I asked this before here, but now that it’s definite who the President is, and the thoughts of election are now gone (leaving us only with the bad news on Wall Street and elsewhere), I think it’s time to revisit the question.
I think the first relevant question is, CAN the economy be fixed? Are the problems too big, too deep? Is the political will in DC and Main Street too weak? Will the vaunted interconnectedness of the world just drag too much down? Or, to bring it out of the realm of apocalyptic fatalism, is it something that can’t be fixed, in that we just have to wait certain untinkerable factors out?
If you think it can, THEN the question becomes relevant: what can President Obama do? What SHOULD he do? Can he at least keep things from getting Depression-style worse?
(Feel free to add any relevant questions I’ve missed.)
I wish there was an easy answer. Renegotiating the mortgages and keeping people in their homes and making payments was an answer once ,when that was the big problem. Now we see the swaps are much,much bigger and still mostly hidden from public knowledge. We will have trouble fixing what is still hidden. We allowed the financial institutions to sell insurance on mortgages that they did not even have ownership of. They made extremely long and confusing contracts to hide their real purpose. They raised the margins to 40 to 1 from 14 to 1. The money to fix that is not around.
If we could just make the guys who profited pay for it, it would help.But we are in a big hole and I fear we will have a huge problem in the near future. There is no easy fix.
From posters on the dope and other sources like bloomberg news , the crisis has been in the works for nigh on twenty years , a culture has formed inside business circles about how profit should be generated and being dismissive about human casualties.
In short what should obama do, so that the economy can fix itself.
Its time we started thinking green on money and apply the same thought to the econsosphere as we do to the biosphere. As right now we have the financial equivalent of the dustbowl of the thirtys.