Barack Obama is only one month into his presidency and he’s facing some serious challenges, primarily the economy. What began as a distant rumble early last year has hit like a tsunami. Banks are failing, millions of people have been laid off, GM and Chrysler are teetering on the edge of bankruptcy, tens of millions of homeowners face foreclosure, and it looks like it’s going to get a lot worse before it gets better.
It’s the kind of economy that most of us have never faced before. We’ve had recessions before, but this is getting awfully close to a depression. According to a February 9 article in The Wall Street Journal, the world’s advanced economies--the United States, Western Europe, and Japan--are already in a depression, says International Monetary Fund Chief Dominique Strauss-Kahn.
Although most of us have never lived through this before, we’ve all heard the stories of the Great Depression from our parents or grandparents. My mother tells stories of wearing flour-sack dresses that her mother sewed, tending a huge garden, canning vegetables, and watching as her mother made extra plates of beans and cornbread to feed the poor folk who showed up on the back porch.
In the face of all of this gloom and doom, it’s tough not to be angry. “How did this happen?” we ask. “How did it happen so fast?” It seems like only yesterday that we were all seeing ridiculous gains in our retirement funds, buying high-definition televisions, planning vacations, remodeling our kitchens, and watching our credit card balances balloon. Why worry? We could always refinance the house.
Who’s to blame? George W. Bush? Bill Clinton? Ronald Reagan? Damn Democrats? Rich Republicans? Litigious lawyers? Blood-sucking banks? Insidious insurance companies? Evil energy companies? Communist Chinese? Ugh!
It’s tough to face this, but the people responsible for this mess aren’t any of the above; it’s you and I. We’re the ones who elected (and re-elected) the politicians, filed frivolous lawsuits, ran up the credit card debt, bought homes we couldn’t afford (and then refinanced them), didn’t save enough of our money, didn’t realize that all that paper money we were earning was too good to be true, bought all those Chinese products, drove the gas-guzzling SUVs, and generally just followed the herd.
“Wait,” you say. “Everyone was doing it. How were we to know?” Well, hindsight is always 20-20. Except that we should have known better. We lost money in the dotcom boom and every other previous boom because we were lustful, gluttonous, greedy, slothful, wrathful, envious, prideful pigs at the trough. Harsh? Yes, but I’m a fat little piggy myself.
Now we have a new president who’s charged with fixing this mess. His first act was to force through an economic stimulus package that, it’s claimed, will create jobs and jump-start the economy. Brilliant. Let’s borrow $800 billion to fix a problem that was caused primarily by excessive borrowing. It was amazing to see politicians clamoring for airtime to blame one another for the “economic downturn” and then race back to Capitol Hill to stuff more pork into the bill.
It’s too early to blame Obama. After all, George W. Bush helped push through the $700 billion Troubled Asset Relief Package (TARP) that was supposed to prop up the ailing banks and get the credit flowing again. I think the only thing that flowed at the banks was the champagne in the executive suites.
Of course there was the equally brilliant automotive bailout of GM and Chrysler, headed by the dynamic duo of Speaker of the House Nancy Pelosi and Senate Majority Leader Harry Reid. Despite howls of protest from the U.S. public, Congress gave the automakers nearly $18 billion. Now the automakers are back asking for another $22 billion ($16.6 billion for GM and $5 billion for Chrysler) just three months later.
Let them fail. Nearly all U.S. airlines have filed for bankruptcy (Southwest and American are notable exceptions). Sure jobs were lost, but the U.S. public can still fly from point A to point B. Some airlines survived and are now in better shape. Some didn’t. The same is true for the automakers. I’m fairly certain GM would survive bankruptcy and emerge as a stronger and better company. Chrysler might not. Ford probably won’t have to. Will cars and trucks still be made in America? Yep.
It’s time for the government to let the market (i.e., the U.S. public) decide what cars they want to buy, where they want to bank, and how they want to invest.
It’s also time for the U.S. public to get the corrupt, career politicians out of Washington and the state houses. Vote them out. Vote in term limits. Wake up, America. Stop following the herd. Start thinking for yourself. Stop waiting for someone else to solve our problems.
I’d like to know what you think about this economic mess we’re in and how it’s affecting you. Post your comments at www.qualitycurmudgeon.com .