Tuesday, March 10, 2009

Are We There Yet?


Today I am shedding "lyte" on anticipation.  You know how it is on road trip with your kids?  And like every 10 seconds, one of them asks,"Are we there yet?"  You have to stop yourself from reaching back and smacking them repeatedly while yelling, "We'll get there when we get there!  Now shut up and let me drive!"  Right now the media's theme is that the recovery is taking too long.  And I am afraid we as a society will buy into this crap.

President Obama has been office 8 weeks as of today.  That's 56 days for those of you who forgot how to multiply.  And the rumblings are starting.  "Why don't we have a bank bailout plan yet?"  "When is the stimulus going to work?"  "The Dow has dropped like a rock since inauguration, it must be Obama's fault!"  Now if I recall, the Dow dropped like a rock when George W. Bush came into office, courtesy of the dot com bubble bursting, and no one blamed the new president.  Oh no, that was all President Clinton's fault.  

Why are we holding President Obama to such a high standard?  Heck, when 9/11 happened, people said we couldn't hold President Bush accountable since he "just got into office."  So why are we expecting our current president to fix the worst economy since the Great Depression in just a few weeks? 

This economic fix we're in was decades in the making.  It started in the 80's when the "Great Deregulator" (my nickname) Ronald Reagan came into office and systematically began the process of dismantling a lot of oversight and regulation of financial markets.  President Bush and President Clinton helped the process along.  But it really took off under George Bush.  

When you reduce the capital gains tax, allow financial institutions to leverage themselves at 30 to 1, keep interest rates artificially low so there's lots of cheap money available, and expect the market to regulate itself, is it any wonder that our entire financial system implodes?  When you lend money to people with no provable income, no down payment, and low credit scores, to buy homes that are beyond their means, then take those loans, chop them up, rename them "securities", give them AAA bond ratings based on no due diligence, should we be surprised when the whole scheme tanks as these people predictably default on their loans?

But never mind that.  We are addicted to instant gratification and we want our recovery and we want it NOW.  Sorry folks, this going to take awhile.  And not everything is going to work.  This isn't a day trip to the wine country.  More like a cross-country slog to the "whine" country.  And we have more than one driver for this bus.  The President proposes, Congress disposes.  This ride is going to be a long one and it is only going to seem longer if we continue to sigh and ask every mile, "Are we there yet?"  We'll get there when we get there.  So shut up before I reach back there and smack ya'.    

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