Just pondering here… my ability to articulate these thoughts in a clear and comprehensive way are lacking right now but bear with me – these are interesting things to consider..
Let’s talk about the current financial situation going on globally – particularly this ‘credit crisis’. Perhaps I am just too simple to understand the ‘complexities’ of the global financial markets and how credit is a fundamental component of it. But perhaps I do. Perhaps I do understand that credit is the grease that keeps the gears of our economy moving smoothly. That credit is THE way in which risk is spread out among all of the market participants. Perhaps it is the large banks and the Federal Reserve and our celebrity politicians who do not understand these complexities. Robert Reich, a former Secretary of Labor, is on to something in one of his recent posts where he asks the question ‘maybe too big to fail is just too big’.
What I find interesting even now is how banks continue to make poor decisions that only seem to aggravate the current situation. Only now are banks beginning to mobilize to keep families in their homes instead of putting them on the street. Where was the foresight? Now of course we will get excuses about how much red tape must be navigated in order to take those steps, but I consider them just that – excuses. Action requires only one real ingredient – a desire to make it so.
This ‘credit crisis’ is also a function of banks choosing to hide under a rock instead of taking a leadership role and managing the situation. They are choosing to hoard their cash and refusing to lend it out and keep those ‘gears’ turning. This morning I read another article showing banks’ counterproductive efforts, this time dealing with public transportation. Banks are using technical legal language in their financial dealings with mass transit companies to require lump sum repayments – hundreds of millions of dollars – within weeks!
It feels like we are all stuck in a canoe paddling furiously against a current that is taking us directly towards a deadly waterfall. The strongest and most capable paddlers are the banks, but unfortunately they are jumping ship en masse and forcing us to work ever harder.