A stellar rebound in equities in the last year of the decade has many wondering what else we may have lost besides ten years of no gains in the stock market.
The Lost Decade: After 9/11/01 & 9/18/08 still business as usual.
Although stocks posted amazing gains in 2009, it has left most with an empty feeling as the decade overall was flat in US equities. The politics though fiery and hopeful at one euphoric moment in 2008 were also empty.
It appears that in hindsight the last decade was a wash for America. Americans marched through most of the last ten years mad at a President who recovered an economy that had been dealt its largest blow ever and kept us from being attacked for a second time during his watch from an enemy that is so dangerous the western world does not even comprehend it for the most part. Over 10% of the US economy was in the World Trade Centers...putting that into perspective, California equals 20% of the US economy.
The attack on the US on 9/11/01 was a fantastic opportunity for America to wake up and create an economy that does not instill anger by impoverishing so many. The opportunity to get off foreign oil and create a jobs creating energy policy after the attack was truly there...the President could have ordered Americans to do anything at that point and we would have done it. Instead we were told to go shop.
Then we saw opportunity number two: the financial meltdown of 9/18/08. This was not only another chance to fix the energy crises that had blown up in our face in the form of 147 dollar barrel oil earlier that summer, a price and bubble that President Bush popped by lifting the ban on off shore drilling; it was also an opportunity to fix the problem with the financial industry and most industry for that matter: the lobbyist.
The Tragedy: A Change We Wanted to Believe In
It is no surprise to about 57 million of us that the new President has seen his approval ratings fall the fastest and hardest ever since records like that started being kept.
Change we can believe in appears to mean making everyone pay for a few folks mistakes. It has to be admitted that this is a valid prescription for cleaning up messes most of the time. But when it targets the limbs and not the roots it's not going to work. It appears Washington thinks the answer to getting back the rest of the TARP funds is to tax big banks; did it occur to anyone that some of those banks may have paid back what they borrowed? Would it be fair to make them pay again for others who received bailout funds but can never pay it back?
This example of change that has come in the form of proposals for bank reforms, reforms that if implemented will benefit the big banks and their stock holders the most such as Goldman Sachs and JP Morgan as they will by law be required to spin off their most unprofitable operations: the consumer instruments, and thus make the share prices of those companies much better valued and thus more attractive to investors. For example if you look at JP Morgan's stock price, it has traded at the same value for the last decade or so precisely because their value is pretty much capped, there is no growth in the consumer credit instruments that make up a large part of their operations. This is something most of the banks share in common, so its is no wonder that so called bank reform coming from the lobbies of Washington would end up benefiting the banks the most and not the consumer.
To think that these kinds of measures and policies will not be passed onto the consumer is naive. What this will do is make it harder for small retail traders to get into the market because of higher fees. Not to say, as this article written by fellow Twitter user PumPuiMonkey writes, it is not already getting increasingly difficult. I do realize that some people think that traders such as my self are next thing to nefarious and should not be allowed day trade in the first place, but that aside; this policy only serves to limit opportunity for people looking for a chance to get ahead by trading and investing. Whether the opportunity is safe for them is not something for anyone else to decide really, especially for individuals...lets be real: you're not going to be forced to bail me out of a bad trade or investment. A more in depth look at this discussion and how it has affected me personally can be found by reading the No More Hedging
thread I made contributions to in an attempt to share my perspective on the subject.
Real change would have been doing something about the stranglehold Wall Street has on Main Street via the lobbies. But then that would not have fulfilled any campaign promises, and would only have assured that a derelict electorate is delivered some other more cooperative candidate the next time around.
Can't miss the chance to hound again, what a change it would have been to come up with a sound energy policy.
The Legacy: Less Opportunity and the Inheritance of Debt
It looks like we have a legacy of debt, a retreating free market and a democracy with increasing transparency but infected from the enemy within that is always tied to some special interest spinning the progress being made as a bad idea from the opposite political party; while all the time nothing of real meaning is ever addressed or even discussed. Worse yet, when something is accomplished it is so burdened with special interests and buy offs that it just becomes another debt increasing monstrosity that this country and its people have had enough of already.
After the attacks in 2001 the powers of the government were greatly expanded to protect against more threats, however I happen to think that our freedoms were not so much infringed upon as they were clarified. After all, our government had been doing these things forever already. Only it was in secret and sometimes manifested itself in National shame such as the Japanese internment camps of WW II.
After the financial collapse of 2008, for many the jury was out on capitalism. Almost like a deer in the headlights, Greenspan in testimony to Congress all but shattered many peoples faith in the free market. I never thought as highly of Greenspan as many in the first place, sure he is a genius...but every genius has a blind spot. He was an instrument of the lobbies like all of the heads of Washington so therefore I don't think he missed anything. Every aspect of this economy has been carefully manipulated for generations already. Over time it has been technology that keeps us ahead of total ignorance and enslavement by the educated elite who think most of us are too dumb to make qualified decisions for ourselves.
The latest round of lost opportunity comes in the form of the President going on a somewhat perplexing campaign like stump into the heartland where he was supposed to be going to give the people hope when it comes to the dire job market. Instead of doing anything close to what so many see as our only chance to get out of this mess: announcing a jobs creating energy policy; the President promised to fight. I just am still unsure exactly what he will fight. The lobbies and special interests that are really holding things back? We can be sure that will not be the case. The alternative fight must be politics and Filibuster gridlock as usual. We have already got a glimpse of what that will look like and how the market and therefore by default the economy will fare under a return to that kind of partisan bickering and gridlock with the asinine Senate protests over re-nominating Ben Bernanke as head of the Federal Reserve. This is a fine example of how partisanship wrecks everything. If we want to fire Ben Bernanke out of some moral duty, then we have the duty to fire the entire government starting with the President who also took money from the lobbies who engineered this crisis as well.
Don't misunderstand me; we do need to fire everyone and I hope we do in 2010 and 2012. The biggest problem is even the new faces will be in the pockets of lobbies so change will still take more time before we can figure out who will and will not stick to the principles the people want like lowering debt, creating jobs and making regulations work instead of creating more government and more regulations.
The Hope: Americas Resiliency
One thing I have learned is that not even a writer can imagine what America might do or accomplish next. The nature of our democracy is largely misunderstood by the world and it is far more conservative than any other regime on the globe or in history. This is one reason why we have such an incredibly strong market. It is true that part of our strength comes from geographic luck and resource...but there are other regions of the planet that if they were more like the American system would be much more resourceful than they currently are no doubt.
China is a good example of this; they have now become the second largest economy not by rejecting western models but by embracing them. The difference is the corrupt nature of their system allows them to exploit everything without any concern for the consequences because there are none since everything is run by the State. This has pretty much gamed the entire theater of Chinas entry onto the global economy. It is no wonder they have progressed too far to fast, you could say they have cheated in a way. It all spells trouble for the global communities future, their policy on many fronts not the least of which is currency value and how most recently monetary rate policy is hurting the global recovery in some analysts views.
It's not these particular policy issues that bother me as much as the other more human and environmental policies they have that have no regard to human rights or the environment that create an unlevel playing field for the market and most importantly hurt people.
So considering America and the western economy has no choice but to do things correctly or face certain doom, we will produce a sustainable and innovative economy that will end up being the model for the 21st Century to the entire world as we have been since we were born over two hundred years ago.