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Can Washington Bring Confidence to the Market?

by Steven

I have never experienced a depression and I can't imagine what it would be like to have double digit unemployment and inflation. For the first time in recent years, we are facing the possibility that these things might become a reality. There is a possibility that the bailout will not work. Banks might not be able to sell their bad mortgages and will not be able to lend to each other. The system might just have to work its way out of this, but that could involve unavoidable casualties that would be really ugly for the general public.

I do know that there needs to be confidence in the financial system for it to function properly. Right now that is not the case. Washington has to do their share to provide confidence.

Thomas Friedman had a good op-ed in today's New York Times appealing to congress to get their act together. I have pasted some of it below for the full article click here.

"I've always believed that America's government was a unique political system -- one designed by geniuses so that it could be run by idiots. I was wrong. No system can be smart enough to survive this level of incompetence and recklessness by the people charged to run it.

This is dangerous. We have House members, many of whom I suspect can't balance their own checkbooks, rejecting a complex rescue package because some voters, whom I fear also don't understand, swamped them with phone calls. I appreciate the popular anger against Wall Street, but you can't deal with this crisis this way."

"I always said to myself: Our government is so broken that it can only work in response to a huge crisis. But now we've had a huge crisis, and the system still doesn't seem to work. Our leaders, Republicans and Democrats, have gotten so out of practice of working together that even in the face of this system-threatening meltdown they could not agree on a rescue package, as if they lived on Mars and were just visiting us for the week, with no stake in the outcome."

Most of us have only lived in a time of great prosperity, never having to experience the realities of an economic depression; let's make sure that we don't have to experience the unimaginable.