The Waiting Game

The Uncommon Wife has left The Common Man all alone with The Boy for the rest of the week, while she flies out to NYC to visit The Brother-in-law. Faced with complete, utter freedom from womanly ways, The Common Man tried to figure out how to have the manliest time possible and to impart manly wisdom to The Boy before he turns two next week. As is typical, The Common Man tired of thinking around the 30 second mark, and decided instead to take the boy back to Minnesota to, again, visit his grandparents.



Like The Common Man, it seems as though the United States Congress does not want to think long and hard about the problems facing the nation's economy these days. Today, before House Committees, Treasury Secretary Harry Paulson and FED Chairman Ben Bernanke tried to quiet panicky lawmakers who claimed that the banking bailout plan, approved in September, was not working. Since originally receiving the ok to use government funds to buy up at-risk mortgage debt, Paulson has shifted strategies and used the money to infuse $158 billion in cash into troubled banks. Paulson defended his strategy, saying, "When the facts changed and the circumstances [surrounding the financial crisis] changed, we changed the strategy. We didn't implement a flawed strategy. We implemented a strategy that worked." Yet critics are still worried that Paulson's strategy has not yet freed the wheels of the frozen credit market.

While lawmakers are right to closely watch how Americans' money is being spent by Paulson, The Common Man again hopes (once again) that everyone can just take a deep breath here. After all, how long did it take for this crisis to develop? Years, perhaps a decade or more. The pressure has been building for a long while for sure. To be up in arms because the proposed solution hasn't been an unparalleled success within two months is either a) impatient and moronic or b) blatantly opportunistic, using the crisis as a smokescreen to further shift blame for the meltdown onto an unpopular and ineffective lame-duck president who has next to no political capital at this point.

As for Paulson's apparent shift in strategy, The Common Man doesn't claim to be smart enough to know whether his new tactic will be a success or not. The Common Man is not an economist, nor does he have a lot of experience with macroeconomics (sorry Grandpa, only now does The Common Man see the folly of not taking that Econ course, as you suggested). But he does know that when financial systems are this unhealthy, like a patient recovering in ICU, they will take some time get back to normal. And lingering symptoms of whatever disease made them sick may be felt for some time, no matter how good the doctor treating it is. And given how slowly Congress can move and how rapidly the financial crisis may shift in composition and tenor, perhaps its best that Paulson have the flexibility to shift gears when he needs to, rather than waiting for approval to do so.

So sit back, America. Just hold off on the panic a little longer. The Common Man knows your portfolios are hurting (his is too). And he knows that there are still some tough times ahead. But for God's sake, don't shout blindly to the rafters that the roof is falling while Paulson works hard to prop it up. Show some restraint. Show some backbone. And show some manly fortitude. Wait and see what this this strategy can do before you come to bury it.

Finance and Freak Outs

The Common Man, like most of you, has been following the economic news in the wake of the recovery plan passed by Congress, signed by President Bush, and enacted by Treasury Secretary Henry Paulson. And like most of you, he's incredibly curious (and hopeful) to see whether it will work. After all, The Common Man would like to not have to ride the rails, eating beans from a can, grifting his way across the nation. Frankly, his grifting skills are in steep decline and he doesn't like beans all that much. Trains are cool though.

As he's checked back to CNN.com, he's been incredibly amused to follow the headlines associated with the bailout. Indeed, when stocks fell on Monday, CNN.com reported that investors had no confidence in the bailout plan. But on Tuesday, when the Dow rallied in the morning, the headline suggested something like the international economic relief plan had made investors confident in the solvency of their system. Indeed, whenever the stock market rises and falls, financial journalists seem to switch their narrative. If the market is up, the measures proposed by the FED are working; if the market is down, they aren't. Sometimes the narrative shifts a couple of times a day, as though everyone on Wall Street loses their shit at exactly the same time. (Currently, CNN.com is talking about a "Wall Street Whipsaw: Stocks turn mixed as investors consider recession talk, lower oil prices.")

Meanwhile, regular Americans are watching this rollercoaster and are getting nauseous and nervous. The volatility, not just of the market, but of the narrative makes it difficult to know who to trust and what exactly is happening. It's like re-reading a comic strip, but finding that the panels keep changing, and it's never how you remember it. It's disorienting and is promoting panic, and The Common Man can't help but think it's counterproductive.

Is it possible to separate the narrative of the Dow's rise and fall from the narrative of the economic recovery plan at this point? The Common Man doesn't know. The two are so intrinsically tied in America's mind right now that it will be incredibly difficult to parsel them out. Yet, The Common Man thinks that's absolutely necessary, to give the recovery plan the time it needs to work without constant speculation about whether it's working or not. Give the damn thing a couple of months, dammit before you pronounce, once and for all, how things are going. In the mean time, tell Americans how best to protect their assets and reassure them that, probably, things will eventually be ok again. Stop promoting the provoking the greatest fears of Americans who believe that a new depression is likely.

