Problem Solving in America: The Seven Hundred Billion Dollar Solution

The Seven Hundred Billion Dollar Solution

First, what is the problem?

The Bush Administration, via Treasury Secretary Paulson, has announced that the US Government needs to approve immediately the expenditure of $700,000,000,000.00 to bail out Wall Street. At first this money was to be under control of Secretary Paulson exclusively, but Congressional backlash has caused the demand to soften and allow some controls, limits in Executive Pay, etc. At this point, it looks like Congress will go along with the $700 Billion Solution, once they, as usual, nibble around the edges of the proposed solution.

The question that hasn’t been addressed is the most important one: What problem does this actually solve? In listening to Bush’s speech, I heard him mention that this would probably avoid a recession, and if we don’t do this, we might go into recession, and the recession will probably be worse than spending the $700 Billion now.

Not to get into too much politics, but I think Congress needs to step back and take a logical, sensible problem solving approach to this. Starting with a solution, simply put, is bad problem solving. This solution implies that the problem is that Wall Street needs a bailout. That problem may be obvious to people like Paulson and, from what I heard, one of Bush’s top advisors, who both came from Goldman Sachs, a Wall Street firm. May I suggest that when your world-perspective is Wall Street, then your solution will tend to be centered around Wall Street.

So, what is the problem? Tight credit? Looming Recession? Too many foreclosures? Congress has been working on the foreclosure issue—note I didn’t call it a problem, since personally, I think that people who speculated in the housing market expecting prices to continue to rise so they could sell or re-finance and take the profit immediately should suffer financially. The housing market has always had highs followed by corrections of lower prices; it took my home many years to go back up to the price I paid at the top of the market in 1990. Luckily for me, I was buying a house, not making an investment. As for mortgages, Fannie Mae and Freddie Mac were created to buy up [all the bad] mortgages, and the Government already bailed them out.

So, what can you, the reader do? My recommendation is that you encourage your Congress person and Senators to seek the real problems and find real, workable solutions to those problems, rather than just throw money at some alleged problem.

Don Simpson

September 25, 2008

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I learn from the silence, to learn from intolerance to tolerance, from this cruel kindness, but strangely enough, I am ungrateful to these teachers.Do you think so?

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