Tuesday, October 07, 2008

the end of the world as we know it?

save yourself, serve yourself. world serves its own needs
listen to your heart bleed
tell me with the rapture and the reverent in the right - right

you vitriolic, patriotic, slam, fight, bright light, feeling pretty psyched

it's the end of the world as we know it
it's the end of the world as we know it
it's the end of the world as we know it and i feel fine

(from "it's the end of the world as we know it," r.e.m.)

it didn't seem like that long ago that the u.s. economy was envied and our freedoms and opportunities were a model in many parts of the world. but that was then.

today, banks are failing, including some of the giants. the housing market is tanking. credit markets are (supposedly) seizing up. the dow dropped another 500 points today, to its lowest level in five years -- a 33% decline from its high a year ago. in the last five days of trading, that's a paper loss of $2.2 trillion (!). just to get an idea of how much money that is, if you made $1/second for every second of every day , you'd be making nearly $31 million per year -- and it would still take over 30,000 years to make a trillion dollars. and now the crisis is threatening to go global.

in response, the u.s. congress has committed something like a trillion dollars to 'fixing' the problem -- apparently with more to come. it is a power grab unprecedented in american history. will it help? no one knows for sure, but the conventional wisdom seems to be that we can't afford to do nothing.

i disagree with the conventional wisdom. i think no matter what we do, we're in for a rough ride. lots of companies could fail. people will lose jobs and houses. retirement savings could be wiped out. it might get ugly. but it could be even worse. no one knows for sure what the result of these government bailouts will be. we could end up with the same painful economic correction and pile up a mountain of debt for future generations. hyperinflation or stagflation are also possibilities.

the first rule of medicine is "do no harm." it ought to be the first rule of governing. yet if history is any guide, there's reason to believe that the government intervention will only lengthen the pain. so why do politicians insist on a bailout and predict disaster without it? some of them are staring at the trouble ahead, and hoping their 'hail mary' pass will connect. but some of them are bullying other politicians (and the public) into this 'rescue' before it can really be analyzed. and all of them surely know that it helps to solidify their power. no one wants to watch the economy tank and be perceived as having done nothing. better to do something, even if it's ridiculously costly, even if it makes the problem worse in the long haul. after all, in the long haul, someone else will have to take the blame.

our leaders on both sides of the mainstream political aisle seem to have lost the will to analyze problems with cool heads and attention to history, and to make hard decisions that put the country first, fearing that it would cost them their jobs. it's not just the financial crisis (which, imo, was caused largely by well-meaning but misguided government policies, not by the unpredictability of free markets! it's always easier to blame greed or deregulation than it is to take a good, hard look in the mirror). they know many of the issues that are blowing up and cannot continue as they have -- the deployment of american troops in over 100 countries around the world, engagement in two hot wars, the insolvency of social security and medicare, and more -- but they simply will not confront them head-on. in some cases (like president bush's prescription drug plan) they add to them.

and what are the american people doing? worrying. waiting for the government to save them. trading freedom and opportunity and their children's future for perceived security now. what they aren't doing, for the most part, is accepting some personal responsibility for what has happened and for the solution. nor are they demanding a more constitutional, restrained form of government than the one that helped create this mess. whatever else happens, the federal government will surely grow more powerful and more invasive than ever before. the old saying that in a democracy, you get the government you deserve, never seemed more true.

this may not be the end of the world. but it is, perhaps, the end of the world as we have known it.

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