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more pie than our government has baked.

The answer is not to wait in line until the government bakes more pies, or takes pies from those who have pies, but, rather, to seek our own fruit, roll our own dough, and bake our own pies.

So how does that relate to the financial sector of the economy? The problem the government faces is that it has provided incentives to banks and businesses to provide credit to keep the economy growing in the form of guarantees. Rather than providing oversight into how these guarantees were being utilized, the government was complacently content watching numbers roll in that indicated the incentives were working. In fact, banks and businesses were falsifying applications to circumvent prudent underwriting standards, and were rewriting loans on which consumers were on the verge of default to make it appear that the consumer could afford the loan. Consumers bought into this by running up their credit cards, and then refinancing those cards into new mortgage loans and running their credit cards up again.

Faced with the realization that free market principles were going to collapse both the stock market and banks, Ben Bernanke and his marionette known as George Bush pushed for increased liquidity (producing money that does not exist) in order to keep interest rates artificially low so consumers would keep consuming more pie than actually existed. Those policies kept the natural free market cycle of money moving from the market into banks in the form of savings accounts from occuring, which is a natural recessionary cycle. The consequence is that we have converted a few natural recessionary cycles into an impending long-term, full-blown depression. Call me an optimist, but I believe that America can overcome this depression without tremendous loss of life through World War III.

If necessity is truly the mother of invention, then it is necessary that we, as consumers and voters, understand that we cannot turn nothing into something. We must, instead, take something and turn it into something better through our own education, labor, and creativity. We have no more land we can steal from Indians for expansion, and the resources we take through interventionist policies for our own reckless consumption will only lead to the aforementioned war.

We must recognize that our own reckless consumption and irresponsible investments have caused the problems we now face. We must tighten our belts and reduce that reckless consumption, whether it is in the form of turning off lights in rooms that are not used, or continuing to work past the time we intended to retire on funds that were not really there except in the world of manipulated bookkeeping. We must use our incomes to repay our debts, and to purchase products that help keep our neighbors employed with the hope that they do the same. We must rebuild our retirement incomes and assets through hard work and intelligent planning. We can no longer accept that errant math works provided fifty-one percent of the people believe it does.

The best alternative to fix the problems in the US financial sector is to allow the US financial sector to heal itself. We have the equivalent of broken arms. Bandaids will not heal us, nor will the amputated arms of others be of much use to us in the long run.

If we do not sling our own wounds and allow our broken arms to heal, then my optimism for resolution without World War III will merely be more pie in the sky.

Learn more about this author, Tom Koecke.
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