Hubris

Eli,

How do you fix an economy that's in recession and deeply in debt you ask? I think you are leaving out the part of the question that is troubling our current leaders and the electorate. I'll rephrase it: "How you do fix an economy that's in recession and deeply in debt without causing any pain?" I'm not sure there is a positive answer to that question.

When Obama saved the auto industry he did it by inflicting pain. The companies were put into bankruptcy, jobs were lost, contracts restructured, shareholders were diluted. Although I think the market would have done a better job, at least the job was done.

But we, the collective we, don't want to endure that fix in the mortgage market. Instead we seek ways to avoid the restructuring that is inevitable. We seek to avoid the restructuring that is inevitable in Medicare and Social Security. We look for a scapegoat and a sugar daddy. Fat Cat Wall Street Bankers happen to fill both roles for Obama and the Democrats. Greece and France want to avoid reality too. That's their choice.

I think we, the collective we, Republicans and Democrats, rich, poor, free marketers (all five of us) and the rest of the population, suffer from the delusional belief we can "fix the system," by tweaking this, and revving that. The monetarists want QE3. Others want massive fiscal stimulus. Some want both. There seems to be this belief if only we did, "fill in the blank," we would solve this problem. Hubris.

Maybe the way we solve the problem is let the economy heal because the fixes sometimes make me think this is more like the ancient cure of bloodletting. The doctors did "something," but it was all for show.

Bill

Ps. You'll ask, what do we do with those who need help? I'll give you the same answer I gave many months ago when we started this conversation. We help them.