Okay, so irresponsible banks made irresponsible loans to irresponsible businesses and individuals. Said banks sold said loans to irresponsible brokers who ate the gravy (while they could) and everybody made "money" until the market finally realized that it was overleveraged and that there really wasn't anything that supported the economy. Like a house of cards the economy came crashing down. Woo hoo.
Pointing fingers is a great exercise. It exercises the fingers. Helps me type, but it doesn't shed any light on the situation. A history lesson, kiddos: let us go back to Yellowstone NP, 1988. Long-standing government policies, some going back to the formation of the national park system, allowed for an abundance of fuels in Yellowstone and across other federal and state lands. These policies, generally wrapped around attacking natural and anthropogenic fires as soon as they started, led to an excess of fine fuels in the understory and an excess of dead, dying, and diseased trees. After a dry winter and a hot summer, fires attacked the forests across Yellowstone with a vengeance. 800,000 acres, about a third of the national park, burned that summer, and the fires burned themselves out only with the fall snows and cooler temperatures.
The media then were crying and scaring folks. Yellowstone's forests, they said, were gone forever. You know what? Instead of dying off and becoming a barren wasteland, Yellowstone's ecosystem came back. What the media and the government failed to understand was that the lodgepole pines, probably the predominant species of pine in the park, must have fire and heat for the pinecones to release the seeds. Fire, as it turned out, is the critical factor in the renewal of the Yellowstone ecosystem. In many places of the park the fire scars are predominant, 20 or so years after the fire. Instead of pristine forest you see tall, hulking lodgepoles, but beneath, there are new species of plants, species that were choked off from sunlight because of dense canopy and duff. New lodgepoles are growing from seeds laid open by the fires. Flora and fauna flourish. Lesson? It's not nice to fool with Mother Nature.
Our economy is an organic thing. It may not be life as many say life is, but it is life nonetheless. This might (probably?) be a Gaean oversimplification, but there it is. Fire is good for the ecosystem, for it kills of the weak and diseased and allows new growth. I suspect that a fire is good for economy, for it kills off the weak and diseased business models and allows for new growth. It may be a good hook from a pretty cool BOC song, but history shows again and again how nature points out the folly of man. When we went off the gold standard and based our fiduciary system on paper, we set into motion the events that consume the fire burning through our economic forest now.
This may take awhile. What we're in will likely span this Administration (hopefully!) and frame a generation. Some are talking of depression, and you know what? A depression may not be a bad thing. For far too long a combination of actions both public and private led to this. No amount of bailout money or oversight or economic policy shift will stop this wildfire. Might as well piss in the wind. The wildfire consuming our economy will simply have to burn itself out.
This depression will not end in a sound bite or a 60 minute show or a news cycle or an election cycle. The healing may very well take a decade. But only if we allow nature to run her course...birth, growth, maturation, decay, fire, birth.
We survived one Great Depression. We can survive another. We will survive, one way or another.
