by Stephen Kovaka, CPA | October 14, 2009

Neck deep in the Big Muddy, and the big fool said to push on! Pete Seeger
No, I tell you; but unless you repent, you will all likewise perish. Luke 13:3
Repentance means two things: 1) Admit you have been doing wrong, and 2) Start doing right.  It means changing your thinking, your attitude, and your actions.  In the case of someone who has gone on a road trip and gotten lost, this would involve stopping the car, humbly asking for directions, and then heading in a NEW DIRECTION!  I understand that the three most difficult words to pronounce in the English language are "I Was Wrong." And the crux of repentance is openly admitting, to yourself and anyone else concerned, that you have been wrong.  
TOO BIG TO SURVIVE
Our federal government has been using our money (at first), and our credit (now that we are broke) for decades to make good the losses of banks that they deem Too Big To Fail.  These episodes are like Jane Austin novels: each one has its own unique twists, but the plot is always a variation on the same theme.  (See The Creature from Jekyll Island for details.)  The banks make big bets on sure things.  When all goes well, the banks make big bucks, and the top dogs make big bonuses.  Then we hear a lot about free markets and how government should not interfere with successful businesses.  But when things go wrong, we are always told about the dire consequences to us all if any of these banks are allowed to fail.  Therefore, our government will save us from this fate by rescuing the banks from their own greed and folly, at OUR expense.
Now, think about it.  The economy is in shambles, with poor future prospects.  How much worse could it have been if AIG, Goldman Sachs, JP Morgan Chase and General Motors had been allowed to go into bankruptcy (and I mean Chapter 7, Liquidation!)?  Their real assets would not vanish, but would simply end up the hands of different managers.  The imaginary assets (derivative contracts, for example) would vanish in a puff of smoke, as they deserve to do.  The unfulfillable promises would be wiped away.  The people and organizations that created the problems and benefitted from them would be the ones to bear most of the costs, rather than transferring them to the backs of the taxpayers. 
"Free market" means more than allowing large, well connected companies to make as much money as possible.  Free markets also mean that those companies that lose, be allowed to LOSE!  Those investors who bet wrong, be allowed to LOSE.  Let some other, smaller, but wiser companies get their hands on those business assets at a bargain price.  Let the big-shot executives who screwed up be fired and humiliated, maybe even be required to give back some of the loot.  Some of them should be in prison. 
No company should ever be allowed to become Too Big To Fail: America can't afford it.  Far better to have five smaller companies that will compete with each other and be allowed to fail, at no cost to the taxpayers.  But in reality, the whole Too Big To Fail story line is just a scare tactic, used to give cover to politicians when they are dishing out our wealth to favored private businesses.  It is merely a way of distracting our attention from the disaster that IS happening to something so much worse that MIGHT have happened.
COMING CLEAN, FACING REALITY
The nub of the problem is that if this process were allowed to happen, it would mean that thousands of important people would have to eat crow.  Too much is at stake in prestige, influence, position and money.  Politicians would not be re-elected.  Cabinet officers would be fired.  Wealthy people would lose vast amounts of wealth.  Large corporations would cease to exist.  (Remember Arthur Anderson, one of America's Big Six accounting firms, that vanished in a week's time?  Did the world come to an end?  Only for the people involved.)  Maybe even the holy Federal Reserve Bank would be held to account for its actions.  Yes, repentance is like that, because it means a clean break with the failures of the past, for better or for worse, and there is always a price to pay.
But No, the consequences are too far reaching for those in power.  So instead, the word is "Push On".  More debt money, more bailouts, more interventions, more bubbles, more socialism, more lies.  But soon, no amount of denial will suffice to hide the truth.  Government can wreck an economy, but it is incapable of repairing the damage.  The only way out is economic repentance, which means admitting that Keynesian, interventionist economics is a failure.  That debt money is economic poison, and only a means of disguised looting.  That the Federal Reserve Bank has been an unmitigated disaster for most Americans.  That liberty is destroyed when wealth is allowed to accumulate in fewer and fewer hands.  That socialism is a chimera that can only end in disaster, whatever its golden promises.
How much more suffering will Americans have to endure before we come to these conclusions as a nation, and allow real change to take place?  There's no telling, because in our fallen state, we usually need to hit a wall before we can admit that we have a problem.  But before we can start to get out of this hole, we first have to stop digging.  That is repentance.
Copyright © 2009 Stephen Kovaka, CPA Editorial Archive
Stephen Kovaka is a CPA, and Vice President of Finance for an industrial machinery firm in Louisville, KY. Converted to the Christian faith at the age of 31, he worked as a cook, carpenter, gardener and firefighter before getting into the financial and accounting world in 1990.