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We should not 'stay the course'

Full Speed to Port!

Posted: November 18, 2008 8:40 p.m.
Updated: November 19, 2008 4:55 a.m.
 

Bush's recent speech to the G20 was mostly a plea to stay the course and avoid the temptation of too much government intervention in the economy.

We've heard these words before, haven't we?

Those who have acquired wisdom know better. Bush avoids the simple fact that lack of government oversight is one of the main causes of this mess we're in. Working from a rigid ideology suppresses creativity that is needed, especially when confronted with a potentially cataclysmic situation.

I was born two years after the crash that developed into the Great Depression. What's going on now is the most financial jarring the economy has witnessed. No one can predict where this will go.

The stock market goes through all kinds of gyrations, giving everyone the willies. Stock owners look anxiously for the bottom of the market.

Many thought they found it, bought in and have now unfortunately incurred further losses.

It may be years before they recover their positions. There is no doubt in my mind that all of us will recover. The question is "when?"

We need to dig the tunnel before we can see the light at the end of it. There will be a lot of pain. There already is.

Communism failed because individuals were not free to accumulate wealth. Self-interest was not available as an alternative to communes. Slothfulness reigned.

Our situation is the reverse. It is obvious the role that unbridled greed has played in this debacle stains capitalism.

Milton Friedman, who won a Noble Prize for his financial theories, was totally against government intervention in the private sector.

He recently stated that he was wrong to trust that the market would correct itself guided by self-interest.

What's happening at this very hour refutes his long-held theories treasured by fiscal conservatives.

The question now is how do we make inroads into these economic problems and solve them?

One principle to be guided by is that human beings are not about to change. Another principle that will prevail is: Wall Street is where the money is, and it isn't going to suddenly take on the characteristics of Santa Claus. It will win out no matter what. And it may have to.

That's where the basic wound is, and that's where it needs to be healed. Parallel attention has to be given to the mortgage foreclosure problem.

Congress is conflicted on the issue of where the major emphasis needs to be: Main Street or Wall Street. From a political viewpoint, members of Congress are hearing a lot from their constituencies, and if they want to be reelected they had better listen up.

We must not consider this a politically impossible problem. It must be solved, and people need to see something positive happening soon.

My other premise that needs to be considered is that if there was ever a time to allow the rise of the national debt, it is now. It's going to take strong medicine to cure the cold so it doesn't become pneumonia.

One thing that created the current problem was Bush's strategy of charging everything to the Chinese and others. That did bring prosperity, but at what cost?

The economy has taken a flip-flop. The rules of engagement must change.

It was the money the government spent on war materials for World War II that employed millions and put an end to the Great Depression.

Prior to the war, the economy began to improve with the creation of the Works Progress Administration, the Public Works Administration and the Civilian Conservation Corp.

They did everything from filling potholes to building the Pasadena 110 Freeway. This time we may be able to have the same effect by modernizing the country's infrastructure.

We need to be patient. It will be a while before the economy corrects itself. Again, we have to drill the tunnel before we can see the light at the end of it. It's time to be creative. It's not a time to stay the course.

Phil Rizzo is a Santa Clarita resident. His column reflects his own views, not necessarily those of The Signal. "Full Speed to Port!" appears Wednesdays in The Signal.

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