The whole Obama program is contradictory. Each special interest group he pandered to has conflicting goals - and he sold his soul to each of them.
Y'know.. maybe I make it a bit simplistic, but in situations like we're facing now, we must keep one thing in mind...
Economic systems must exist to serve the needs of the people (as a whole), not the other way around.
That doesn't make me a socialist.. nor does it make me a capitalist. It makes me a pragmatist (and hopefully a realist).
One thing I think we're TRULY MISSING here is that high unemployment is only going to exacerbate this recession (depression?).. Without the cashflow from the consumer paying on their loans, there will be defaults, homelessness, and growing destitution, all of which will require taxpayer money being spent to support them.
People spend money because they have jobs. Some will save that money or pay down debt while some will spend it. Others will invest it, either via the markets, or directly into new business enterprises. Jobs, with a certain measure of security, are critical to ANY functioning economy.
And right now we face the decision as to whether the government is the best entity to determine how human labor resources should be allocated, or the private market. And I'm not going to pretend that the answer is either easy, or that I possess it. But if it involves keeping the human capital that is our nation occupied and productive, then we're on the right track.
Maybe I'm rambling a bit, but I have a growing fear that we're in a deflationary spiral, both here and across the globe. People are hunkering down and reassessing where to allocate their resources. Banks have depositor money that they can't lend out because the mechanisms by which we assess value and business risk have fallen apart (distrust of Ratings Agencies being paramount in that problem). So the Treasury has had to issue over a Trillion in debt to provide a place to part that frightened capital.
I can tell you that this financial crisis is not going to end until we're able to rediscover where true risk/reward valuations lie. But it's difficult to understand what to produce if the consumer is uncertain about whether they will have the means to purchase it.
Hawk |
