To date, I have resisted the urge to comment on the collapse of the financial markets in the US because the story was evolving too fast for me to collect my thoughts. Now it's not just the US economy but the world economy that is crumbling. This is a fitting end to George Bush's disastrous presidency.
I heard one promising story this morning on NPR. Nicholas Sarcozi, president of France, called for a complete overhaul of the world economic system. The current world banking system was devised after World War II. According to the NPR story, the new world order will rely less on the health of the US economy-- good idea-- and it is likely the Europeans will play a larger role in developing the system-- also probably a good idea, since our politicians seems to have a hard time making politically unpopular decisions that could help the country but cost them their jobs.
Mulling over all of the recent ups and downs and bailouts, there are a few questions I still have:
1) Who ever thought it was a good idea to allow financial institutions to borrow $30 for every dollar they had in the bank? That's not banking. That's gambling.
2) If the banks had been a little more lenient with defaulting homeowners a year ago, wouldn't everyone be better off now?
3) Will our new president and Congress have the guts and know-how to solve the crisis and cooperate with other countries?
4) How many more financial instutions will be saved with taxpayer funds?
5) Who will want a bailout next? I heard one NPR comentator say that unless business turns around in a major way in the next year, GM and Ford will go under. They are expecting the automakers to ask for bailouts next. I really object to this. It was their bad decison to continue to make primarily gas-guzzling vehicles. They should be held responsible.
6) Is capitalism dead?
A final word... here is a link to a thought-provoking NPR story, "Are We Teetering on the Edge of Depression 2.0?", comparing the current state of financial affairs to 1929. You should check it out to see the pictures of the tent cities, if nothing else. Chilling.