So what should we do then? Reward every single private entity that makes bad investment choices with a bailout? What about the rest of us who made more responsible investment choices? Why are we on the hook for those who did not do that?
How was Bear Stearns rewarded? Or Countrywide? Or New Century Finance?
Why are we on the hook for those who did not do that?
How are you on the hook?
How were they rewarded? Bear Stearns as a company will soon be gone, the shareholders got pennies on the dollar for their stock, and many of the employees will lose their jobs. That is not a reward. That’s a company that made bad decisions ceasing to exist.
Bear Stearns was not bailed out; the financial system was.
No, but the the major players have become quasi-governmental entities - allowing Bear Stearns to fail would have killed too many innocent bystanders. Yes, to an extent they have been indemnified against the consequences of their poor decisions - but not indemnifying them would have done to much damage to the US financial system.
It's like the fire department putting out the fire in an apartment unit containing a meth lab to save the rest of the building - you can argue that the fire department should have minded their own business because the meth cook deserved to have all of his stuff burn up, but that's cold comfort to the other residents. ;)