear to be using the pre-Obama bailouts as examples of what Obama has done that is wrong. The whole purpose of their piece is to attack Obama. They should not bring in plans that they disagree with that are pre-Obama and were proposed and backed by Republicans.

Before I go further, a long aside. My bonafides on this issue include: I worked and scholarshipped my way through an advanced degree without incurring a penny of debt. I chose a somewhat low paying career that is more buffered from economic whims than most. I saved a sizable down-payment and then shopped carefully for and purchased a home that cost much less than what the mortgagers encouraged me to borrow, took a fixed rate mortgage for a much shorter term than usual, paid dear points for an even lower interest rate, and pay additional principal at every opportunity. I refused to engage in the flip-fever that seemed to possess most of my friends. I carry no credit card debt. I saved for retirement aggressively in a 401K, and for other purposes in a diversified fashion. I regularly wrote to my representatives expressing grave concerns about fiscal and regulatory policies that appeared to have run amok. So, I suspect, most would rank me as one of the economically responsible.

To continue my point: I am, like the Browns, outraged at the myriad forms of economic irresponsibility we are now being asked to underwrite, post hoc. But, that the Browns tellingly comment on the current economic climate with the metaphor of gentle and regular tides, suggests either that they don’t believe the loud economic alarms, or that their ideology blinds them to the vast differences between their middle-school social studies economic platitudes and current reality. Their piece does seem to recognize exigency, so ideology seems more likely.

Do I think some other people were reckless idiots with their economic behavior over the past generation? Of course, I’ve been thinking it for a long time, and I have the bonafides. I looked out at the empty beach from which the tide had receded in a way no one has ever seen before and had a sinking feeling in the pit of my stomach as I saw reckless idiots seeking their treasures where the water was meters deep only a few moments ago. After warning them, after enduring their ridicule for my warnings, I ran to safety. Now, after the tsunami, do I help the victims who did not help themselves or do I smugly turn my back on them? What would the Browns do? Tides and tsunamis.

As a “FOOTNOTE” at the end of a post preceding yours said so well:

” Yesterday I drove 5 hours and listened to several conservative talk radio shows. It’s interesting to hear big talk show radio hosts talk about how people who are unemployed due to the recession are really lazy and just want to sit around and get government help and how they just need to get up and get a job and make something of themselves.

Such statements are usually delivered by people who get fat salaries, generally aren’t thin, in many cases will be impacted by changes in taxes that will tax people in higher brackets — and who found jobs doing radio shows where they demonize another political party, the unemployed, or homeowners for three hours a day and then pick up a big paycheck. Nice work if you can get it. Which most can’t.”

re v

So, conservatives continue to offer up this as an exemplary voice of conservative thought. It is indeed, apparently, what conservatives proudly support. Keep reminding us of what your thought leaders are all about. Congratulations and goodbye to a dying party.