News yesterday of coordinated action by world central banks to lower interest rates. Each day brings a new story of some action by government (and here I'm speaking of our government) to mitigate the impact of the credit crisis.
But as each new "fix" is announced, the previous one has not had a chance to take....and Wall Street sits back waiting for the next fix to come, so it prices in pessimism. This non-virtuous cycle feeds a lack of confidence in the system, causing governments to continue to "do something".
It is time to stop doing. It is time for the President to go on television and say, "That's it folks, we've done what we're going to do. There won't be any more special bailouts, buyouts, interest rate cuts or emergency actions. We're gonna ride this one out and the country will come back."
What I'm advocating here is providing the American people and the markets with a sense of the "new normal". We haven't figured out yet what "normal" is in the post-mortgage crisis financial world. Crafty investors are trying to find ways to make money if things go down, and if things go up....this is what crafty investors do and we should not mess with that. What we shouldn't do though, is continue to give them the room to maneuver they require because of the uncertainty generated by nearly continuous manipulation of important variables. Let the foam in the cola settle out, and let's see what we have. Just as a Dow Jones average of 14000 was in part the result of "irrational exuberance" so 9200 is the result of irrational pessimism.
That's all. We're done. Go back to work, stop looking at the stock market every thirty minutes, produce more, work harder, get the country moving.
Well I just got fired from my job of 14 years...Most of us don't have a military pension to lean on. I'm done listening to G.W. spewing lies. But hey, I'll take it from you and try not to worry.
ReplyDeleteHope you saved a few bucks over the last 14 years and didn't go for one of those NINJA loans on a McMansion.
ReplyDeleteI lost a job once in 1995 and again in 2002 though I don't remember blaming Clinton or G.W. for either setback.
ReplyDeleteI'm sorry you lost your job, and I'm sorry I'm earning a pension.
ReplyDeleteAll in all though, I think what I've advocated is likely to be more effective in helping the economy get to a place where you might find a job.