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Will the True Economists Step
Forward…A Crisis is Afoot!


As I began writing this month’s blog, I was amazed at the number of potential topics based upon the national, state and local political and economic climate. My first thought was to continue the three-part series commenced in last month’s Paine Corner regarding revamping our state government. However, in light of the economic events of the past few weeks, it is imperative to discuss this more pertinent matter which impacts not only Delawareans but all Americans.  

As we approach the finish line in a very (and I mean very) long election cycle, it seems that the nation has fallen victim to a financial calamity based upon speculation by profit-seeking Wall Street banks and financial institutions. For some strange reason, it doesn’t seem comforting to hear our candidates for president and vice president cast blame on the policies of each other’s political parties and/or predecessors. The approach taken by our national political candidates seemingly has resulted in additional turmoil within our nation’s financial markets. While some of my colleagues tasked with analyzing and commenting on the actions of candidates may admire these tactics, I am deeply concerned that our economic policies are being dictated and guided by political currents.

Because our government has a crucial role in times of national crisis, it is essential that those tasked with governing assure the public that they are conferring with or appointing the men and women who have the best credentials to address the problems facing us. As evidenced by our government’s response to crisis during the troublesome days of Hurricane Katrina, there is a time when political rhetoric must step aside and effective governance must return to center stage. With our financial markets in calamity, such a time is upon us.

While I respect the experience of Senators Obama, McCain and Biden and Gov. Palin, the current state of our economy is not a political matter that can be discussed and resolved during the crucial days of a highly charged campaign. The very fundamentals of our capital markets are being undermined in the streets lining Wall Street and the other financial capitals throughout the globe. Our government’s response should not only be sound and resolute, but it should also be guided by the principles that steered this country into an age of economic prosperity during the latter half of the 20th century.

What does this mean for the average Delawarean? It means that we must encourage our national, state and local elected officials to accept responsibility for the failings of our current system and adopt appropriate safeguards to limit the probability that our markets will return to the current state of affairs. In a democratic society, the “people” have an inherent duty to call upon their leadership to restore order and domestic tranquility. Instead of encouraging our politicians to criticize (and pontificate on) how we arrived at the status quo, it is more prudent to spend our resources (including time) determining an appropriate course to navigate our national economic ship back to safe waters. Though it would be inappropriate for me to offer recommendations to address the current financial crisis, as such recommendations would undermine the very argument presented here, I will offer one non-controversial step aimed at moving our nation in the right direction.

Quite simply, our government should create a national bipartisan commission to address our nation’s current financial crisis. This bipartisan commission, similar to the 9/11 commission, should be tasked with providing substantive recommendations to our lawmakers on the national, state and local levels. This bipartisan commission should not be peppered with lobbyists and those tied to the financial industry; rather, this commission should be filled with individuals having knowledge and expertise of the financial markets and macroeconomic principles.

In other words, this commission should be comprised of the nation’s leading economists, not politicians seeking to pacify the short-term interests of their constituents at the risk of jeopardizing the long-term interests of the nation. While I am normally not an advocate of commissions, as I believe commissions are usually created as a means to avoid responsibility by those elected by the people to make tough decisions, the use of a commission in this circumstance is indeed appropriate, because an independent body must be appointed to represent the long-term interests of the nation with the consent of the people governed. This independent body should be given sufficient time and resources to not only study the underlying root of the problems plaguing our financial markets, but also have ample opportunity to evaluate proposed solutions without rushing to meet an arbitrary deadline. Even though many (including, but not limited to, our current Federal Reserve chairman) argue that time is not on our side and without an immediate financial bailout plan, our nation will suffer greatly, we must heed the warnings of past generations of Americans (including our founding fathers) that acting hastily in times of crisis may inflict more harm than good. Though we must act promptly to resolve this crisis, we should not hit the panic button, because the stakes are indeed high and the financial livelihood of many Americans is at stake. A wrong move could be in fact our final move.

So, my fellow Delawareans, do not be swayed by the political rhetoric of today’s campaign environment in the midst of an economic crisis; rather, encourage our leaders to adopt a long-term view in resolving a problem that jeopardizes the ability of our nation to survive. Remember, throughout the course of history, great empires have often collapsed at the hands of an empty treasury, not at the end of the sword. It is the job of our leaders to not repeat this failure.

After all, common sense must prevail.


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