| Submit your comments on this article |
| Home Front Economy |
| This Is Not a Test. This Is Not a Test. |
| 2009-03-12 |
| By THOMAS L. FRIEDMAN I've always been ambivalent about Tom Friedman. He always tries to have it all ways and to look reasonable to everyone. Basically he likes to arrive when the fire is going out and claim victory by proclaiming the winning formula as his own idea. This is classic Tom Friedman. All wet pasta and head in the clouds. [I am being polite on that point] It's always great to see the stock market come back from the dead. But I am deeply worried that our political system doesn't grasp how much our financial crisis can still undermine everything we want to be as a country. Friends, this is not a test. Economically, this is the big one. This is August 1914. This is the morning after Pearl Harbor. This is 9/12. Yet, in too many ways, we seem to be playing politics as usual. Our country has congestive heart failure. Our heart, our banking system that pumps blood to our industrial muscles, is clogged and functioning far below capacity. Nothing else remotely compares in importance to the urgent need to heal our banks. So far stating the obvious. Yet I read that we're actually holding up dozens of key appointments at the Treasury Department because we are worried whether someone paid Social Security taxes on a nanny hired 20 years ago at $5 an hour. That's insane. It's as if our financial house is burning down but we won't let the Fire Department open the hydrant until it assures us that there isn't too much chlorine in the water. Hello? Hello what? Is the issue trivial, or does it display an underlying incompetence and unpreparedness which is frightening? Meanwhile, the Republican Party behaves as if it would rather see the country fail than Barack Obama succeed. Total misrepresentation of most of the reasonable republican spokesmen. First no-one wants the country to fail. Some do want Obama to fail on his current path of economic and centralizing madness. If Obama is demonstrating incompetence as implied in the above paragraph what is wrong with opposing other actions which are considered incompetent? If a fire is burning do you want the fireman to put more petrol on the fire or hope he fails at that and instead does something competent to put it out? Rush Limbaugh, the de facto G.O.P. boss, said so explicitly, prompting John McCain to declare about President Obama to Politico: "I don't want him to fail in his mission of restoring our economy." The G.O.P. is actually debating whether it wants our president to fail. Rather than help the president make the hard calls, the G.O.P. has opted for cat calls. It would be as if on the morning after 9/11, Democrats said they wanted no part of any war against Al Qaeda -- "George Bush, you're on your own." Obama did oppose Iraq. Said so himself. As for President Obama, I like his coolness under fire, yet sometimes it feels as if he is deliberately keeping his distance from the banking crisis, while pressing ahead on other popular initiatives. Tommy Baby. Its not a F&%$& Western. Barry boy has withdrawn to his foxhole to plot more big government stuff. He is AWOL from the real stuff. I understand that he doesn't want his presidency to be held hostage to the ups and downs of bank stocks, but a hostage he is. We all are. Great and difficult crises are what produce great presidents, so one thing we know for sure: Mr. Obama's going to have his shot at greatness. This crisis is uniquely difficult in four respects. First, to get out of a crisis like this you need to let markets clear. You need to let failed companies, or homeowners, go bankrupt, unlock their dead capital and reapply it to thriving entities. That is how the dot-com bust ended, and out of that carnage emerged a whole new set of companies. The problem with this crisis is that A.I.G., Citigroup and General Motors -- and your neighbor's subprime mortgage -- are not Dogfood.com. You let the market clear them away, and we could all be wiped out with them. Therefore, the president has to find a way to punish bad financial actors without setting off another Lehman Brothers domino effect. Obvious Second, we need to get a market going that would bring fair value and clarity to the "toxic mortgages" crippling the balance sheets of our major banks. This will likely require some degree of government subsidy to private equity groups and hedge funds to get them to make the first bids for these toxic assets by guaranteeing they will not lose. This could make great policy sense, but be a nightmare to sell politically. It will strike many as another unfair giveaway to Wall Street. Unfortunately, the president may have to look the American people in the eye and explain that "fairness is not on the menu anymore." All that's on the menu now is whether or not we avoid a system meltdown -- and this will require rewarding some new investors. Obvious Third, the president may have to make some trillion-dollar decisions -- like nationalizing major banks or doubling the economic stimulus -- with no real precedent and without knowing all the long-term ramifications. Hey Tommy. Here's a thought. How about shelving all the political pork which won't take effect for years? How about canning the budget? How about cutting the social security impost on employers in half. How about eliminating the capital gains tax on all homes bought out of foreclosure? How about agreeing to spend $300bln updating the military? All that money will stay in the USA because domestic companies and business