What was it that got us into this recession, anyhow? Is it the banks' fault? Is it the consumers fault? Is it the government's fault?
Yes, yes, and yes!
What got us into this recession is greed - not capitalism. We cannot blame 'the market' for the recession, as markets do not act on their own. People act within rules of the market. Thus, people - bankers, consumers, creditors, debtors - not the market, got us into the predicament we are in. People bought houses they could not afford; banks promised loans they could not support to people that should not have gotten loans; people bought too many things on credit and let their finances get out of control; banks let them do this.
Greed! Not capitalism! These two things can go toghether, but are not by any means synonyms.
Captalism functions on the principle of a profit motive, and that may lead some to think that capitalism bases itself on greed. But one can have profit as their motive without overextending themselves, just as consumers may be motivated by money and material pleasures while keeping these desires in check. The problem is NOT that banks and consumers were motivated by material gain, but that they let this cloud their judgment; they ceased thinking about the long tern (can I afford to make this loan or buy this Hummer?) and did without thinking.
My hope is that the era of frivolous spending is over. (That is a quote from our frivolously spending president for which I no longer have the link.) What many - including Obama - don't realize is that recessions are the economy's natural way of making us take stock. When spending gets out of control and people are spending more than the economy can monetarily support, recessions slam on the breaks by penalizing irresponsibility; loans must be defaulted on, business gets slower, jobs get cut, and prices and spending go back to a nice even keel.
What worries me, though, is that our very spend-hungry president is working to ensure that the good times artificially keep rolling! He is working to make sure that loans get forgiven or bailed out, jobs get artificially reproduced, and the irresponsible are saved from consequences of irresponsibility.
This will not fix the problem (as any economist worth anything will tell you), but it just postpones the inevitable. If a recession would naturally occur because we are spending out of control, the best way to curb it is make it so that spending cannot remain out of control. Our president and congress, though, are redistributing wealth precisely so that it CAN remain out of control. instead of making it so that those who have no business buying a four bedroom house can no longer pay their mortgage, the president will just make everyone pay four the four bedroom house. Instead of making sure that those who bought too much on credit must go into bakruptcy, he will make sure that we all pay for her things. Instead of ensuring that mismanaged banks be eliminated by forcing them to close under economic pressure, we are all going to pay for them to misrun their businesses.
My fear is that we will not have learned our hard-won lesson about greed's ability to tank an economy. My fear is that our leaders will protect the guilty (banks, greedy consumers) by punishing the innocent (those who don't need bailouts will pay for those who do.) My fear is that, in the process, all of this recession business will be for naught, as no one will have learned anything at all.