For the past four days (and months before), I have said to many friends that the issues that would dominate this years election would be the economy – and at times, I considered some alternatives to who would be my choice for President this coming election. In the beginning – I was not sure on all – I was looking at more economic wonks like Mitt Romney (okay, so he’s a Repug – I still looked at him and his suggestions), and Mike Bloomberg (yes, Mayor Mike who had breakfast with Obama at a NY deli a while back) and began to feel more confident about Obama – not because of his strong economic background, but because he seemed to b another learned man who could effectively think and lead us through the crisis that we were heading toward.
And now, four days since the start of this financial crisis, I am holding out hope for Obama and the future of our country. I am tired of the failed economic and energy policies that has been put in place the past seven years.
I still remember the anger I felt when I read about those private meetings in the VP’s office on a n energy policy that was drafted by beneficiaries of the oil company largess (e.g. Ken Lay).
I still remember the utter frustration I felt when I watched our great country convince itself to prepare for war in a country that could not have attacked us – and let the antagonist of our financial stresses get away in Afghanistan – just so we could capture him at an appropriately “good” time.
I still remember talking with friends of mine in London warning me to get out of the stocks and anything dealing with real estate since the US had been acting more like a third-world nation with its financial structure – and that if we had a name like Argentina, we would have our Moodys rating drop to “junk” status.
And I still remember the dream of being the most powerful nation in the world, a “hyperppower” in the New American Century as the Repug neoCons called it. It called for military projection into other areas, and little focus on our countries infrastructure and strength beyond our soldiers for fodder in the grand powerplays.
I fear our coming Masters
With the financial situation we are in, we have just bailed out (in the past five months) another $1T out of the pockets of ourselves and borrowed from the Chinese and Russians. If you thought the 80s were bad with the Japanese purchasing property and companies across our great land, you have not seen anything yet.
The Chinese have no need to build a military force (even though the have a very large one) – they simply will make demands on our government to provide collateral on the TRILLIONS of dollars we owe them. As with any lender, they always ask for collateral. And, when you are out of credit – what usually gets provided? Land.
Yes, consider that the government owns the land that we live on – and the idea behind the formation of a government was to secure the ownership and the rules of the land we live on – as a society. And as the government has to provide collateral to its lenders, we have essentially given them the keys to the kingdom.
I am weaping because I do not think we know what is going to happen next. And, in a recent Time article, I read what struck me as the fundamental issue of this campaign. This is the call to action – none of this Sarah Palin crap, none of this “seven houses” crap – this is what matters.
Where Do We Go from Here?
There’s no question that the crisis has gone so deep that it cannot be halted by one stroke. Banks and other financial companies around the globe are struggling to pull themselves out of this mess. Rebuilding will take time, vast amounts of money and constant attention. Sooner or later, the hundreds of billions (or trillions) of dollars that the Fed and other central bankers are throwing into the markets will stabilize things. Sooner or later, housing prices will stop falling because no financial trend continues forever.
Given that this is a political year and change is the buzzword, how do Barack Obama and John McCain intend to see us out of this mess? Good question. We don’t know, and it’s not at all clear that they’ve thought about it in greater than sound-bite depth.
Obama has called for increased regulation, which seems like a no-brainer, but he hasn’t articulated many specifics. Meanwhile, McCain has talked about ending “wild speculation” and railed against Wall Street greed. Well, duh. Know anyone who is in favor of naked greed? Whoever wins will face a massive job of righting the financial ship and restoring confidence that has been badly shaken. The next President will have to cast away partisan predispositions and add the just-right measure of regulation and oversight to the mix. As Treasury Secretary (and former Goldman Sachs chief executive) Paulson recently said, “Raw capitalism is dead.”
Whatever the politicians do, we as a society are going to be poorer than we were. We’ve lost credibility with foreigners; they will be less likely than before to lend us endless amounts of cheap money. Will that ultimately lead to higher borrowing costs? It’s hard to see how it won’t.
Coping in this new world will require adjustments by millions of Americans. We all will have to start living within our means — or preferably below them. If you don’t overborrow or overspend, you’re far less vulnerable to whatever problems the financial system may have. And remember one other thing: the four most dangerous words in the world for your financial health are “This time, it’s different.” It’s never different. It’s always the same, but with bigger numbers.
Please. Go out and vote. And ask the questions. Get informed.