do most of the supplying. And guess what. It won't cost trillions. Finally, to do all this, the president has to make us realize how dangerous a moment we're in, without creating a panic that will prompt Americans to put every dime in their mattresses and undermine the economy even more. Too late. He has already scared the living bejesus out of every productive and semi productive member of the society. Can't put that genie back in the bottle. All this will require leadership of the highest order -- bold decisions, persistence and persuasion. Yep. Just like Churchill. Unfortunately he sent the bust back There is a huge amount of money on the sidelines eager to bet again on America. But right now, there is too much uncertainty; no one knows what will be the new rules governing investments in our biggest financial institutions. If President Obama can produce and sell that plan, private investors, big and small, will give us a stimulus like you've never seen. Which is why I wake up every morning hoping to read this story: "President Obama announced today that he had invited the country's 20 leading bankers, 20 leading industrialists, 20 top market economists and the Democratic and Republican leaders in the House and Senate to join him and his team at Camp David. 'We will not come down from the mountain until we have forged a common, transparent strategy for getting us out of this banking crisis,' the president said, as he boarded his helicopter." Nope. Another committee meeting. In any case none of these poseurs has figured out the secret to it all. Small Business. That's where all the employment will come from. Just ask 20 small businessmen. But part of the deal is that Nancy and Harry and Barney have to agree to go to Iraq and trek across it with plenty of water and no phones. They can't come back until a deal is agreed. Trouble is I still wouldn't trust Obama to carry out the agreement. |
| Posted by:Omoter Speaking for Boskone7794 |
| #13 Even if not, it's a worthy meme ... and certainly worthy of being passed on! |
| Posted by: Sgt. Mom 2009-03-12 11:55 |
| #12 Not an original. |
| Posted by: Besoeker 2009-03-12 11:53 |
| #11 O.B.A.M.A ... Besoeker, you are so evil! I am so stealing this acronym and using it everywhere! |
| Posted by: Sgt. Mom 2009-03-12 11:50 |
| #10 O.B.A.M.A ... Besoeker, you are so evil! I am so stealing this acronym and using it everywhere! |
| Posted by: Sgt. Mom 2009-03-12 11:48 |
| #9 One Big Assed Mistake America. |
| Posted by: Besoeker 2009-03-12 11:36 |
| #8 This is 9/12. Yet, in too many ways, we seem to be playing politics as usual. You just figured this out? |
| Posted by: Frozen Al 2009-03-12 11:25 |
| #7 Dear-Leader-Replacement Slogan offering #3 (suitable for bumper stickers, plane ad banners, and all purpose answer to any question that begins, "so why do you think ___insert favorite administration clown name here___ is doing that?"): "It's the LEFTIST, Stupid!" |
| Posted by: Hyper 2009-03-12 11:25 |
| #6 Which is why I wake up every morning hoping to read this story: It will not happen Thomas, you've just awaken to another bad dream. |
| Posted by: Besoeker 2009-03-12 07:41 |
| #5 Last thing Friedman got right was to coin a phrase: Hama Rules. Coined it in reference to the manner Daddy Assad dealt with the rise of fundie islam in Syria that Daddy Assad felt was a threat to his regime. Circa 1981 Assad identified the city of Hama as the location of a large group pf fundie muzz he deemed a threat. Assad had his army surround the city, shelled it for a week, then ground the remains with heavy equipment. Low estimates of the death toll are put at 10k. Some think as many as 25k died. Nobody knows for certain. What is certain: the city of Hama no longer exists and the fundie muzz never bothered Assad again. Hama Rules. |
| Posted by: MarkZ 2009-03-12 06:59 |
| #4 A lot of people begin lectures and speeches by quoting TFriedman's "the world is flat". It's a real time saver for me because when they do that I realize I can just nap through the speech. |
| Posted by: mhw 2009-03-12 06:43 |
| #3 OSB has hit upon a pet theory of mine about the economy,and that is that the only entity bound to suffer from all this spending, price increases and deflation that will still dog this economy will be government itself. Small businessmen and entrepenuers will always find a way to turn a buck, all the crazy Obamanation socialists at the top notwithstanding. My money is on American capitalism out of the gate every time, because that is usually where the smart money is during a recovery. And American small businesses form the backbone of American capitalism |
| Posted by: badanov 2009-03-12 00:48 |
| #2 He is an idiot when it comes to geopolitics. I stopped reading him a decade ago. He was once a good reporter in the sense of describing things. Analysis is just too much for him. |
| Posted by: JAB 2009-03-12 00:35 |
| #1 Yeoman work, OSB. Unlike you, I'm not ambivalent about Friedman. As your own inline snarks above show, he generally combines the silly and the obvious. All with a brain-dead prejudice against the usual suspects. Back when AllahPundit had his own blog, he did some hilarious spoofs of a typical Friedman column. Among Friedman's notable whoppers are his statement a while back that all the Arab world wanted was "a smaller Israel", and his devotion to wacky and economically/strategically illiterate visions of "energy independence". Haven't read any of his stuff in years, and so far it's worked for me. |
| Posted by: Verlaine 2009-03-12 00:26 |