Focus on the future
Face it, many Americans and American institutions from the Federal
Government, to Wall Street are in debt up to their eyeballs. We have
been on a credit binge unseen before in human history.... We changed
accounting rules in order to support our binge; never a thought of the potential
consequences. We told regulators to look the other way while we partied and shunned Greenspan in 1996 when he asked for reason.
This financial crisis has many fathers, but few sons. Where the economy goes from this point forward has few, limited options. Congress’s focus should be on those potential outcomes.
It is my speculation that all this excessive borrowing grew the economy beyond its natural state, in a less levered world GDP would be smaller, as much as 20 percent smaller. It does not take a PHD from MIT to know that contracting GDP by 20 percent will have a dramatic impact on Main Street, let alone Wall Street. This coming economic contraction (Recession) will not be pleasant but will not be Armageddon either.
The argument that we the people do not understand the economic impact if Congress does not spend $700 billion on toxic securities is nonsense. Explain to the family whose breadwinners lost their jobs, house, prestige and ability to provide for their children that they do not know how bad the economy can get.
A way forward
Let investors enjoy the risk of their rewards and spend the $700 billion on the other side of this crisis. Not knowing what the crisis will bring or how it will change consumer behavior makes spending the cash difficult. Domestic energy production, renewable and non is always a good investment. For instance, why not tap the geothermal gift of Yellowstone. It may demonstrate that we can control the temperature of the caldera by producing cheap electricity. While there maybe no limit to wind, there is a limit to wind power. Solar could be made mandatory as part of new construction in climates with high solar potential.
We have to start thinking about the future of our economy and not the market.
This financial crisis has many fathers, but few sons. Where the economy goes from this point forward has few, limited options. Congress’s focus should be on those potential outcomes.
It is my speculation that all this excessive borrowing grew the economy beyond its natural state, in a less levered world GDP would be smaller, as much as 20 percent smaller. It does not take a PHD from MIT to know that contracting GDP by 20 percent will have a dramatic impact on Main Street, let alone Wall Street. This coming economic contraction (Recession) will not be pleasant but will not be Armageddon either.
The argument that we the people do not understand the economic impact if Congress does not spend $700 billion on toxic securities is nonsense. Explain to the family whose breadwinners lost their jobs, house, prestige and ability to provide for their children that they do not know how bad the economy can get.
A way forward
Let investors enjoy the risk of their rewards and spend the $700 billion on the other side of this crisis. Not knowing what the crisis will bring or how it will change consumer behavior makes spending the cash difficult. Domestic energy production, renewable and non is always a good investment. For instance, why not tap the geothermal gift of Yellowstone. It may demonstrate that we can control the temperature of the caldera by producing cheap electricity. While there maybe no limit to wind, there is a limit to wind power. Solar could be made mandatory as part of new construction in climates with high solar potential.
We have to start thinking about the future of our economy and not the market.
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