A Few Timely Remarks On The Current Environment

First off, I would highly encourage you to watch this clip from the excellent movie Network. It is very appropriate for the times.

I'm really quite amazed at the general media panic we see because of the failure of this bailout bill. It seems wherever I turn, there is an excoriation of those who voted against this bailout bill. The media is contributing to a panic and pressure to pass this bill in its current form as opposed to the intellectual discourse and peer review we have talked about as necessary to hone the blade of any government involvement in the banking crisis. We started down this process with Congressional hearings and lost all momentum.

I have no doubt much of the media response is the corporatocracy at work. It is also human behavior at its best - ridicule anyone who presumes to take a different position from the herd. Especially in a panic. This has been reinforced by less than Presidential remarks coming from the White House over the past two weeks. That includes both content and tone. We have leadership (a term I use very liberally) that either doesn't know how to manage without interjecting fear or that knows how to manipulate using fear as a motivator. It is wearing in its usefulness on the electorate. I have written about effective management styles and how destructive negative or fear-based management is. Surely this outcome is predictable for the exact same reasons we talked about in a prior post on leadership. Either way, life is not a contextual allegory for Aesop's fable, The Boy Who Cried Wolf. The current political leadership has lost its ability to lead because of its very management style. The implications are much broader than political leadership.

Remember, very few in the television press are actually qualified to comment on the validity of any bill. Instead, what they should be doing is educating the electorate with facts. Not to be providing us with this incessant commentary pawned off as news. Our media has turned into a never ending mind bender of the electorate's thought. Evidently, they generally don't know what ails the economy or the banking system and don't understand any methodology or process-driven resolution required to deal with this crisis. Can I just get the damned news? Instead, we have generally seen Ready, Shoot, Aim! from both government and the media.

The media simply sees someone in a position of authority telling them this bill is necessary. The best way to serve in a democracy is not through blind faith. Rule by the people works, amongst many other reasons, because of discourse. Media panic seemed reinforced by the stock market drop. Well, I hate to break it to anyone but asset prices have been dropping for years. Additionally, given the relative orderliness of yesterday, I wouldn't put it past some on Wall Street to dump the market to reinforce their displeasure. That isn't a stretch. Wall Street has thrown tantrums before and used such schemes to get their way. Any bureaucracy trying to save itself, and that is Wall Street's core concern as opposed to the stock market, will go to great measures. Manipulation is one of them.

Many in the media were saying this bill's failure is a sign government is broken. Actually, this is the first sign in years that government still works for the people. Even if it is only because we are a month away from election for every House member. Don't worry. Congress is in the middle of a great transformation. They just don't realize it yet.

Let's be clear. Few, if any, in Congress are stating there should be no involvement in restoring liquidity to the markets. But, there are many better ideas that might actually have some chance of working on some level. That includes methods used during the Great Depression as a starting point. Additionally, there are other methods that can be studied from around the world when similar situations arose. I can think of a half dozen ideas and there are many people who are exponentially more qualified than I am to assist in resolving this. We need less talk from politicians and media. We need more action in the form of reaching out to experts to craft a bill that will attempt to accomplish specific, documented objectives. What we don't need is a rehash of this same bill that seems to be circulating as the next step. How do we know what we are attempting to solve unless we document the objectives. And, how do we create a feedback process as to whether attempted fixes are not working or that we need to try a new method unless we document objectives? I still literally have no idea what the objectives were for this bill. Is it to save the banking system? To restore liquidity to nonfunctioning markets? To recapitalize banks? To keep banks from failing? To help homeowners? Stop home prices from declining? To bail out Wall Street? To bring God back to earth to save us from ourselves? All of the above? What is the objective?

How much confidence would Congress bring to the process if it were to set up a task force of subject matter experts headed by someone with great name recognition and trust. Volcker? Buffet? They don't need to be the subject matter experts. Just to be associated with confidence in financial markets. If Congress had done this initially with a two week deadline, we'd be well on our way to passing a reasonable bill that wasn't the result of political objectives instead of economic objectives.

Make no mistake, both parties are very complicit in this mess. Every politician with more than a handful of years of experience has knowingly and actively created policy that contributed to where we are. My point is this process needs to be taken out of the political environment and into the hands of people that can help us solve the issues before us. I don't know about you but I wouldn't ask Hank Paulson or Nancy Pelosi to solve a complex physics problem if Albert Einstein were available. Why is this situation any different?