Plan "B"
Markets are looking ugly around the globe. Investors are voting on the bailout plan with their feet. The crisis is now accelerating.
This is a speech I'd like to hear either one of the candidates give. The man who expresses these views (or something close to it) gets my vote:
>
My fellow countrymen:
These are indeed extraordinary times. The country is in an economic crisis, housing has been in freefall, we are clearly in a recession, and now credit freeze is worsening. We are living through what future historians will call The Great Financial Crisis of 2008.
Times such as these call for extraordinary leadership. Unfortunately, such leadership has been in precious short supply in Washington D.C. Our government has been reacting to events, rather than pro-acting. Its been all crisis management -- putting out fires rather than preventing them. We have been on our heels, playing defense. That is not leadership; that is not considering possible events, and planning accordingly.
It is time for this leadership vacuum to be filled.
We have made some positive steps: A $700 billion-dollar bailout plan was passed by Congress last week, and while flawed, it is a first step. It is the biggest bailout bill in America's history. But now is not the time to sit back and wait for results. We need to consider the next steps that must take place as a follow-on to this rescue plan, as well as contingency plan in case things do not go as we hope. Pray for the best, but be prepared for the worst.
We need a "Plan B."
I propose the following: As of this morning, I have sent invitations to our nation's brightest financial and economic thinkers. It doesn't matter if they are in academia, or the private sector, or in government. It matters not to me if they are a Democrat or a Republican or Independent. Your country needs you, and I hope you will answer the call.
It is time for us to get on the offense.
What is needed now is for the intellectual capital in this country to be put to good use. We have many of the world's finest universities, we have unparalleled genius amongst our populace. Rather than merely rely on a hastily crafted on-the-fly plan, improvised in response to the eruption of crisis, its time we used our brains. We need to be both optimistic, and at the same time, we must always have a contingency plan. A great nation such as ours deserves at least that much.
What we need is our generation's economic equivalent of the Manhattan project. That's what helped the United States and her allies develop the A-bomb and to win WWII.
For the past 8 years, we have ignored our greatest strengths. We have disdained reason and science. We have lived in an imaginary fairytale land, where home prices never went down, where inflation and unemployment were low, and economic growth was strong.
That turned out to be a phantom dream, based upon an illusion.
We now know that much of the growth of the past few years was based on these faulty premises: That we could borrow our way to a better lifestyle, that our financial institutions could speculate their way to profits, that we could deficit spend our way to prosperity. My friends, that is not how you achieve economic greatness. We need to strengthen the economic engine of the United States in every way we can. To do that, the president of the United States needs to take counsel from the wisest men and women in the land.
I invite my opponent to participate in this, to sit side by side with me, and receive counsel from these experts together with me. Whichever one of us win this election next month, he will need to hit the ground running. This crisis is bigger than the election, it's more important than either one of us. It's of great significance to the country, indeed, to the world. (Far greater importance than you would have guessed from the response from the present White House).
In the absence of leadership from the White House, it is incumbent upon the two men seeking that office to show the economic leadership that has been missing.
We are challenged to rise to this occasion. When presented with great challenges, America has always responded with greatness of our own -- and this is one of those times. We are being tested, and we must succeed -- not with just a barely passing grade, but with flying colors and honors appropriate for a great nation.
Given the extent of the financial crisis, and the extraordinary amount of resources that we must bring to bear upon this, in order to prevent this recession from spiraling into something far, far worse, we must leave no stone unturned, no idea unexplored, no action unconsidered.
As a nation, we have weathered terrible crises before: The Depression in 1929, World War 2, Recessions and economic disruption, the attacks of 9/11. The United States has been tested, many times in her past, and has always risen to the occasion every time. The Great Financial Crisis of 2008 is merely another one of those tests that allows the country to demonstrate what its people are capable of -- what we are made of -- what makes us Americans.
This will not be easy. Sacrifices will have to be made. For a period of time, we must put aside our our own self-interest and work together as one nation. There is no room for partisanship. There is no time like the present to embrace our future. And there is no country like the United States of America.
God bless you, and God bless America.
Monday, October 06, 2008 | 07:00 AM | Permalink
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Comments
Great idea. And it would be a great step forward.
What we need now is statesmanship, not politics; true leaders, not just lawyers with influence.
We need to make sure we get through this, that lessons are learned, and that the same mistakes are not made again. Let's not leverage up again, let's not hide risk, let's not constantly chase next quarters profits at the expense of next years, and let's think about what sort of country, or world, we want. Let's be smart about what really matters, not just greed. And whilst we are about it, let's think long term. Let's plan for the 22nd Century.
But what are the chances of this happening? Pretty close to zero. Someone might, just, talk the talk. But walking it? Much harder. Those that say they want to fix it really just want the old game to play on. Another fix please.
Lets hope I'm wrong.
Posted by: Matt Warner | Oct 6, 2008 7:13:27 AM
"For the past 8 years, we have ignored our greatest strengths. We have disdained reason and science. We have lived in an imaginary fairytale land, where home prices never went down, where inflation and unemployment were low, and economic growth was strong."
