During the 2009 banking crisis, I had a conversation with a prosperous real estate man. He wasn’t the least bit fazed by all the individuals losing their homes because they could no longer afford the monthly mortgage payments. He said it was a good lesson for these people who will now make better decisions regarding their future home purchases. When I pointed out that banks should learn this same difficult lesson so they too will learn their lesson about risky behavior. He was quiet for a moment as he absorbed my point.

Once he got his footing, he argued that this was different. The collapse of banks could lead to a much bigger collapse of the whole economic system, devastating everyone. The country can’t takes such a terrible risk because we don’t know where an economic collapse would take us. Of course, he is right. However, he also adamant that the ordinary person still needed to learn the lessons of the free market even if the too big to fail companies are spared this lesson. He understood the unfairness of it all, understood that it wasn’t quite the perfect capitalist system he talked about. But we, and I include myself in this, choose to live with this imperfect version of Capitalism because nobody wants an economic catastrophe that might occur if we let the rich go under.

This disconnect from theory and practice for the rich while maintaining the importance of market principles for the poor is a distinctly American position. Almost every other Western Economy offers a greater social safety net for its ordinary citizens while regulating companies too big to fail and taxing the rich who benefit from this protection of their businesses. Americans, on the other hand, protect the rich while letting the poor fall prey to the mercies of the market. So the game is rigged and everybody knows it but can’t admit it because socialism is bad. This misunderstanding of the government safety net is so out of whack with actual reality that I have met people who believe Medicare isn’t socialized medicine when it actually epitomizes how socialized medicine should work. But I can choose my own doctors with Medicare, it isn’t socialized medicine if I can choose my own doctors. I beat my head against the wall.

Instead we continue to push the facade that the market rules, the market decides and nothing is personal. If a person makes good decisions, they prosper. If a person make bad decisions, the person grows poor. Except this isn’t exactly how the system works. The people with a lot of money can make bad decisions and absolutely nothing happens to them because if they do go down the drain they can take the rest of us with them. Too big to fail is not market capitalism. Yet, we cling to this schizophrenic version of a market economy.

Once we see things differently, maybe, we could get the rich to take more responsibility for their protected enterprises. Greater regulation of business and higher taxes seems like a fair trade for this protection and, if you are thinking soberly about the continuation of capitalism, it is the only way to bring an element of fairness back into our version of a market system. It might even save capitalism from its very worst instincts.

Yet, as Robert Reich pointed out, these paragons of pure capitalism, are complaining about any effort to rein them in. They helpfully remind us that regulation and higher taxes are not how a free market works best. Right. Thanks. But if you are talking about how capitalism is supposed to work then, in a free market failing businesses are allowed to fail, aren’t they? Failing businesses would stop handing out bonus checks to their upper management if they knew the government wasn’t going to bail them out because they would need the money to save the business. So when this begins to happen, I will happy to listen to talk about how free markets are supposed to work. Until then you need to explain what concessions you are willing to make for the too big to fail guarantee that the taxpayers are giving your companies and it better be good too.