Politicians worldwide are looking for a scapegoat for current economic problems, but there are a gazillion causes for this recession. Bad loans stemming from the Community Reinvestment Act were made to satisfy Congress who wanted EVERYONE to have a home, whether they could pay for it or not because that bought votes. Democrats in Congress smiled while Fannie Mae and Freddy Mac made extremely risky loans which yielded a ridiculously high rate of foreclosure. Unions were never satisfied with their “deal” with the company and continually demanded higher wages, greater benefits, and even more vacation! And, yes, some CEOs were spending money for themselves that the company did not have.
The end result is that the market could simply not endure these costs when profits were falling or nonexistent. Foreign competition was cheap and did not have to follow the same regulations imposed on American companies by Lieberals. Everyone should have seen it coming because the debacle back in the 70s with the Savings and Loans was also based on faulty, unsustainable loans and business deals . That time, BANKS bailed the Savings and Loans, and Congress, out. Of course, it didn’t cost the public tax dollars because the bailout came directly from banks who were never part of the problem. But, so long as “someone” paid for it, Congress was happy.
This attitude of promising the moon to voters and then scampering to find the means to pay off the debt is so typical of Congress. Congress never seems to understand that profit is not a dirty word! Nor is the accumulation of wealth a sin although the current administration seems to think so.
Some companies saw the upcoming problems and pleaded with the unions to make concessions or face bankruptsy of the company, but the unions refused. Congress created much of the fiasco on Wall Street by, for example, allowing unhealthy mergers between financial institutions and insurance companies, without requiring oversight. Congress allowed CEOs to serve on many different company board of directors and this cronyism created unwise business decisions. The government bailout of Detroit and Wall Street is the direct result of all these influences.
So, where do we go from here? Well, first, Congress should accept responsibility for their stupidity and we should put limits on what and how Congress legislates. Secondly, financial companies should ALL have to follow the same set of regulations if they are engaged in a certain business. For example, banks are limited in where they can invest. Any company performing banking functions should have to follow the same regulations, be under the same system of examinations, and have to maintain the same level of capital to assets ratio!
Thirdly, the public has to realize that individuals create wealth, not governments. Everyone should plan, and WORK, for the benefit of their family. Government should not be responsible for the expenses of individuals. And, we have to get over the idea that someone else is to blame for our problems. We allowed Congress to become a clutter of self-serving, money-hungry, and dishonest “servants”. Yes, they were to serve us, but instead, they ended up serving themselves at our expense.
The only way out of this recession is to change the atmosphere of our country back to when individuals actively worked for their own good. Democracy only works if individuals do their own part to keep the country vibrant. Right now, there are too many being paid for by the hard work of others. We need to change this attitude. Years ago, schools used to reserve a day for teachers to regain their equillibrium. I say it’s time for an attitude adjustment day in Congress and in our entire country!