Yet what rational person, going below decks on a submarine, would not note the location of the escape hatch? Certainly no one with an MBA: any first-year finance book will teach you about "the right to abandon"--you value it as a "put option," just like any other financial resource.
Okay, I know, I know--this sounds wrong, somehow. Surely there are larger principles involved.
Indeed I think there are: I think the question implies an issuue that runs through the whole fabric of society--call it "the problem of loyalty." The great Oliver Wendell Holmes, Jr., said that there is no obligation to keep a promise; we are obliged only either to keep the promise or to pay damages. I admit I found that rather unsettling when I first encountered it in law school, and it may go a long way to explain why Holmes is always thought of as something of a radical for his time.
I grant there must be some things that are purely matters of calculation. If I'm driving to work and hear that there is a traffic tie-up on Mangrove Avenue, I don't think anybody would think less of me for ducking over to the Esplanade. Yet what if I said: "Dear, I promise to love, honor and cherish until a better option comes along"--? Granted that quite a good many people do just exactly that, still we want them to pretend that they are doing otherwise, even if they are pretending only to themselves.
A particularly dicey case is taxes. I knew a man in my father's generation who said that in matters of taxation, he always tried to err on the side of overpayment because he was so grateful for the opportunity to live in a civilized society. Is there anyone who takes that view of their tax obligations today? Anyone? Anyone?
And perhaps the most pointed obligation is military service. We've all seen people who were happy to take the king's shilling in time of peace, but who go clawing for the door now that there is a risk of getting shot at. I know exactly one person--she was an Army nurse--who got out after Gulf One because she didn't want to go another war and figured it wasn't fair to stay in good times unless she was willing to stick around in bad. I suppose some people would regard her conduct as admirable: I suspect a good many others would write it off as sentimental claptrap.
Where was I? Oh yes--bankruptcy. And the quote of the day, from Paul Kedrosky (link):
I get irritated at the line of argument that says the world was a better place when consumers let burdensome loans wreck their families, and drive them personally into the ground like over-sized tent pegs. Enough.
Yes, people used to be much more nervous about defaulting. But so what? If a loan no longer meets your requirements, or if it's crushing you financially, or if your circumstances have changed, there is no need to go leaping off bridges about it. The world has changed and the consequences of loan defaults & loan renegotiations are no longer need be as dire as they once were. People who pretend otherwise are selling something -- usually an over-rosy picture of an imaginary past.
It's about time individuals caught up with countries and companies. Both have always had more flexibility with respect to loan defaults/renegotiation than individuals have.
Kedrovsky goes on to say: "I'm not suggesting that loan commitments should be as fickle as, say, high school relationships ..." Excuse me, but isn't he saying exactly that? Or if not, can he think of one good reason why he should not? Can he points to any principle that tells me value bankruptcy as a put option, the Tax Code as a personal challenge, and the marriage contract as a promise to love honor and hang around till something better shows up?
No comments:
Post a Comment