Monday, September 29, 2008
Are We Scared Yet??
Wow, I just checked msnbc.com to catch up on the day's news and I see that the government don't-call-it-a-bailout package failed to pass in the House. In typical fashion the stock market has dropped over 700 points today. Why is it taking so long for Washington to do something about this? No solution is going to perfect of course but I believe we need some kind of hope. Is this just a normal financial cycle we are in or is this completely unprecedented? It seems like everything is getting worse and the bad news keeps coming. Is anyone else really getting worried? Or are we going to be rescued in the final minutes??
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There are many who are saying we're headed into a "great depression" but they tend to be truthiness types - they have no economic expertise but they are pundits who feel they can wonk their way through any tough topic and, if lucky, scare people enough so that they’ll pay attention.
My simple observation of the actual Great Depression is that Hoover, who was widely admired when he entered office, squandered his opportunity to lead by giving a lot of pull-yourself-up-by-your-bootstrap speeches. This was what he thought we needed since he felt the market would eventually fix itself. The same thing is true now. The market will self-correct, it’s just a question of how many will suffer and how much? FDR came into office and acted, sometimes successfully and other times not. It seems to me that trying something is a better course that waiting it out. Of course, there are those now who are trying to convince us that Hoover’s do-little approach was the correct choice and that FDR’s actions made the depression great.
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