When Change Won’t Occur

In one of my first posts, I spoke about change and how people and companies handle it.  We can see now that a vast majority of the people want the status quo to change but they are afraid that it simply won’t.  The people who didn’t vote for Obama seem to have forgotten the recession was a long time in coming, that it was his fault.  His supporters blame him for the fact that he hasn’t lived up to their ideological standard.  Everybody is expecting change, in the economy, in politics and it appears it may not show up anytime soon.

Now loom darker clouds on the horizon-the dread double dip recession (key thunder-clap and spooky pipe organ music).  I don’t agree.  I don’t know if it could be called optimism or pessimism, but tend to agree with Larry Doyle’s assessment.  We can’t be entering a double dip because we haven’t really come out of the first phase of the recession.

If I had been Obama back in the fall of ’08 when everything was falling like a runaway elevator, I would have told McCain “You can have this term, I’ll see you in 2012.”  I don’t think it really mattered who was president over the past three years.  I do think it could have been much worse, but I don’t think anybody could have done anything to bring us out of our current miasma.

The only people who have come out ahead in this situation are the people who caused this mess in the first place.

In 2007, I was looking at this little house.  It had a fantastic yard.  One of the times I stopped by the owner and another guy was there.  He happened to be from Country Wide Financial.  We started talking and he mentioned that he could get me a loan no matter what my credit was like.  He threw out some numbers the lowest of which was about $75 under what I brought in for a month’s wages.  He said it didn’t matter what I made, that he could fudge some of the numbers on the application.  In a year I could refinance to a lower rate.  It’s company practice we do it all the time.  I may not be smart, but I’m no fool.  I didn’t take the house.

It was soon after that episode, I heard about another kind of loan, the NInJA.  It means No Income, Job or Assets.  Really???  And the intelligentsia that resides in boardrooms across the nation thought this was a great idea?  Like I said, we didn’t make this mess overnight, and I think anyone who thinks we could get out of it in under a decade is either fooling themselves or is trying to sell you something.

The whole system has become so convoluted with the evolution of security backed mortgages and the growth of derivatives that it is near impossible to figure out exactly who holds the loan itself.  It isn’t the bank you borrowed the money from, even if you do write them a check every month, they just take their cut and then pass it on.  This is why the system was so rotten.  Everybody was just concerned about their piece of the pie.  The mortgage brokers didn’t care if the client couldn’t keep up the payments.  His check would have already been cut.  And this just starts the tangled plate of pasta the system had become.  At the other end of it, you have the derivative brokers who don’t deal in the securities themselves, but whether they will rise or fall.  It is much like playing craps when you bet the roller will either make his point or not.  Guess what?  They didn’t.

Fast forward two years and no one seems to understand why things haven’t gotten better, why the recovery is well on its way to happy-fun-times again.  I really don’t see things changing within the next year so I expect Obama will be a one term president.  This will be too bad only in the sense that Republicans have been calling for reduced regulations on business as their method to spur the economy.  Once again, forgetfulness seems to run rampant.  Don’t they remember it was the loosening of regulations that got us into this mess in the first place?  That’s alright.  Twenty years from now they can look back and find this was the cause for the next big economic disaster.

I myself thought that it would take about a decade to recover from this mess.  So, I guess there will be a one-term republican president after Obama leaves the white house.  With the rapidity with which we are bombarded by the next-greatest-thing, we have become used to change at a quick pace.  Now many Americans can’t understand why things aren’t better.  Get used to disappointment.

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