When will we solve the economic crisis?

Wednesday, November 26, 2008

I am thoroughly convinced that no one - and I mean no one - has an answer to our current economic woes. We seem to address one faltering portion of the national economy when yet another erupts. I wasn't around during the Great Depression so I have no idea if a comparison is appropriate. I suspect not.

Here's just one of the many aspects that seems bothering to me. A poll out this week - aren't you sick of polls? - suggests that by a wide margin, the American public is less than favorable to the massive bailouts being handed out in Washington. The truth is the American public doesn't understand nor agree with the feds forking over our tax dollars to banks and auto makers and who knows who else. But the feds insist that the alternative would be much worse than the bailouts. And we are left to take them at their word. Problem is, you know where that has taken us in the past.

My question - and it will not be answered - is where do the bailouts end? Name me one industry or sector of our economy who cannot make the case for their importance. And when they see the bailouts being freely given, the line will continue to form. That much is a virtual certainty.

Here's just one tiny possibility. How about the national media? Yes, you heard me right. The television and newspaper industries are in a free-fall of sorts because of declining advertising and increased competition from the Internet. Who's to say that one of the media moguls won't approach the feds for a share of the bailout pie? So could we see the day when the government has an ownership stake in the national media? Some would argue that the feds already control the media. But we're talking about a completely different monster with a bailout.

How about the energy companies? Many large energy suppliers are showing major losses. Are they next in line since electricity in our homes is a pretty important aspect of our lives.

A handful of cities and a couple of states have already floated a trial balloon concerning some bailout money flowing in their direction. Are we to ignore bad practices that have placed these cities and states in financial peril? Do we reward bad business practices like we are about to do with the auto industry?

We're going to bailout homeowners who made bad decisions. Are we going to bailout consumers who made bad decisions on their credit cards?

When the feds shell out trillions of dollars and churn up the printing presses, that dollar you've been saving for college or retirement is worth less. So those who make good decisions and work tirelessly to get ahead will suffer because of the mistakes of others.

And yet all of these drains of our tax dollars are under way or just around the corner.

I still yearn for the day when someone will fully explain the path to this financial disaster. The home mortgage industry fiasco clearly started in the late 1990s and just recently hit the fan. That much is certain. But where did we go wrong and is there anyone to blame? Not that attaching blame will solve the problem but I don't want the same people who engineered this mess to continue to preside over our national policy.

At the absolute core of this problem, I believe, is the fact that the federal government is too big, too bureaucratic and too cumbersome to solve our day-to-day problems. Their solution is to throw good money after bad and history clearly shows that rarely works and often fails.

Under President Jimmy Carter inflation was running upward of 13 percent and unemployment was hitting around 20 percent. We are not near those numbers. But we also learned not one lesson from that experience.

Instead of extending unemployment payments as we are now doing, try creating government jobs for those in need of work. Instead of bailing out the auto makers, try forcing them to rework their failed business model. And instead of looking for the federal government to solve all of our problems, try solving your own problems.

Smaller is sometimes better. And stupid is as stupid does.

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