Here I am, sitting in a fantastically beautiful hotel room in Little Rock, in The Capital Hotel, a true gem. It is raining outside like mad insanity. I am watching my life savings disappear. Why? Because the stock market is crashing on disappointment about Secretary Timothy Geithner and Ben Bernanke and President Obama's plans for reviving the credit sector.
And I am thinking that my beloved father had it right when he used to refer me to a quote from the philosopher, Baron von Oxenstiern: "Observe, my son, with what little wisdom the world is run."
Here we are in an economic crisis. We have a clear problem: The banking/credit system attempted suicide by making very dangerous loans. Now, it's on life support, barely functioning. This is true of the banks and insurers as well as of the unregulated or lightly regulated lenders in the hedge fund and other "shadow banks" system ( as Paul Krugman calls it ).
The patient is in the hospital with tubes in him, on a ventilator. The patient, again, is the private credit sector. How does the government respond? By telling the patient, "Heal thyself." Not entirely. But too much.
Now, I wish I could say this is just a problem of the new administration. It isn't. The Bush administration was every bit as feckless and timid and foolish in getting us into this mess and then failing to get us out as the Obama administration. Maybe more so.
The problem is that human beings are incredibly good at getting ourselves into problems and not very good at getting ourselves out. This is particularly true when we are talking about government. Government is a clumsy instrument. As some smart person said, the timidity and confusion gets worse when several people are meeting to discuss the problem. "Councils of war," said Niccolo Machiavelli, "breed timidity and irresolution."
I am not writing this to make you fearful. President Obama is doing a good enough job at making us fearful. He has managed to wring every possible bit of confidence out of the economy by telling us over and over again what a bad spot we are in — the exact opposite of what he should be doing.
I am writing this to tell you that what we are going through is standard policy confusion by government. President Obama and his men and women took office supremely confident that they knew what they were doing and would do it right.
Of course, they should have entered office with fear and trembling about the scope of the problems they face. Alas, what Mr. Obama and his people felt is what all new administrations feel: that they alone know what to do and can do it lickety-split. Of course, they never do. (My sainted father wrote a beautiful essay about this called, "And yes, I said, and yes, I will, and yes . . ." about the Nixon administration and the Reagan administration. It is in his book of essays, "Washington Bedtime Stories: The Politics of Money and Jobs.") But my point is not even about that foolish false confidence that the Obama administration gives off. My point is that eventually, the boat will right itself, and when it does, it will only be because, by luck and chance, things worked out.
The economy tends toward full employment. Exceptional events knock it under water for a time at the bow or the stern or amidships.
But we will get back to an even keel after many trials and errors.
We have in the meantime, in the early days of Obama's America, learned on old lesson. There is no "change we can believe in." There is just another politician con man, who has almost surely conned himself as well into believing he is something unique.
There is just a new group of fools to replace the old group of fools.
There are just the same speculators and traders who have no loyalty to anyone or anything but money.
We will eventually get through it to shore anyway. But next time your daughter comes home from college and tells you that she has found a politician she can believe in to make great and meaningful change, pray for her and for all of us.
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