The past
five years have given policymakers and regulators the chance to implement traditional
and extraordinary policy options. The worst outcome appears to have been
averted, but we are in a path that is unsustainable whether or not we continue
to reduce the size of the government or tax the rich, as some desire. Perhaps
it’s time to consider policies that are more sensitive to the pain of American
investors - and which could indirectly help in job creation.
$3.5
trillion. This is the approximate amount U.S. households lost from 2005 to 2009 even after
getting unprecedented help from the U.S. Federal government.
Capital
markets are in disarray and will yet get messier before a clearer picture
emerges. I’ve stated in previous writings that the biggest problem we are
confronting is a messy and highly interconnected capital markets. The subprime
mortgage crisis leading to a credit crisis is a notable example of this problem.
The job
creating engines are stuck in the mud and will remain so until the current
system breaks down and leaves policymakers/industry no choice but to replace it
with something. That collapse appears too-close-for-comfort, but why not take
this time to focus our energy on rebuilding a smarter set of policies that
foster sustainable economic and job growth?
