I am frustrated at the stupidity and hubris that have led to this. But I also have empathy for the difficult choices that must now be made. The same elected officials that were clueless as the problems developed are still clueless about how best to help resolve them. But they do have to try; it comes with the job. The Paulson bail-out proposal is disturbing on many levels but mostly because of its rush, rush, jump don’t look approach. Unfettered discretion by the Treasury, blank cheques and a lack of accountability are not giving thoughtful viewers any comfort. Bush, Paulson and possibly Bernanke are all on their way out, but their legacy and policies will be with the world for much longer.
I have said all along, that the bulk of the cost to clean up this mess must lie with the financial institutions that sold us the
Yes we should allow them a time capsule to put the bad debt into so that they can write it off gradually over time. Yes, we need them to repent and reformulate themselves and they do need to survive in order to do that. But they should not get a trillion bucks from the public to fund their rehab.
Some wise voices that I respect, and who have been sounding the alarm on this crisis for years now, also have some ideas about how to move forward from here.
One of them is Robert Shiller who has a new book just released called Subprime Solution. Watch his recent video interview with the Wall Street Journal. Like me, Shiller does not support the Paulson plan, because it is too vague, and ill conceived, designed by the same principles of spend now worry later, that brought us this debacle in the first place.
This morning world markets are falling again as Talks on the Bailout broke down last night. When there finally is an announcement of a plan in the days or weeks ahead, the markets will no doubt have another big green day. But none of this emotional behaviour should distract us from the central point. The world is in its worst financial crisis in many decades and no policy can repair any of this over night. There is no quick-fix-extreme-make-over solution to our present problems. Only time, discipline and hard work will get the world economy back in healthy growth mode. Level-heads, intelligence, wisdom and realism are required.
When the US Presidential race wound down to McCain and Obama I was pretty neutral as to which man would be the better leader for the next four years. Whoever gets the job will have an incredibly tough road to travel. But recent days have caused me to lose all faith in McCain. First of all he selected Sarah Pailin as his VP. I was excited to think they had found a suitable female candidate to run for this office. But then they had to un-plug her tele-prompter and it was clear that sadly Sarah Palin is not the person we need for this important job. Vacuous comes to mind. Now more than ever, it must be substance over form, and real, independent thinkers are required. McCain himself is also clearly not the leader needed. In the past few days he seems to have transformed on camera from a potential leader into a tired old man that clearly has no idea what a mess his country is in, nor how in the world it got there. He admits he knows nothing about economics. He and others like him need to step out of the way then. We cannot afford more blind ignorance.
Some of my readers have been emailing me ideas on what should be done now. Please feel free to share your thoughts and comments here.
