Tuesday, August 23, 2011
Individuals Taking Charge
Beyond malicious bankers and politicians, we all need to look hard in the mirror to realize the full extent of blame for the 2008 financial crisis. For decades now, the United States has been losing its sense of risk and return.
Today, most people believe simply that the economic system will heal itself and things will get better. In times past, folks distrusted system solutions as infringements on personal freedom, and endeavored to take direct control of their own livelihoods.
Entitlement programs such as Social Security and Medicare have accelerated this moral shift from responsibility to dependency, and, at the same time, skewered financial judgment. Had consumers possessed better acumen it's unlikely they would have closed their eyes to downside risk to the extent they did throughout the housing boom.
The United States now confronts the difficult task of rediscovering and affirming individual responsibility. Failure to do so damages the nation's future competitiveness, especially against China, India and other emerging countries and their brands of capitalism and democracy.
We can begin by putting consumers more in control of health care, breaking apart massive concentrations of capital (institutions, for example, that are too-big-to-fail), and reforming the tax code to emphasize long-term investment and business building.
The fact that we can no longer afford top-down measures provides some hope that the shift away from dependency will begin sooner than later.
Read "A Deeper Problem in the Credit Crisis" here.