Responsible citizens are getting higher interest rates on their credit cards and loans. Their retirement funds and investment portfolios are evaporating. In the midst of their attempt to deal with this financial upheaval, they are losing their jobs. Future generations will inherit an untold surplus of debt because of our mistakes and yet no clear accounting has been made of all the problems we must fix so as to not repeat those mistakes going forward.
We must learn from our errors. Stimulus packages, tax cuts, interest rate cuts, etc., may help to stave off the immediate crisis, but what we desperately need is a thorough assessment of what went wrong so that, long term, the processes that led us to this economic disaster can be repaired or replaced.
It is easy to confuse the immediate effect for the entirety of the problem. We may say, for instance, that this crisis is the result of irresponsible mortgage lenders, but shouldn’t we also lay blame on the Federal Reserve’s failure to see the creation of economic “bubbles” as a prelude to economic disaster. How does the SEC account for its inability, or unwillingness, to investigate Maddoff despite numerous reports concerning the method and scope of the fraud? Is this not also part of the problem? What about the American car industry’s inability to reform its business practices that has been the running critique of the industry for decades? The inability of Detroit to compete in the global market is almost a cliché by now; why has no one saw fit to turn this industry around? Why has no one fixed the fundamentally broken securitization market or the equally broken corporate governance structure on public companies? When politicians vote on legislation that they do not have the time to read, are they not part of the problem? How about an unregulated $50 Trillion market of credit default swaps? Clearly our economic trouble goes deeper than irresponsible mortgage lenders. We must address the errors in the system itself that have allowed for this lack of oversight.
But if no one seems quite sure as to how to divvy up the responsibility for this crisis, the person who will pay for these mistakes has already been decided: the taxpayer who pays their bills on time. It is time that those responsible for the problems to stop hitting up the upstanding citizen for bailout money and to begin the process of fixing the systems that allowed for these disasters in the first place. Taxpayers need real solutions. We can not just keep asking taxpayers (like yourself) to pay more and more.
In my opinion, change will need to be widespread. We will need changes in campaign financing, the regulation of financial institutions, and the power of the stockholder over those public companies that they own through their investments. But change will not and can not occur until those in power take responsibility for the havoc they have wreaked upon the American financial landscape. That they have not is evidenced by the absence of high profile resignations in the news; those who have failed us remain at their positions.
Let me close by saying that I think we would all be willing to pay more taxes and finance charges, and to work harder if that would mean a better future for America and our children, but in order to see that economic turnaround, we first need to address the cause of the problems. Right now, we are only treating the effects. If our economy were a ship, it would be sinking. Instead of changing course towards dry land for repairs, we’re pushing the engines towards deeper waters. We need to do more than bail out. We need to find the holes and fix it. No matter how controversial some of these issues might be and how uncomfortable they might make some people, they need to be immediately addressed for America to be able to maintain its domestic prosperity and its superiority in the global market.