Friday, March 5, 2010
A Crisis of Commonsense
One cannot help but being bemused by the numerous items in conventional discourse regarding what the federal goverment should (or should not) be doing to propel the economy back to a bullish state. This confusion derives in part from the cavorting game-play of two headed beast we usually refer to as the Democratic and Republican Parties,in part from the equivocations of the Executive Branch and, completing the triumvirate, the expectations and (yes!) hopes of the public at large. It is an unholy convocation abundant in recalcitrance, rife with division and replete with unwieldy suppositions. In such inclement conditions, politicians seek out the usual anondynes and busy themselves in a flurry of bill proposals to fix what ails, that which may curry favor and insure reelection; the President and his clerics launch raucously into the gray water depths of policy, attempting to reconstitute the mantle of change which gave rise to his assumption of the regal purple of seal of office. And the public fractures into splinter groups, each staking claim that they represent the true interest of the American people. It is all a colossal spin, chocked to the gills with regret, recrimination and despair.
Lost in the helter-skelter are the simple facts of how this situation came to be and what needs are immediate. We consign ourselves to complexity, neglecting what we learned in mathematics as wee tots: all large fractions are reducible to their constituent elements.
Divorcing and divesting the emotional and psychological angst which understandably plagues the current conditions, we can stand on the precipice and see what is necessary.
First, if a free market is desired, the banks and financial institutions should have been allowed to fail. Period. No crocodile tears of remorse should have moved the iron manacles of government regulators. After all, if theory is correct, other more capable institutions would have come into being and subssumed these bastardized organizations; and all would be right with the world. Correct?
Now if we accept that there is no pure free market and these crises are cyclical - especially when commingling and cosiness between interested parties is not rebuffed by federal regulators - the government should recall its accountability is to the citizens primarily and act accordingly. Distribute money to those directly in need and still hold them responsible if in their decisions they have aided in the creation of these affairs. Did the banks engender this all by themselves? No, of course not. In fact mortgage brokers bear more than a little of the onus and the citizenry by burying their heads in the sand and borrowing on assets they did not possess were in collusion as well. Consequently, all must sacrifice.
Likewise remedies must be smart and proportionate. Neither the President nor the Congress can create jobs. The hue and cry for tax cuts to enable and encourage companies to hire more workers from the evergrowing till of the unemployed serves only large corporations. The majority of Americans are employed by small and medium businesses. What is requisite for them now is access to capital, and with banks not lending rigorously the lifeline for them is at a trickle. Foreclosures yet loom, and a legion of Americans are next in line to be thrust on the street. Why not legislate with a bit of thought and force banks to renegotiate loan terms based on current market value? It saves the banks the cost of foreclosure and retains for a tremulous public their residences without forgiving them their culpability. This should be the hour of clarity and commonsense or it will be a millenium of bitter sorrow.