The fundamental reason for the bailout failure- fairness.

I've got my philosopher brain working at the moment. Bear with me.

You peeps may have read some of my previous love fest posts on the political philosopher John Rawls and his idea of the veil of ignorance. But that is not his only awesome contribution to society. Rawls wrote about Justice as Fairness. Lemme see if I can give you a quick layman's breakdown.

A society operates on the perception of fairness. Justice is the measures we use to ensure fairness. It is not fair that someone can kill someone and profit from it, so we send them to jail. It is not fair that someone should work and not be paid for it, so we abolished slavery. A lot of people like to dismiss the idea of a fair society (see the quote in my sidebar) as something unrealistic, but when the perception of fairness goes away, society struggles.

This country was built on the idea of fairness (imperfect as it was with slavery, etc). The whole "no taxation without representation" is basically a way of saying "it's not fair of you to take my money and not offer me anything in return".

Since Reagan and the deregulation, trickle down madness has infected our country, inequity has been increasing. The rich get richer, the poor get poorer. Work is not worth as much in pay for those at the bottom while it's worth more for those at the top. We should have been screaming in the streets much earlier, but a lot of that screaming has been dampened by the loosening of the credit markets. You don't notice that your paycheck hasn't kept up with inflation when you can still afford to live the same way you always have by using credit cards and housing equity. Or maybe you notice it a little bit, but you've bought into the whole thing about how your real problem is spending money everyday on Starbucks when the reality is that you make less actual money.

So people have been doing what they have always done in this country to try to survive. They bought homes, another crucial part of the fairness idea that this country was based on. You have to remember that England shipped as many people as they could off to the New World because there was a drastic shortage of space back home. There was no land to buy in England, except for the very rich. So coming to America meant that average people could do something extraordinary. They could own land.

And owning land meant they could pass on their wealth to their children. And their children could spend their income improving or expanding their land. And so wealth was built. And to this day, one of the best indicators of a person's future wealth is the wealth of their parents.

So with the loosening of credit, you have a bunch of people who have been shut out of wealth accumulation for generations who see a chance at owning a home, a tangible thing they can use to increase the welfare of themselves and their children, and they take it. Who can blame them. They are doing exactly what they have been told to do since this little idea of a country started.

At the same time, you have a bunch of banksters who see a way to profit off this. And they do. Who can blame them. But rather than take a little profit, they take a lot of profit. So much that those people who bought houses see their mortgage payment climb to unpayable amounts and the value of their homes decrease so that they are upside down in their loans. And then comes the foreclosures.

And then the fed comes along with a bailout plan that won't save a single home from foreclosure, but will save the golden parachutes of the foreclosure racketeers.

And finally, the American people can't take the unfairness anymore and they say "Stop!" We want justice. We want to right the unfair ways inflicted on us by this type of economic system. Justice is the measures we use to restore fairness. That is why the golden parachutes and banking handouts hurts so much for people who can no longer afford both to put both milk and cereal in their shopping cart. It is unfair, that people and companies who have so completely failed at their jobs should be rewarded with trillions of dollars while people who are competent and hard working struggle for the basics.

We, the American people, don't want to see the economy fail on a massive scale. But we would rather see the entire system crumble and have to be rebuilt form scratch rather than participate in something so fundamentally unfair. There's even science to back up how ingrained the idea of fairness is to us.