This will be the first time that I will share my thoughts with an audience, potentially larger than just a single person. The name of my blog, "Musings", is an apt description of it's content. So -- here goes --
As I "muse" about the general economic climate, my thoughts are somewhat tainted with anger at the people who pushed unqualified investors into risky mortgages and investments. The "unqualified", like so many sheep, however, willingly entered the exciting world of easy money.
The "pushers" must have been motivated by the abundance of commissions they earned and the investors dazzled by the glowing promise of riches beyond their dreams (and abilities).
Of course, we all watched one of the first of these mega-opportunities (Enron), slide into the garbage dump and most of us thought -- "well that's not me -- I know better than that". Even so, with that earlier disaster still smoldering in the dump, greed flourished and I could read, almost daily, about very young people, gushing happily about frequent and sequential "flipping" of a multitude of homes, as inflation pushed values higher, taking the profit and moving on to the next "flip" opportunity. Of course, the "flipper" had only, the expense of a "sub-prime" interest payment and no principle at risk, other than the expected profit. Oh, how easy it was to end up living in a palatial home their parents never even dreamed of -- and making millions of dollars through inflation. Unfortunately, the infectuous practice of luring buyers into sub-prime deals, dealt out misery to people who only needed a place to live -- and they lost it in the mad shuffle that ensued.
Real estate lenders, investment bankers, investment counselors and purveyors of greed, frantically pushed the accelerate button and rounded up more sheep, eager to make their fortune the easy way. And then it all collapsed (like a well known ponzi scheme of late).
Three things caused this monstrous economic disaster we are in -- the rampant greed of bankers, the rampant greed of naive investors and the absolute failure of elected politicians to require tighter controls, by the U. S. Securities Exchange Commission, over rules of disclosure and qualification of potential investors. That, by the way, is the Commission that was created after the 1929 "Great Depression" to prevent a repeat of that other big stock market crash (1929). Why, in 2001, did politicians Barney Frank and Chris Dodd poo poo President Bush's request to tighten SEC controls?
Now we get to the last gasp of the previous administration and the Secretary Paulsen $700,000,000,000 bail-out package. When I wrote to my two U.S Senators and one Congressman, to suggest a vote against that bail-out, two responded, but voted for the bill and one voted against it but failed to respond. That's representative government. Never mind that no one can tell us where the money went or whether it did any good -- oh well.
More recently, I wrote to President Obama with a plea to "stop the bailout." Proven failures will only fail again. Don't reward the losers -- let 'em disappear. They fail because of their poor management, poor judgement and almost no planning at all. If you give the losers money, it is a given that they will fail anyway and no one will know where the money went.
When an innovative, patriotic American sold a company he built from scratch, to a big U.S. auto maker he was placed on the board of directors as a major stock holder. I thought to myself -- now -- finally, we will see that auto-maker come out of the dark ages. It was not to be. The new board member was ignored by the 'ol boy stuffed suits and told he was not needed or wanted (more or less). Pity is, his voice on the board could have resulted in innovation, efficiency and a fresh thinking.
Remember Lee Iacocca, father of the Ford Mustang. When Lee was Chairman of Chrysler, he acquired a loan from the U.S., saved Chrysler, paid the loan back in less than a year and came out with the world's first Minivan. That demonstrates what a fresh mind can do.
The U.S. has more than two hundred years of welcoming the best and the brightest to our shores with all their talent and their can-do attitude. We have led the world, fed the world and supplied the world through our can-do attitude. Do not reward failure. Let the losers fail now and brush them aside. The next one in line will do a better job.
We now have added two trillion dollars to our debt. That's money we do not have. We will just print some and the value of everything each of us has will decrease by a proportionate share of that two trillion. Inflation is next!
After a fire, you first clear out the debris. Then you build something new. Let's do that.
