Economic Issues Remain in Wake of Debt Resolution
The 11th hour agreement by the US government is unfortunately not where the story ends.
Patriotic citizens will argue that the political process is alive and well. They may be right, but the greater good took a backseat to partisan agendas.
As aware as we've been through the years -- proactively watching this financial monster build from the inside out -- the fact that a US debt default was even on the table is a testament to the sorry state of our union. (See: The Upside of Anger)
The discussion isn't just about financial performance anymore, although that will likely serve as the measuring stick for most Americans. We've witnessed the devolution of the capital market construct and the societal implications will be profound. (See: Short Sale of American Icons)
Put yourself in China's shoes, or slip on a pair in Eastern Europe. In their view, the financial crisis was engineered in the USA and outsourced in kind. And while they're being force-fed a bitter pill of austerity while the rest of the world weighs their fate, stateside politicians used this phase of the financial crisis to further their own interests.
All the while, the US dollar -- the world reserve currency and the measuring stick for global asset-class success -- is down almost 40% during the last decade. (See: The Anatomy of a Recession)
The first step in solving a problem is admitting that you have one and despite the finger-pointing currently in play, I've yet to see anyone accept blame, offer a mea culpa, or reference past mistakes they've made or learned from. There would be no shame in that. In fact, I (and I imagine everyone else) would appreciate a humble dose of candor.
We don't "do" acrimony in the 'Ville -- that's long been our mantra and yes, it's easier said than done -- but I will share that I've found this recent process disgusting. I understand that no one person or party is responsible for the enormity of our economic condition, but many of them were -- in some way, shape, or form -- complicit.
Rather than using this crisis as a battle cry to unite our fractured financial fabric, policymakers seem intent on grinding it to dust. They're so busy chanting Republican or Democratic ideologies that they've lost sight of an inconvenient truth: upward taxation (select incomes and items) and austerity measures (spending cuts) will be needed if we're to meaningfully move the national needle.
To be clear, I believe we'll navigate this historic stretch and emerge better, stronger, and more learned. (See: George Soros follows His Own Advice)
Until we take our medicine, however, we're compounding the problem in cause and effect. It's akin to telling a fib; once you lie, it creates an increasingly tangled web with a thinning margin for error. The half-truths and dark corners have been a long time in the making. It's almost as if policymakers now believe their own bull... case.
Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at email@example.com.
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