If recent history has taught The Common Man anything, its that you can't judge the effectiveness of a policy by the first few days after it's implemented. The Iraq War went great for a few weeks and everyone in Washington seemed to love No Child Left Behind when it was initially passed. Be calm, be reasoned, and let the recovery plan do it's job why don't you. Leave the editorializing for later. That goes for the media as well as for the individual.

Working the Bilge

The Common Man's longstanding position on the war in Iraq is a blanket "you break it, you buy it" policy. As a nation, the UnitedStates chose to elect George Bush in 2000 (please, The Common Man doesn't want to hear about Florida, regardless of how valid your complaints may or may not be. Rutherford B. Hayes won the 1876 election in the House of Representatives by promising to end Reconstruction. John Kennedy won in 1960 (in part) because of rampant voter fraud.) and to reelect him in 2004. He (and his advisers), using the authority the American people gave him, invaded Iraq in 2003. Anything that President Bush did or ordered done, any failure by the Commander-in-Chief is shared, in part, by the populace that elected him (and that chooses to live in a political system that elected him. And so, in essence, the Iraq folly can be traced back directly to the American voters, and they need to bear responsibility for that.

So, while The Common Man doesn't like the war and how that war impeded and impedes the U.S.'s ability to fight in Afghanistan, the U.S. has a moral commitment to maintain a significant presence in Iraq until that nation is secure enough to stand on its own, and not crumble from attacks from within and without. The U.S. broke down the system that held the country together, it has an obligation to stay there until a new framework will hold (and will guarantee freedoms for its citizens). Whoever is elected president, The Common Man feels confident that a stark, unfiltered, and realistic assessment of the Iraq situation with generals on the ground in that country will be the deciding factor as to what the U.S. role is from here on out. The desire to protect America's international integrity and reputation in future foreign relations and international actions will trump any and all campaign promises. So while it's good to have a plan to offer potential solutions, it's important that the candidates be flexible to the reality of Iraq and mindful of the commitments the U.S has made, and the responsibilities it bears.

When The Common Man tries to apply the same principle to the recently proposed mortgage bailout, he has mixed feelings. The Common Man strongly believes that individual entities need to endure the consequences for their actions. When you bet on red, and the roulette wheel stops on black, you shouldn't get to get your chips back just because you bet your rent check. Institutions should not be rewarded for their irresponsibility.



The Common Man is also struck by how angry the situation makes him, and how, impulsively, he wants to see these Wall Street types suffer for the mess they made. It's part of a collective schadenfreude that The Common Man is starting to see among normal Americans who just want to punish the guilty and feel better again about their country and their prospects. As though the collapse of a major financial institution and the layoff of all of its employees will somehow make their lives better. The Common Man definitely sympathizes with that viewpoint.

But does that mean that the U.S. should simply let these companies fail? Not necessarily. Think about this crisis from a father's perspective. When your child misbehaves, and engages in risky behavior, parents will often let their child suffer the consequences of their actions, if those consequences are minor. The Common Man, for instance, will allow The Boy to climb up on a footstool, or swing on the big kid swings, or climb the ladder to his treehouse. If he falls, he will be scared, and may have a bruise. He'll cry because he's not even two years old yet. But he'll learn. And The Common Man is there to make sure that nothing too serious befalls him and to catch him if it looks like he's in real danger.

However, just because The Common Man wants his son to learn a lesson about taking care and being thoughtful about his actions, doesn't mean The Common Man wants The Boy to run into the street or to ride his little car down the stairs or stick a paper clip in the light socket. That kind of behavior carries with it unacceptable risk of permanent, life-altering damage. Sure, if he survives he has learned a valuable lesson, but c'mon...

Anyway, when you look at the current bailout of mortgage market, try to look at it from a father's perspective. Yes, you want these companies to learn a valuable lesson about their actions. And you want them to never do something this stupid and risky again. But you (presumably) don't want them to wind up permanently disfigured or dead if their role in the larger economy is such that the economy is better off with them in it.

In that light, several of the proposals in the bailout package being offered by the federal government make sense. CEOs who condoned (or who stood by while others condoned) this behavior should not get to profit from their resignations. The companies themselves should not escape in better shape than they were in before they started these irresponsible lending practices. They should have to bear some of the losses, and should have to pay for the privilege of being bailed out. U.S. taxpayers should be on the hook for as little of the bailout as possible, and the government should be allowed to benefit from any future profit from these companies until its investment is paid off.

In America, it's a cliche to say that the punishment should fit the crime. But having a strong and meaningful punishment that will deter future bad behavior (the real goal of fatherly discipline) does not require the deaths of American financial institutions. Instead, the U.S. government needs to implement policies that force companies like Bear Stearns and AIG and Lehman Brothers to reap consequences for their actions and take responsibility for what they've done, while providing them a way forward into a better, more socially and economically responsible means of doing business, while continuing to provide the proper oversight and guidance that any good father would give his child. And it sounds as though that's what Congress is trying to do. The Common Man hopes so.