Op-Ed: Who's Afraid of the Future?
Ten causes for concern.
As a student of history, I'm drawn to the concept of cycles. It's comforting to think that history has recurring patterns and a natural rhythm. But can societies as a whole learn from the past, or are they condemned to repeat it?
In 1997's The Fourth Turning, William Strauss and Neil Howe wrote:
"America feels like it's unraveling. Though we live in an era of relative peace and comfort, we have settled into a mood of pessimism about the long-term future, fearful that our superpower nation is somehow rotting from within. The America of today feels worse, in its fundamentals, than the one many of us remember from youth, a society presided over by those of supposedly lesser consciousness. We yearn for civic character but satisfy ourselves with symbolic gestures and celebrity circuses. We perceive no greatness in our leaders, a new meanness in ourselves. Each new election brings a new jolt, its aftermath a new disappointment."
We enter 2009 pessimistic about our future. The public has lost faith in government and financial institutions. Distrust of politicians, bankers, CEOs and financial advisors is well founded. As I watch the likes of Barney Frank, Nancy Pelosi, Rush Limbaugh, and Sean Hannity work their rhetorical magic, it's clear that we have a major deficit in wisdom, courage and leadership.
Instead of analyzing how we got here and where we want the country to be in 10 years, when this crisis is past, we focus only on specific right-wing or left-wing agendas and position ourselves for the next election cycle. The shortsightedness of our current leadership will lead to the next -- and more dangerous -- phase of this crisis.
Congress will pass a stimulus bill in the next week. Though it's being sold as an infrastructure bill, only 5% of the spending is earmarked for infrastructure. The second helping of TARP will be dished out to banks, insurance companies, automakers, and those people who bought more than they could afford.
It's tough to predict what will happen in the next week, let alone the next decade. But here's my best guess:
1. The stimulus bill will grow to $900 billion (this is how congresspeople "compromise") and will be passed along party lines. President Obama will convince the public that failure to pass this bill will result in a depression. Every penny will be borrowed from foreign countries and be paid for by increased taxes on future generations. An unfunded tax decrease or spending increase is a tax hike for our children and grandchildren.
2. Timothy Geithner, our TurboTax Treasury Secretary, will introduce the sixth variation of the TARP program. It won't do what needs to be done. Smoke and mirrors don't pay off debt. Bankrupt financial institutions and corporations (Citigroup (C), Bank of America (BAC), General Motors (GM), Chrysler) must be put into receivership; their shareholders ought be wiped out. Good banks should take over from bad banks. Corporations with sound management and viable business plans should prosper.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Daily Recap Newsletter