all better?

so after an awful week on wall street, the market makes a furious rebound on monday -- the biggest one day gain ever. guess the government has finally fixed everything?

don't count on it.

no one is saying that the government can't make a substantial difference in this mess. they will, and in the process, they will create winners (mostly wealthy friends of the powerful) and losers (nearly everybody else). when the progress seems to stall, they will insist that what is needed is more intervention. and the problem will drag on and on. for a recent example, take a look at what happened to the japanese in the 1990s (here and here), where a similar economic crisis and series of government 'fixes' led to a lost decade in which economic expansion came to a complete halt.

they say that those who don't learn history are doomed to repeat its mistakes. how can we walk right into the buzz saw? unfortunately, our political leaders (and perhaps the majority of the american public) can no longer face the prospect of a painful readjustment -- the public, because we're used to living well beyond our means, the politicians, because they'd probably lose their jobs if they were perceived as not doing enough in the midst of a crisis. and since long-term problems end up being someone else's problem, they'll act, even though the long-term results are very likely problematic (cf. the unwillingness to tackle the problems in social security and medicare).

the neo-cons tell us that the great threat and challenge of our generation is militant islam. but i think that the greater challenge is internal. we are looking at a lot more than a crisis in the economy. we're looking at an american identity crisis.

down again?

sure am glad we passed that $700 billion bailout to stabilize the economy. let's see...

• the dow fell today to 8579.19, another five year low -- that's a 39% decline from its high of last year. the s & p 500 and the russell 2000 took a similar hit.
• libor remains stubbornly high, 'freezing' the credit markets. and that's in spite of the fed's recent rate cut.
• the ban on short selling -- unprecedented and a huge mistake -- is not only not working; it's having the opposite of its intended effect.
• aig apparently spent the $85 billion loan recently granted by the federal reserve, and just got back in line for nearly $38 billion more.

somebody stop the madness! when will we all acknowledge that the government can't fix every problem -- and that in many cases, it causes and exacerbates them with its willy-nilly interventions?

why is there no emerging movement to shut down fannie mae and freddie mac and get the government out of the home loan business? where is the independent investigation of these and other failing institutions that have given tons of money to the politicians who are now bailing them out?

and where's ron paul when you need him?

tahoma (aka mount rainier)

when grandma p was out visiting, we had the chance to visit tahoma national park. just beautiful. we often see the mountain from where we live; on a clear day, it dominates the southern landscape. no wonder -- it's the tallest mountain in the cascade range, at over 14,000 feet (almost 4,400m). it's also a volcano (scary, huh?).

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.

resegregation

the more things change, the more they stay the same.

time magazine wrote about resegregation more than 40 years ago (find the article here). less than a decade after court-ordered desegregation, schools were becoming more segregated than ever. back then, many whites were leaving for the suburbs, leaving higher concentrations of blacks in the cities. and a number of black students, for a variety of reasons, were beginning to avoid racially-mixed schools. the article concluded, "the phenomenon of resegregation also suggests that the law can go only so far in correcting racial inequalities...."

fast forward to 2008. the christian science monitor reported recently that schools around the country are rapidly resegregating, citing a study from the civil rights project (see the article here). the reasons cited? in addition to the recent court rulings striking down voluntary integration programs, the main ones are white flight from the cities and widespread de facto segregation in neighborhoods. in a separate piece, pulitzer prize winner cynthia tucker adds that in her hometown, which remains racially integrated, whites have largely deserted the public school system -- in effect, recreating (mostly) black and (mostly) white schools.

the forces that keep us separated from one another are powerful and persistent. but God is at work. and he will reap the harvest he has sown.

for he himself is our peace, who made both groups into one and broke down the barrier of the dividing wall, by abolishing in his flesh the enmity, which is the law of commandments contained in ordinances, so that in himself he might make the two into one new man, thus establishing peace, and might reconcile them both in one body to God through the cross, by it having put to death the enmity. (ephesians 2:14-16)