Last week was quite a debacle for Wall Street. Even with the bailout money approved, the whole world seems to be rocking back and forth in this financial storm.

It’s an exciting time, no matter what what your funds are doing. Economists are planning careers based on the last couple of weeks, and new courses in economics will be forthcoming from recent events. Politicians from both parties are cursing (Republicans) and cheering (Democrats) from the tide caused by the upheaval on Wall Street.

The only ones that aren’t happy are you and I. We’re having to live through this mess. As hard as it is to get by, it’s still something that has focused us together as a country. We’re feeling the pain of job shortages together, we’re paying the rising prices of gas and food together.

Government and intervention

I was watching an episode of ‘20/20′ recently, and they had a special talking about the economic crisis and how government actions are effecting the crisis. They weren’t too keen on any government intervention having a helpful effect. In fact, the main focus of one of the segments seemed to be about getting the government to be ‘hands off’ with the situation.

Now while I wouldn’t go that far, I tend to agree that pouring trillions (with a “T”) of dollars into the system to try to stabilize it quickly is an iffy proposition at best. I do think that this is something that we need to do to just ‘get’ through as quickly as possible.

However, maybe a few banks closing, and lots of jobs being lost isn’t a good thing, but a necessary thing. Will it be better to stretch this crisis out to decades, similar to what happened with Japan in the early ’90s, or would it be better to take our lumps all at once, and just deal with what comes without intervention?

I tend toward the latter. The only thing that doesn’t totally convince me towards that view is the way the banking system is hoarding cash, and tightening credit. Money movement is the blood of the system, but if banks keep all that flow within themselves, other businesses dry up and blow away, where in normal times they’d be thriving and healthy.

The same people that have caused these problems; the predatory lending, the inexcusable taking of HUGE amounts of risk, and the near-criminal mismanagement of the system. These people are the same ones still in control, and are causing the problem to continue!

Banks are so scared now of not having liquidity, that they’re willing to screw every other business that depends on them, until they feel ’safe’ again. That’s irresponsible to the system, and to the businesses that have long-standing relationships with them.  In a time when it should be a ‘work together’ atmosphere, the lending institutions have a ‘me-first’ attitude.

Can’t get Blood from a Stone

Admittedly, you can’t ‘force’ a bank to lend to anyone. They’ve been burnt by making bad loans, now they’re swinging the other direction and making virtually no loans. Neither position is helpful, and until they lose some of the fear, and start moving back toward the center, we’re never going to be able to recover from the situation we’re in.

Maybe the partial nationalization of some of the banks will allow the government to ‘enforce’ lending, just enough to un-jam  the system. It would be the first good thing government has done in this situation.

I won’t be holding my breath though.

Do you think there’s anything government is doing that will help the situation? Leave us a comment and let us know!