I saw a story on CNBC about this couple who had all of their $1.6 million in investments with Bernard Madoff.  They are now penniless and blaming the US government for lack of oversight and pleading for the government to restore their losses.  After all, they claimed, we are not rich people.

Hey wait a minute folks.  Isn’t the first rule of investing to diversify?  And didn’t you violate that rule Mr. and Mrs. cry-in-spilt-milk when you placed all of your money in one place?  And now you want the government, the same government that you always want to get off your back, to come a give you your money back?

And thus the illustration for America’s failed version of capitalism.  Everyone wants a free economy and lots of cheap credit until they are irresponsible and then want help from the government.   In order to keep the public complacent, the government shells out money:

1. to people like my step-son-on-law who enjoyed extended unemployment which has now run out and who turned down jobs because “they were beneath him.”
2. to people who signed mortgage documents without reading them or getting professional help (e.g. an attorney or accountant) to read and explain them (caveat emptor–let the buyer beware–a public warning so old it started in a language that is not longer spoken).
3. to keep auto companies running that pay people $70 in compensation and benefits when long lines of people will willingly take those jobs for $25/hour

And thus we live in the midst of the crumbling of the American economy.  This is our downhill ride to economic ruin, to significantly lower standards of living and a crisis far worse than the one we are in. Why?  Because the politicians and the public want to avoid pain at all costs.  But it’s not possible!

The obese person must have some discomfort when he goes on a diet, to correct his habit of eating to excess.  The drunk person gets a hangover the next day as his body sends a message “don’t drink to excess again.”  But the American public says, “I just want to stay stupid, spend money I don’t have and enjoy the my standard of living which I don’t deserve and I don’t want ANY discomfort” and our government accommodates them. 

The child learns early form a quick burn not to touch the stove top.  This painful lesson keeps him from walking into fires as he grows and the lesson helps him survive.  When people or an economy are not permitted to feel pain, the same errors will be repeated because the lesson does not get learned and they do not survive. 

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