I’ve said it a few times on this blog and have mentioned specifically in the “Words to Live by” posts, the financial system and the current economic crisis that we find ourselves in is the work of a variety of factors, not the least of which was the inefficient manner in which regulators and big government operated. That is not to say that I believe we would’ve benefited from more government involvement, but rather that the “accountability standards” (my term) that the markets operated by were not enforced stringently enough.
I’ve spent the day perusing a variety of finance, economic, and business related websites, as well as continuing to read
- The Bubble that Broke the World
. It has become clear to me that even now some 8-12 months since the beginning of the financial crisis, nobody has a true grasp on the issues at hand. Finance is only representative of a fraction of the problem in the United States, it is the proverbial tip of the ice berg. As is evidenced in this letter from an AIG financial products employee, the company operated much like a ship without a captain. While deals were made, they were made in line with the protocol these men and women were accustomed to. The same can be said for the failing auto companies in Detroit. These companies operated in the atmosphere provided them by the U.S. government. Had the U.S. government installed legitimate programs to try and ween ourselves off of fossil fuels or at least fallen in line with the Kyoto Protocols, perhaps the Big-3 would have made a concerted effort to focus on gas/mileage and hybrid vehicles earlier.
Clearly the issues in Detroit surpass simple questions of competitiveness (the United Auto Workers’ Union comes to mind), but even the UAW’s increased power comes back to the government’s ineptitude. Representatives and Senators operate on an election-to-election basis, making promises that they will in all honesty have a hard time keeping. That being said, they must pander to the little man, to the “Forgotten Man” mentioned in the last “Words to Live By.”
I guess what I’m generally trying to say is that the major issue lies with the U.S. government. The inconsistencies in their approach to dealing with the economic crisis has been nothing short of despicable. The shift from Bush to Obama should have been made with some sort of emergency economic council to ensure a steady transfer in policy making.
The fact that the IMF is even considering involvement in the U.S. is reason enough for the government to reevaluate its role and realize that any remaining political capital the Obama administration has cannot be wasted in name-calling and witch-hunts (or bonus-hunts) and needs to be focused on re-opening credit markets in a manner other than providing liquidity. The government needs to focus on
restoring confidence and that will take a restructuring of financial debt as well as a break up of the leadership of the financial oligarchy.
Keep your head up.