Friday, October 3, 2008

US elections and economic woes

I must have just watched over 100 hours of news about the US & global economic meltdown, and the US Presidential election, on CNN, Fox, BBC, & Australian Business Channel cable TV, since mid September. What did I get out of it?

  1. The US meltdown was initially seen as being a problem with subprime mortgages. It took days for commentators and 'experts' to announce that this is merely a symptom. The real reason is a combination of greed in financial institutions and borrowers, and systemic failure to have adequate controls in place that allowed rampant high risk loans in an economy that does not produce sufficient real wealth to cover it.
  2. The current bill before the US Congress is a dud. Some in the US have clearly stated during its first passage that its focus is all wrong, yet still it blunders on. This reflects poorly on the US system of government. The real losers will be democracy, the USA & the world at large. The American public do not want the ownership of bad loans switched to the government. This will burden them, be relatively expensive & inefficient to administer & let the perpetrators of the problem, as seen by the public, off the hook. However once the core of the first bill was put up in the House of Representatives it seemed that no significant alternatives could be heard. The American public is being ignored. The Senate passed the same bill that the House of Representatives rightly voted out, with some stupid politically-inspired addons, most of which will anger the public even more, as they are seen to be treated condescendingly.
  3. If the current bill passes the House of Representatives the second time round, the measures might give some brief but passing respite, but will not fix the problem long-term. The American public and global stockmarkets seem to already know this, but American politicians seem to be in marching like lemmings in lockstep along the cliff.
  4. Irrespective of the outcome in the US legislative assemblies, the broader issue of fixing an economy in the face of environmental pressures is not being adequately addressed. Its as if when the chips were down, the global environmental problems got shifted into the too-hard basket. Barak Obama's ideas about focussing on alternative energy as a way to minimise dependence on hydrocarbons in his first debate was great. This has been ignored since then, whereas I believe there needs to be a strategic focus on it.
  5. In summary, it seems to me that so far, the American system has proven to be incapable of making the hard decisions required to settle their economy, let alone do so in an environmentally sustainable way. In other words, the USA is broke, and its economic and political systems are as well.
I am sure I can find others who I think are on the right track.

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