I thought this was funny and worth sharing. Thanks to my buddy from the Mo-Row and neighbor Dave for passing it along.Oddly enough, I don't have a ton to say about the crisis, so sorry if this is anti-climactic. Though who'm I kidding? It's not like anyone out there was particularly dying to hear my opinion. Besides, my buddy Bitner and his new clan of commentators have had ample to say about the crisis that trumps anything I could add.
I will say this. I'm concerned that the bailout is now being called bigger than the New Deal, when I'm at least mostly convinced that the New Deal had little to do with bringing us out of the Great Depression; World War II did that.
Naively or not, I tend to believe that these things happen and they happen every 10-15 years or so, regardless of what the politicians do. I don't believe that tax policy can affect much more than the margins of the economy. We get a bit of a confusing message, though, because when the economy goes well, whoever initiated the last big tax policy/spending plan claims victory. When it goes south, whoever opposed the plan pulls an "I told you so."
That being said, the best thing we can all do is hang in there. Resist the temptation to look at your portfolio every day to watch it wither and die, and if you've smartly saved a few extra bucks and manage a budget, if anything dump a bit more into it now. It'll bounce back. It always does. Investing in something now will make you part of the solution and you'll become a beneficiary of the relatively low prices out there now.
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I disagree that "these things happen and theyhappen every 1-15 years or so..." If the economy and the sense of value is entirely artificial--i.e. it is the combo of human perception and measurement--then we should be able to artificially create an economy that levels out extreme bull and bear markets. Understandably, even if the net gain in both extreme and steady markets are the same, a balanced perception should make a steady but boring economy--something I think a lot of people long for.
A steady economy would give people time to react to any potential crisis down the road and keep the economy in check. Then with crisis in check, there would be no need for extreme measures that rests upon blind trust of an oligarchy (analogous to how the P.A.T.R.I.O.T. Act got passed, the adaption of domestic spying and torture, the push for war in Iraq).
I'm a big philosophical proponent of balance and that certainly applies to the economy, in my opinion.
Oooh, I'm not going to engage in a full-blown debate of free-market versus controlled-market economies, but I would put out there that I happen to be a believer that our attempts to create a balanced economy through regulation are more a root of the problem than the solution. I'll admit that there's data defending both sides of the equation while still holding firm that evidence disfavoring regulation is more compelling.
Creating incentives that contribute to balance is one thing: mandating that balance through regulation is another thing entirely.
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