We can go back and forth debating the merits of various recovery schemes: TALF, TARP, the homeowner mortgage mod scheme, healthcare reform, and so on. But leaving out facts and logic for a moment, there’s a broader reason why we ought to be sceptical of the plans put forth so far: They’re almost all about feeling good, with little actual pain for anyone.
On taxes, we like to imagine that we can pay for all our spending with just a modest tax increase on 2% of the population. The 98% of us who make up the rest get a tax cut!
On matters of equality, we think that we can just cap pay and some arbitrary level and that will create fairness.
On growing the economy, we’re lead to believe that spending more on ourselves — more TVs, more refrigerators, more dinners out at a fancy restaurant — will be good overall. Of course, we’d love to believe that eating out more and buying TVs is a good thing, but deep inside we probably know otherwise.
With the banks we’re supposed to believe that we can keep them going with very little pain, keeping the creditors whole.
Green. Windmills and solar will have a role in our energy future, but much of the green movement is about feel-good stuff, and dare we say, smugness. That’s why when we talk about energy independence, coal and nuclear are villified, even though they would clearly help us achieve that.
Education. Again, we’d like to imagine that everyone is educable if only we threw more money at it. Education makes us feel good. Educated people feel especially good about seeing others get educated.
Homes. Everyone knows that the answer is to let the damage be done and let prices fall to where they may. Problem is, foreclosures make us feel bad. Homeownership makes us feel good, and so even if we know that keeping people in houses they can’t afford without reducing their debt doesn’t really do anything, it feels good that people can keep our houses longer.
Bottom line: So far, everything we’ve done makes people feel good in their minds, but the connection between feeling good and actually solving problems is tenuous. The fact that almost none of the “solutions” involves real, immediate pain for the majority of the people now should make us deeply suspicious of it all.