The road to penury

Bailouts for bad investments aren’t just morally wrong,
they won’t work either.

One day a bookmaker sees a gambler at the track.

“Hey, you look down,” said the bookmaker to the gambler, “why so sad?”

“Man,” said the gambler to the bookmaker, “you wouldn’t believe the luck I’m having. I had some great tips you know, all dead-certs, real solid runners. But they all came up short man. I’m cleaned out.”

“I sure hate to see you this way friend,” said the bookmaker to the gambler. “Tell you what. Any bet you make with me at say, 5-1 or less, if you lose I’ll give you your money back. Now, how does that sound?”

“Wow, hey, that’s really good of you man!” said the gambler to the bookmaker. “That’ll really help me sort myself out!”

So the gambler returned to the track the next day, and the day after that, and the day after that. Each day he took every 5-1 or less bet he could find, and every time he lost, the bookmaker was true to his word and refunded his money.  And every time the bookmaker saw the gambler, the gambler looked happy, and even though he was losing money himself, this made the bookmaker happy too.

But one day the bookmaker saw the gambler was sad again.

“Hey, you look down again,” said the bookmaker to the gambler, “what happened?”

“Man,” said the gambler to the bookmaker, “you wouldn’t believe the luck I’m having. I had some awesome chances man, great tips and great odds. I had a really good feeling about them. Can’t believe they all came up short man. I’m cleaned out.”

“That’s too bad friend,” said the bookmaker to the gambler. “How about this, let’s say any bet you make with me at say, 10-1 or less, if you lose I’ll give you your money back. Now, how does that sound?”

“Wow, hey, I can’t believe how good you’ve been to me man, thanks for that!” said the gambler to the bookmaker. “Everything’s going to be great from now on, I’m sure this time!”

So the gambler returned to the track the next day, and the day after that, and the day after that. Each day he took every 10-1 or less bet he could find, and every time he lost, the bookmaker was true to his word and refunded his money. And every time the bookmaker saw the gambler, the gambler looked happy, and even though he was nearly broke himself now, this made the bookmaker happy too.

Until one day the bookmaker saw the gambler was sad again.

“Hey, you look down again,” said the bookmaker to the gambler, “what gives?”

“Man,” said the gambler to the bookmaker, “you wouldn’t believe the luck I’m having. A trainer in the bar told me that three-legged carthorse just couldn’t lose! And I had a really, really good feeling about that blind donkey in the four-fifteen. I had some really, really good chances man, but they all came up short. I’m cleaned out.”

This made the bookmaker very sad indeed for he could not afford to help the gambler any more. He had really meant to do the right thing for the gambler by making good his losses. But now he saw that he’d just made the gambler take more risks with more money. And now both the bookmaker and the gambler were broke.

And the bookmaker could see this was now his fault too. And that made the bookmaker very, very sad indeed.