Over the next couple of weeks or so I'll be offering commentary on recent economic events, in particular the Treasury plan to temporarily (let's hope) nationalize large swaths of the finance industry. (Or, I should say, even larger swaths than it already has over the past few decades.)
For those who like to read the last page of a mystery novel first, I'll say this much now: I think the whole thing is probably necessary insanity. Insane, because it adds more government intrusion when that was the fundamental cause of the problem in the first place. Necessary, because when governments intrude in a mixed economy they always find it necessary to intrude more to fix the mess they created. And, this time, they created a whopper.
One caveat lector: I'm not a financial expert. (Though, I did work in the Bond Analysis subsidiary of the 7th largest U.S. bank for two years, before and just after the huge Wall Street crash of October, '87, so I'm only a semi-ignoramus. And, honest injun, I had nothing to do with causing that.)
Still, I know avoidable foolishness when I see it, and this instance is writ so large that anyone who doesn't see it, doesn't want to. Like, say, a few thousand politicians and pundits I could name from the past 20 (ok, really 100) years.
In particular, I'll be analyzing the statements made by five major figures in the drama: Sen. Obama, Sen. McCain, Pres. Bush, and Sec. Paulson, and The Mystery Guest. As a hint of what's to come, these are listed in degree of increasing guilt from zero to mucho. (How about that? For once, Barack Obama is not the biggest fool in the bunch.) Along the way, I'll talk about some of the history leading up 'the Crisis', then end with some suggestions for the future.
No doubt, events in the coming days will overtake the initial statements made by these four named. But each provides important clues about what is likely to come, to the extent they get their way. Beyond that, each represents a variant on the philosophy that got us where we are today. Understanding that philosophy, after all, is the most important lesson to learn — if we are to have any hope of a future better than the past.
Yes, what is most important are the ideas driving these events, not these somewhat inconsequential and storm-tossed reactors to them. But every good story features characters, not disembodied events or themes. More germane, it is people who chose which ideas to act on. So I'll examine the events, at least in part, through the statements of these cardboard cutouts that pass for rational human beings.
We'll end by reaffirming what we know at the beginning: that all of this could have been avoided by a smidgen of foresight and a dollop of courage, i.e. a speck of wisdom. Sadly, those attributes have been in short supply in the leaders in Washington for decades, if not generations.