Deficiencies In Ethical Reasoning: Bailing Out The Banks

1641 words - 7 pages

The federal bailout of big banking and the automotive industry has set off a cascade of requests to the federal government for funds. The United States school systems are facing over $350 billion budget shortfalls, prompting states to ask for their money from Uncle Sam. (Ramirez, 2009) The pornography industry has even asked for money, a projected $5 billion. Where is the line drawn? Whose was at fault anyway? Was it the American consumer and his need for all things material? Was it the housing bubble that did not seem to have a bursting point? The total tax dollars spent have already amounted to an astounding $9.7 trillion, enough experts say, to pay off 90% of home mortgages.(Pittman & Ivry, 2009) This paper will examine, analyze, and determine the ground rules manifested, which ethical theories apply, and how the many organizations leadership came into play. This paper will also propose a plan that attempts to address ethical shortfalls, as well the method of communication of these standards to help avoid potential repeats of the ethical shortfalls.Last September all radios, news stations and newspapers were reporting the stock markets had continued to tumble in the United States due to bad mortgage investments and the greed on Wall Street. Lending between banks, businesses had become very expensive. Small businesses had difficulty getting loans. Reported by CNN Money, "Banks were hoarding cash rather than loaning it," (Sahadi, 2008). Large investment firms and mortgage giants could no longer survive and were going out of business or merged with other corporations. In order to prevent further economic damage and discourage people from taking all their money and investments out of banks, the government had to intervene. The Asian and European markets were suffering too. President Bush urged congress and the Federal Reserve to intervene and prevent further damage. After two long weeks of debate, in October 2008, President Bush signed into law the federal government would bail out the nation's financial system. "By coming together on this legislation, we have acted boldly to prevent the crisis on Wall Street from becoming a crisis in communities across our country (Sahadi, 2008)." Treasury Secretary Henry Paulson also said the government would work to carry out the plan (Sahadi, 2008). A number of people blamed greedy corporations for the failure of the financial markets; legislators blamed risky investments and mortgages on the banks. Economist said the government had no choice but to act quickly. "These massive tax payer sponsored bailouts are being justified by economists because everyone would hurt if the economy / financial system collapsed (Garibaldi-Frick, 2008)." Wall Street was bailed out with $30 billion from the federal government.The federal bailout plan was initiated to revive organizations from the financial crises they are currently facing. The automotive, banking, adult film and just about every other industry in the nation...

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