By Eleanor Haas
Yes, this is a major inflection point, a revolutionary change
from one economy to another. Ever the
optimist, I see radical change, not disaster!
And radical change always means opportunity to the entrepreneur and
innovator. This all seems to me to have
been inevitable. We could not possibly
continue down the mad, mad, mad path of ever more complex and deceptive
derivatives and spiraling debt. Nor
could we continue down the road of government to the rescue. That’s just not the American way.
No, we are not entering another Great Depression – thousands
upon thousands of unemployed men – and today, women as well – standing in line
for food handouts.
But we are certainly in a crisis of uncertainty. Banks aren’t lending at the moment, and
properly managed debt is fundamental to all businesses. So now what?
Bankruptcy for those with overleveraged financials. Is that such a bad thing? It’s the normal way of the world. It doesn’t mean the company dies. It just means the owners lose their
investment, and creditors take over. It
doesn’t mean everyone loses their jobs.
It just means employees may have some new bosses.
How many companies will fail?
Given the failed bailout amount of $700 billion, a lot. But is it better for that amount to come out
of the pockets of those responsible for overleveraging or out of the pockets of
taxpayers who had nothing to do with it?
The bailout bill was a bad, bad idea if you believe in the free
enterprise system. It was a terrible
idea if you believe in personal responsibility and accountability.
CNN just published a point of view that happens to agree with mine by someone eminently qualified on the subject: Jeffrey Miron, a senior lecturer in economics in Harvard. Here's what he has to say:
What do you think?