A few people have used the Big, Bad D word lately--Depression. As in Great. What a strange couple of weeks it's been and the hand-wringing and Sky is Falling talk has a basis in reality for once. I don't think it's going to happen and I think that hovering all over the economy via cable news and watching its every bump and dip like a Helicopter Mom with her Delicate Child at the playground with the ambulance on speed dial is not a good thing for us or for the economy. Things are bad. And they could get worse. But it'll probably simmer down by the end of the week and with time we'll bumble our way out of this. It won't be easy and it won't be pretty, because we've allowed the mad scientists on Wall Street to create some funny looking creatures by grafting mortgages onto securities and creating those pesky little credit default swaps ex nihilo--we don't exactly know how they'll react so it'll take a little trial and error to find the antidote.
What? Trial and error? NO, WE NEED DECISIVE ACTION NOW AND WHY DIDN'T YOU COME UP WITH A PRESS RELEASE YESTERDAY DESCRIBING YOUR PLAN IN DETAIL AND OH MY GOD I'M GOING TO HAVE TO SUSPEND MY CAMPAIGN.
Breathe. Trial and error is what eventually got us out of the Great Depression.
FDR was elected on a pretty vague platform when it came to what he was going to do to address the GD. He wasn't entirely clear on his position regarding the Gold Standard; he didn't have a plan outlined as to how to shore up the banking industry; in fact, no one really knew what he was going to do. Yet somehow he gained the electorate's trust during the election (or, possibly, Hoover just completely lost that trust) and he got elected on his somewhat vague optimism and even vaguer plans. Even worse, to our Helicopter Parent eyes, he actually let the economic situation get worse before it got better.
How did he do that? During Hoover's lame duck period, Hoover tried like hell to get FDR to cooperate and show solidarity with his half-hearted attempts to fix the economy. FDR went to the White House for a couple of conferences but he never really signed on publicly and some experts argue that this actually brought the economy to the breaking point by the time FDR was sworn in. This gave FDR carte blanche when he assumed office because everyone was so desperate for things to get fixed somehow. And then FDR and his cabinet went to work, trying a little bit of this and a little bit of that, planting some trees, building some public works, shuttering some banks, creating some new programs, tinkering here, overhauling there. It took time and patience (and some argue a World War) but eventually he got the economy back on its feet with enough protections and firewalls to keep us from getting into such dire straits again since then. Until now (maybe).
Now we're stuck with an economy that looks bad. Very bad indeed. And we want overnight fixes and we want the fixes to be perfect from the get go and most of us want our politicians to have the cojones to pass a bill while most of us claim to think it's a bad bill. So we have to breathe. And stop hovering quite so much. And be willing to tinker and overhaul and break down and build back up and endure some mistakes and missteps along the way. The biggest thing that we cannot do is head into the fixes that we'll need with a bull-headed ideological approach because if we do that, we're not going to have the creativity to think of fixes that may not be immediately apparent. We need to be willing to get a bunch of people in the room who are able to free think every possible way to address the problem and yet people who are able to dissect those ideas once they're conceived and throw out the bad ones and figure out how to implement the good ones.
We're in a tight spot, but running around in circles for the sake of doing something is not going to make the situation better. I think the bailout plan is step one, whether it comes in its current big ticket form or if it shrinks a bit and morphs into something a little bit different. The bailout will probably just buy us some time and time is what we need right now, to breathe deep and think carefully and boldly, time to be willing to find the things that are going to work. The economy will trip and fall a few times in the next few months--but if we run over immediately and try to isntantly make things better, instead of it picking itself back up and climbing back on the play fort it may well just collapse in a puddle of tears.
Our economy is broken in several fundamental ways and it's been trying to tear along at an unsustainable pace on a bubbly foundation of petrochemicals that are not always going to be there and on a premise of food production that is equally unsustainable. I don't know if the current crisis is the one that will turn us in a different and more responsible path or not; if not, we will have another crisis in the future that will do so. But the economic world we're currently living in will not be the one people are living in one hundred or two hundred years down the road. We probably won't start making the needed changes until we hit rock bottom and I think we're a good ways away from that right now. But we'll get there given time and in the long run that will be a good thing. We'll probably never get to the point where nomadic tribes are drying out deer meat in the passing lanes of the New York State Thruway, when Wall Street is just another gutted monument to an unsustainable past. But our economy will fundamentally change over the next few generations and I hope that we begin planning for that now and start creating a soft landing for the changes when they occur.