What possible purpose can this serve except to alienate many Republicans? [BR: 'Cause its true -- time to stop bullshitting ourselves, and serve up a big heaping glasds of reality]
And how does it accord with this statement:
"It matters not to me if they are a Democrat or a Republican or Independent. Your country needs you, and I hope you will answer the call."
And what of the previous eight years, during which time the craziest stock market bubble in the history of the world was created on Clinton's watch? And there can be little doubt that the present difficulties resulted directly from the various attempts to clean up that particular mess. [BR: Blame Greenspan for his policy of targeting asset prices and lowering rates way to much]
Until both sides of the political aisle can give up these pointless jibes, it is going to be extremely difficult to create any plan that is truly workable.
Posted by: Joshua | Oct 6, 2008 7:14:54 AM
Nice idea, but it conflicts 100% with Congress and K street's modus operendi.
What you will need is a benign Hitler to assume sweeping unilateral powers under the banner of a National Emergency to make across the board budget cuts to balance the budget, temporarily redact some of the laws on the books that make it tougher for businesses to start up and obtain capital.
Congress and Bush have both shown glaringly the short side of their respective branches of government. And government can't ban the shorting of credibility.
Posted by: Mark W | Oct 6, 2008 7:21:12 AM
This is really a global problem now. That cannot be solved in one country anymore.
Think about Iceland, a country with a population of 0.5 million inhabitants is about to inject 10 billion euros - about 13,5 billion dollars - to the financial sector. Multiply that number with 600, and you get an idea what that would mean in the US: 8,1 trillion dollars!!
God bless the world!
Posted by: Our man in Helsinki | Oct 6, 2008 7:23:09 AM
BR, you're one of the Best.
Posted by: Mark E Hoffer | Oct 6, 2008 7:23:39 AM
Right on. This is exactly what I have saying to anyone who who would listen for several months. Where are the leaders? Times like this need a Kennedy or a Churchill to get out front and lead and put "Politics as usual" out the window.
We need someone who is prepared to tell it like it is, acknowledge there will be pain and lay out a plan for what needs to get done. If don't like it, don't re-elect me in 4 years. This is what leadership is and it greatly troubles me that at such a time all we get is petty partisan politics.
The US and people deservce better.
Posted by: philipat | Oct 6, 2008 7:27:17 AM
The solution is simple:
Let free markets work; trying to prop up overvalued homes and stock prices will not fix today's problems, only prolong them.
Posted by: Freddie Big Mac | Oct 6, 2008 7:31:10 AM
tested, capable and ready!
B 2008!
Posted by: Nihilism | Oct 6, 2008 7:35:49 AM
Whatever we come up with, I give it about 80 years until it is tossed aside as "old fashioned".
Wash, rinse, repeat.
Posted by: Winston Munn | Oct 6, 2008 7:38:16 AM
So I take it you're all down on the "Get out there and shop" guy's "leadership?"
Posted by: VennData | Oct 6, 2008 7:39:31 AM
This is really a global problem now. That cannot be solved in one country anymore.
Posted by: Our man in Helsinki | Oct 6, 2008 7:23:09 AM
That, above, is a fatal Canard. There is no way to build a house from the roof down.
We need to come back down to Earth, see the Soil, Dig the Foundation anew, and Rebuild our Republic.
Others, on our Globe have problems as well, surely. But, their problems have characteristics reflective of their own Societies, their solutions will be, equally, reflective. It is our Diversity that makes us Strong. The idea of uniformity is only found, much to our late-learned chagrin, in University texts, not in the Nature we inhabit.
Posted by: Mark E Hoffer | Oct 6, 2008 7:40:01 AM
I'd hope they both would name who they'd like to have for Treasury and Chief Economic advisor and have those individuals at their sides for this summit.
First, they need someone to ask intelligent questions and call BS. Neither of them is an expert in economics and markets and that's OK, but the hard questions still need asked and the bull still needs called.
Second, this gives us a window into their judgment in choosing advisors and a clearer idea of what ideas they are listening to.
Third, I think it would be reassuring to markets and citizens to know the people who are going to take over this mess have started to find a transitions team and to build a strategy.
Posted by: Don | Oct 6, 2008 7:44:34 AM
BR - as usual, you are spot on. However, this administration is going out by showing us its true character: as a bunch of rats making their (final?) giveaways to their buddies on Wall St.
People are having an existential crisis right now. If you did everything you have been told to do: work, pay taxes, go to school, etc. you have ended up being screwed and royally.
If truth and reconciliation alienate some mentally fragile Republicans; so what; take the crack pipe away.
If you are still living in la-la land, don't worry. It's over. Better plant a big garden and talk to your Chinese friends about their experiences.
Posted by: Comrade NSA | Oct 6, 2008 7:45:57 AM
I forsee a great new career for you, Barry. Either as Treasury Secretary or a speech writer. :)
Posted by: Anon | Oct 6, 2008 7:54:35 AM
An explanation for recent Dark Gold surge and plunge :
According to Brad Stetser, Bernanke & al. have a gigantic shadow cash reserve amounting approximatively the official one.
