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Falling into line with the talk (and source of great taxpayer revulsion) about the government bailing out consumers who financed their homes with high-risk loans, here’s an excellent read in today’s Slate.

Here’s columnist Daniel Gross on the details of the Bear Stearns’ bailout of two large hedge funds it controls when times got rough recently:

The move, intended to spare Bear Stearns embarrassment and protect the reputation of its asset management business, also had a take-one-for-the-team result. It insulated fellow Wall Street firms from losses and prevented widespread damage to similar hedge funds. … [I]t reinforces the notion that the big boys get pampered when their investments go bad.

And, the thing that made times rough was borrowing tons of money to invest in collateralized debt obligations (CDOs) — basically, those packages of securities that hold the itsy-bitsy bits of subprime mortgages.

(Please, read this excellent piece on how the whole thing works from our resident genius, Rich Toscano.)

But here’s the kicker in Gross’ piece today. While these financiers are fancying themselves rescued, they’re not always quite so accommodating of the folks who borrowed the loans they were chopping up to sell via CDO.

And, yet:

Foreclosing on subprime borrowers has the same ruinous impact on homeowners as it has on subprime hedge-fund managers. …

Note the similarities — and the differences — between the neighborhoods in which subprime borrowers live and the financial neighborhood in which subprime lenders operate. Wall Street executives didn’t foreclose on the Bear Stearns hedge fund, which borrowed imprudently, because (1) the fund had a rich parent to bail it out, and (2) doing so would have imposed financial hardships on themselves, on their friends, customers, and neighbors. The residents of neighborhoods targeted by subprime lenders typically receive no such consideration. When you owe the bank $10,000, it’s your problem. When you owe the bank $10 billion, it’s the bank’s problem.

This helps us piece together some of the reasons why this foreclosure problem is so complex.

(That reminds me: If you haven’t seen our newest housing-related Hot Topic, check out this one on Home Finance.)

KELLY BENNETT

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