depression

Most recently, on August 4th, I reminded everyone of the long slowdown that was yet to come. It now appears even I may have been too optimistic. At the time, my estimate was about 12-18 months of downturn. Now I would say it looks more like 3-5 years. Yes, years. You are not reading that wrong. And even that estimate could be way off. Because we haven't seen the end of the credit crisis yet. Not to mention that some people may actually be exacerbating it right now by short selling and other devious tricks.

One thing Mr. McCain said is very true. It was driven by greed. Greed all across the board. From the top to the bottom. And that is one thing Mr. Obama has a hard time admitting. It is easy to point to the rich, but this time everyone played along. The "regular" people had a very active role in all this. Of course, the damage they did was limited by their limited resources, but given that there are so many of them, their contribution cannot be ignored.

Before we give these candidates too much credit though, it behooves us to point out that stating the obvious is easy, however painful it may be to admit to it. Doing something about it is a different matter. And here is a crisis that was decades in the making. How to undo that is not trivial. It all started with Ronald Reagan's de-regulation mantra. Yes, it does go that far back. The anti-government stance that killed regulatory oversight is the root of it all.

Remember in the late 80's when books started appearing warning us of the great slowdown of the 90's? The new great depression. By the mid 90's you may even have joined in with the chorus of nay sayers who welcomed another doomsday prediction gone bad. But chances are you forgot all about it. Or it got lost in the fake scare of Y2K. Remember that one? That was an obvious hoax.

But the coming depression was not. It was merely postponed by a series of bubbles. Things like that happen. Money and paper gains just moved around from one bubble to the next, until they ended up in housing units that are emptily bleaching in the desert sun. Or nearly-paid-off units that were refinanced so their owners could upgrade their kitchens, bathrooms, pools, and SUVs. Now all these gadgets are sitting pretty in foreclosed properties.

During those bubble years we did nothing to make matters better. Quite to the contrary, we exacerbated the problems by venturing into Iraq. By giving tax cuts to the very rich. By further de-regulating and privatizing organizations.

Our war games have made matters much worse. It doesn't so much matter whether we win or lose, whether we leave with honor or not. What matters is that we have sunk inordinate amounts of money we don't have into a hopeless endeavor, whose only "saving grace" is that it made some people incredibly rich.

The money is gone and we have little to show for it. Sure we can pat ourselves on the back and say:"we turned a corner," but in doing so we left our hard-earned cash behind.

As for de-regulation and privatization, has it occurred to you that our government is now taking over the bulk of the financial and insurance industries? Freddie and Fanny, AIG, the list will get longer, rest assured. We are "nationalizing" industries. Hopefully we will be smart enough to regulate them as well. It would be foolish just to pay the bills without reprimanding the offenders. But then again, foolish things seem to be the rule these days.