Well, I didn't think I would see THIS headline again. In part it is because the current administration has two major talents - blaming things on the previous administration and pushing off problems to the next administration. I fully expected the announcement that we are officially in deep kimchi to show up on January 21st, 2009. The economy for the past few years has been like a game a musical chairs, where you see that the chairs have already been pulled, but as long as the music doesn't stop, there is no problem.
But then the music stops.
I've been of mixed emotions about the big rescue/bailout. The initial proposal was a mess ("hand us your wallet and no one gets hurt"), and I sent letters to my senators and rep to that effect - no bailout without oversight.
Rep. Dave Reichert, who voted no both times, sent back an email explaining his reasoning that the initial bill lacked taxpayer protection. Patty Murray, who voted for the Senate version, said the initial pitch was "a non-starter" but felt that with the added protections for individuals it could work. Maria Cantwell did not respond but voted against it.
And those are the horns of the dilemma facing these guys - is it worse to trust in the very market forces that got us into this mess, or to grab the controls, trying to steer the liner to safety after it hits the iceberg?
Back in the early days of the Republic, we had "Panics". There would be a run on a bank, where people pulled their money out, which spread to other banks and brought everything to a screeching halt (this still happens - a rumor of gas shortages in Nashville a few weeks ago created a panic, and as a result a gas shortage). When the banks started working with each more, we shifted from panics into "Depressions", until we got one of those that overwhelmed the entire financial system. With that, the government got more directly involved with guarantees like the FDIC, and we shifted into "Recessions" - trying to smooth out the dips while still giving us the potential for bull markets.
And now I think we need another term, where the situation becomes so bad that we need to throw in more controls on the economic systems. We've always been a bit socialistic in our capitalism, and with this disaster, we need to see more short-term control, which can then be lifted as the national economic health recovers (we know how to do deregulation - we love it, and we did it way too well, and that contributed to this mess).
I think we need a new name for this. The old recessions of the Nixon and Reagan eras don't seem to capture this new, globalized disaster. Just as panic and depression have moved into the history books, so too do we need a term for when the government has to take a more direct hand.
I favor the term "Intercession".
It sounds pretty cool, fits the the previous names, and sums up the fact that any government intervention will have to have an expiration date and an exit strategy. It is possible to recover the economy, protect the homeowners and workers, and then step back, with the hope that, given proper limits, we don't pitch into this rabbit hole again.
Intercession. Good word. And if it gets picked up, just remember you heard it here first.
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