Robert L. Terrell

However much I try to suppress it, I can’t resist the strong impression that the United States is courting economic disaster.  This is due to several factors, including the global financial meltdown, the precipitous decline of the stock market, the escalating mortgage crisis, rising unemployment and collapsing real estate values.

 Taken together, these developments suggest that the nation is undergoing an economic transition of epochal proportions. Signs that economic collapse of a magnitude that hasn’t taken place in living memory are apparent in virtually every sector of society.   Whether from friends, relatives, neighbors and professional colleagues, the news is much the same.  The economic floor is collapsing under them, and they are deeply concerned about the future.  Moreover, each day’s journalistic reports are filled with corroborating information indicating that the problem extends across the nation.

 My growing sense that the U.S. is particularly vulnerable to economic catastrophe is largely based on my growing conviction that the people formally in charge of the nation’s financial affairs are pretty much clueless as to actions which need to be taken in order to establish a viable economic equilibrium.  The best evidence that this is the case is the confused performance of President Bush’s economic team during the past few weeks.

 First they demanded a $700 bailout for Wall Street.   Given the panic which dominated Wall Street, Main Street and Washington D.C. at the time, the bailout was approved with little or not clear explanation of how the money would be used, and how it might specifically be expected to eliminate the escalating financial crisis. 

 Given the haphazard manner in which the money was allocated, none of us should have been greatly surprised when the plan for it allegedly became obsolete before most of it was disbursed.  The reason: the financial crisis had metastasized, and those responsible for dealing with the situation were forced to pursue a different strategy.

 The key point I want to make here is that the crises in which we are entrapped extends beyond the professional competence of those responsible for dealing with them.  And this includes the rapidly expanding assortment of pedigreed economists being assembled by President-elect Barack Obama.

 In past years, several of them have been strong advocates of the deregulatory policies substantially responsible for the current financial crisis.  It is possible that they possess different biases at this point, but I suspect that most of those old dogs are not capable of making the conceptual adjustments necessary to deal with the current crisis more competently than their thoroughly discredited Bush administration counterparts.

 Sooner or later, and probably later, those responsible for the nation’s affairs will need to understand that economists are generally incapable of conceptualizing in the necessary manner.  This is due to the fact that the precarious economic circumstances in which we are enmeshed require insights grounded in matters that few economists ever examine. 

 What we need are contributions from people who possess superior philosophical insights regarding the prerequisites for normal, healthy, balanced societies.  I haven’t received any indication that those in charge of the in-coming administration in Washington, D.C. understand this.  Until they do, the current economic crises will probably continue to deteriorate.

In the interim, we have an economic system that is essentially a dog-eat dog economic system–dominated by economic werewolves or the sort-receiving succor in the form of hundreds of billions of government bailout dollars.   As long as this continues to be the case, those who are prudent will buckle down, and prepare to survive—as best they can–the worst economic crisis in living memory.