What whould you do if you would like to bail the world's economy out in the biggest financial blackmail operation ever :
1°/ Have the dollar down against other currencies, putting your economy seriously at risk.
2°/ In the meanwhile, hedge your gigantic cash amount in petroleum.
3°/ Unwind petroleum positions at the time you need cash to take Wall Street over, sending the dollar up again.
4°/ National-socialisation of all the world's money completed.
Read it here first :
[La Crise pour les Nuls : American Reichstag on fire!]
http://lacrisepourlesnuls.blogspot.com/2008/09/lincendie-du-reichstag-amricain.html
[La Crise pour les Nuls : Oil prices : supply crisis or speculation?]
http://comprendrelacrise.blogspot.com/2008/06/prix-du-ptrole-crise-dapprovisionement.html
Posted by: michange | Oct 6, 2008 7:57:43 AM
Barry - a pretty speech and one both overdue from the major candidates and one they've had an opportunity to make anytime in the last two weeks or few months. Don't believe me ? Here's my seven-point policy proposal to address emergency, quick and long-term fixes from March. It's the Economy Stupid Frog:
http://tinyurl.com/3lsspg
In these last three weeks you've invested an enormous amount of time in criticizing the rescue proposal without countering with your own that met the criteria that Ben and Hank had to deal with: fast, feasible, workable and possibly effective. The recent letter from 200 academic economists had some interesting points as have you but the mechanisms proposed would have been slow to set up and slow to take hold, failing the "a decent solution now, is better than a perfect too late".
So what should we do now ?
Posted by: dblwyo | Oct 6, 2008 8:02:57 AM
"What is needed now is for the intellectual capital in this country to be put to good use. We have many of the world's finest universities, we have unparalleled genius amongst our populace." What if this is incorrect? What if the real problem is intellectual bankruptcy? What if it is more appropriate to say that if you are part of the solution you are part of the problem.
Posted by: joebek | Oct 6, 2008 8:03:26 AM
Just let prices seek their own levels and make sure you have enough money in the tax coffers (slight laugh, big cry), to pick up the pieces once a rational equilibrium is reached.
Posted by: JustinTheSkeptic | Oct 6, 2008 8:04:14 AM
Let me play contrarian again and take exception with your post, Barry. Your "Great Financial Crisis of 2008" is probably more like the "Great Financial Crisis of 2008, 2009, and Possibly 2010". Eh, all you CNBC types are too optimistic. ;)
Posted by: CNBC Sucks | Oct 6, 2008 8:07:33 AM
BR:
If I were a stock analyst, I'd raise BR's equity to "outperform" !
Posted by: Paul Griffith | Oct 6, 2008 8:08:02 AM
as if this is just an american crisis. america is probably not the worst hit country either.there were more idiotic nations(iceland comes to mind) whose fantasizing about an illusory prosperity depended on the kindness of creditors.
whats the big deal to take a hit on your standards of living.it wasnt real anyway.poor people surviving on a meal to meal basis do it everyday sans the hullabaloo
Posted by: dsylexic | Oct 6, 2008 8:12:48 AM
Are you shitting me? The very foundation of this crisis is that we have no leadership from this generation. To expect anyone to step forward with such a plan would be illogical. Although the illogical often happens as we see with Wall Street.
I've written of this as well. Maybe someone with a wider audience in the mainstream press will have an effect of raising this issue to the top of the heap. Leave it to our generation........
If anyone would in fact do so, it would finally mean a new leadership is developing in the economy. It will happen at some time. Were it anyone, it will likely be from our generation. History books will write that baby boomers were the pariah of America.
Anyone over 45-ish in government should be booted out.
Posted by: bdg123 | Oct 6, 2008 8:14:41 AM
[BR: 'Cause its true -- time to stop bullshitting ourselves, and serve up a big heaping glasds of reality]
Whether it's true is utterly irrelevant. What is required is diplomacy and bridge building and not political point scoring and bombast. You will not achieve your aims by deliberately alienating a large part of the electorate and political elite.
[BR: Yes, its all Clinton's fault!]
Where exactly did I suggest that? My point was quite simple: the kind of partisanship you have engaged can be employed by both sides, but it is utterly counterproductive. For a role model I would suggest Churchill post-1940.
[BR: You are correct -- I'll fix above -- my bad]
Posted by: Joshua | Oct 6, 2008 8:14:48 AM
So the plan is, we need to get together and come up with a plan. Not very specific, is it?
Posted by: Daffyd K Jones | Oct 6, 2008 8:24:42 AM
Guys/Gals don't get too upset about things. Because it was not only bad policy decisions that got us here, in fact, most all of it has to do with the competition motive and multi-world governments acting independently. Welcome to globalization and the soon to be new world order. I say we set the capital in New Zealand; afterall that is where Erehwon is.
Posted by: JustinTheSkeptic | Oct 6, 2008 8:26:48 AM
