I find myself today in the very strange position of being on the same side as a majority of congressional Republicans.

This is not something that happens often.  In fact, I don't think it's ever happened.

Today, House republicans (and about 100 democrats as well) voted against a $700 billion bail-out package for large investment banks.  The pundits scream.  The president screams.  The candidates scream.  Everyone says OH NO, IT'S ARMAGEDDON!

But you see...I'm not sure I believe that.

We have some serious problems in this country.  First and foremost, from our largest institutions to our government to our citizens, we are living on credit.  Businesses borrow money to make payroll; they then sell their goods and services to other business on credit, gambling that they'll be able to pay the bill when it comes due.  The payroll is used to pay for cars, electronics, and other things that are purchsed on credit, gambling that they'll be able to pay the bill when it comes due.  

We, as a nation, have made a lifestyle of living beyond our means.  Real wages haven't increased at all to speak of, for the last eight years.  But for a while, the housing market helped to hide this problem.  Property values were so over-inflated, and credit so easily accessible due to deregulation, that people just refinanced their homes repeatedly in order to 'make ends meet'...which, more often than not, meant buying expensive toys or inefficient SUVs, rather than actually meeting basic needs like food and clothing.  

Each of those people, and the banks that made loans to them, and the institutions that made loans to those banks, made a bad bet - that the people taking out the loans would remain financially stable, and if they didn't...well, the government will bail us out.  Federal insurance.

At taxpayer expense.

Leaving aside the questions of exhorbitant executive pay, bone-headed decisions made by greedy investors and executives that valued only short-term big profits on paper without considering long-term financial stability or survivability, we have a serious problem here.

The problem is not on Wall Street.  The problem is on Main Street.  I can drive down my road right now and see homes that sold for $150, $200 thousand dollars to people who are making maybe 40, 50K a year.

Why?

Why does it cost $200K to get a college education that will, if you're lucky, allow you to start earning maybe $60-$75K a year?

We are living beyond our means.  We have so fallen in love with the appearance of material wealth that, in a stunning act of mass self-hynosis, we have allowed ourselves to continue whistling past the graveyard and pretending that the day will never come when it's our name on the tombstone.

This is the real root of the current financial crisis, and all of us are guilty.  Not just the overpaid educated fools who are worth millions on paper and not a tin slug in reality.  Not just the predatory lenders who have set up a system whereby everyone is encouraged to live above their means on credit rather than aspiring to improve their real wealth while sacrificing the X-Box 360 or big-screen TV or 8mpg SUV in the mean time, but also those of us who have allowed ourselves to be suckered in to this system.

There was a time in this country when a business who couldn't make payroll without borrowing couldn't stay in business.

There was a time in this country when a man who wanted to drive a Cadillac had to be able to afford the payments NOW, not two or three or five years from now.

We've lost sight of those things.  The talking heads say it over and over, 'businesses need credit to pay employees.'  But they shouldn't.  Of course credit is necessary.  If GM wants to build a 150 million dollar manufacturing facility in Toledo and they only have $130 million to work with, then they have to borrow $20 million to make up the difference.  That's understandable.  If I have six thousand dollars in the bank and I want to buy an eight thousand dollar car, I get a loan for two grand.  That's understandable.

If GM is $300 million in the hole and they need $150 million to build a new plant, then the plant shouldn't get built.  If I want to buy an eight thousand dollar car and I'm making minimum wage at McDonald's 15 hours a week, then I guess I need to get used to walking.

For me personally, that's a reality I faced the hard way a long time ago.  I think there are many of us at the lower ends of the income scale who have long ago faced this reality.  Unfortunately, Mr. and Mrs. Main Street *haven't* faced this reality.  We consistently spend more than we earn, all in pursuit of the 'american dream' of having the latest style of footwear on our precious children's feet so their self-esteem isn't undermined, all in pursuit of the 'american dream' of having a shinier, faster sports car than the folks next door.

What we need is not a bail-out packagage for investment banks, or one for the American consumer.

What we need is a serious reality check.  If you aren't making $250K a year, you have no business living in a $250K home.  If you are spending more than 25% of your after-tax income on rent or housing payments, you are living beyond your means.

I suspect that this includes about 75% of the current US population.

Where the culpability of large banks and government enters the picture is that they've been playing a shell game with us for a lot of years, because it's profitable financially and/or politically for them to encourage us to continue living beyond our means.  They have sent us to hell on easy credit terms, and we have joyously piled in the back seat of the giant, gas-guzzling, overpriced handbasket, chewing on our $100 per plate sushi and guzzling $5 per cup coffee, wearing our $300 beachwear hoping to get a nice tan while we're there.

But it's not going to stop if all we do is bail these banks out.  It's not even going to stop if we let them fail.  The change - the real change - that needs to take place is within each of us.  Our attitudes.  Our sense of entitlement, that we have the right to the big SUV and low gas prices and a Prada handbag and fine corinthian leather seating.

Nobody wants their kids in cheap clothes. Nobody wants to drive a rustbucket.  Nobody wants to live in a bad neighborhood.  There's nothing wrong with that.  What's wrong is that we've lost sight of the fact that we have to work our way out of those things.  They don't just get handed to you at 13.9%.

The bailout bill is ill-considered and being pushed by the same half-supported, half-understood alarmism that pushed us in to the Iraq war.  It's all hand-wringing and we gotta do something RIGHT NOW, without proper consideration of the consequences.

However, as my friend Stefan so eloquently pointed out:  this time, the danger is real.  Unlike Iraq's WMD's, there really is a catastrophic threat to our way of life on the line.

For that reason, it is more important than perhaps it ever has been that our leaders not be pushed and bullied into passage of a poorly-constructed, poorly-understood bail-out package.

The problem isn't some populist 'well why should I have to bail out those fat cats' nonsense.  The problem is that we have yet to address the root causes of this crisis, nor have we yet made a genuine attempt to ensure that it doesn't happen again.

The problem is that our leaders are not leading.  If they were, it wouldn't just be stern populist speeches about ridiculous rates of executive pay; it would also be stern lectures directed at Main Street about how to live within your means.  

But We The People don't want to hear that crap.  We just want to hear that we can still go out and turn in this year's overpriced lease on a car we can't afford for next year's overpriced lease on a car we can't afford.

And until we adjust our attitudes, this situation is just going to keep happening over, and over, and over again.

Burn your credit cards.  Instead of taking out a $50K loan on an SUV, drive a small used car for a few years and save up the money for that SUV, if you really want it that bad.  If you don't have the confidence in your ability to save up that money, then how can you possibly have the confidence that you'll be able to make the payments?  Make the payments into a bank account until you've got cash in hand.  Refuse to buy anything on credit, including a home unless you have fully one-half of the purchase price of that home in cash.  If that means you have to live in a lower-class neighborhood or rent instead of buy or even shack up with family or friends, then that's what you need to do.  Get over the notion that you have the right to be affluent.  You don't have that right, and far too many of us have been laboring under the delusion that we can do it anyway...on easy credit terms.

Deregulation of the banking industry is unquestionably a major issue, but the major issue that isn't being addressed is that the deregulation simply gave banks the ability to make bad loans to people who know that they shouldn't qualify for the loans in the first place, but take them out anyway because they can.

Fixing only one of these problems...solves nothing.  Bailing out banks only cures the psychological problem of the markets - it does nothing to address the utterly irresponsible actions of each and everyone one of us who are carrying more debt than we ever should have been able to take on in the first place.

When we start living within our means - and pushing government and industry to work with us to improve our means, rather than just expecting what amounts to welfare for those who refuse to live on what they make - then we will have a real solution at hand.