The continuing talk of economic recovery points directly to the heart of our economic woes. Pundit after pundit, expert after expert cites the need to restore consumer confidence in order to get people buying again. The problem with this line of thinking is that it accepts that the U.S. consumer is the key to unlocking this mess. While this belief may be true in the short term, the real problem lies in the fact that our economic health and well being violates the very foundation of that old saying, "Don't put all your eggs in one basket."
What our economy needs is a diversification into sectors that do not primarily rest upon a single pillar for strength. In the past,our financial health rested upon many factors, several pillars, so that when one grew weak, the others helped buoy the load, which in turn resulted in a lessening of an impact upon our economy.
Now more than ever, we need to look at this current crisis as an opportunity to restore older, tried and true financial and economic bases so that we are never faced with such a crisis again.
First, we need to reward the banks and financial institutions that showed wisdom and resisted the temptation of fast, high-rate returns on risky loan and credit practices. Why in the world would we want to spend our economic rescue money on bad debt? That money will not be re-injected into the economy, but will instead be used to offset losses from the financial institutions' horrid business and investment practices. We should instead use that same money and reward those institutions that showed restraint and common sense. By doing this, we are making that money, all of it, immediately available to loosen the credit crisis that consumers, businesses, municipalities, and states now face. Let the banks and financial geniuses that brought us to this precipice fail, as any business that practices bad judgment ultimately does.
Second, we desperately need to invest in developing business services and products that have a world-wide appeal. America grew strong upon our ability to export, and this is one pillar of our economy that has been allowed to crumble. Key to this is identifying products and services that everyone in the world will buy, and the obvious choice is energy. If we focus government investment into developing and manufacturing alternative energy sources and alternative energy source equipment and expertise, we can assure that future generations will reap the benefit. The world acknowledges the need, and we cannot afford to miss this opportunity. Additionally, we have a great opportunity to retool our automotive industry to produce the cars and transportation vehicles that will pave the way to a reinvigorated economy. But we must have strong government oversight to make certain that our money is not wasted. Tying research and development into colleges and universities in exchange for broadened scholarship opportunities and lower tuition makes a tremendous amount of sense, and has the added benefit of assuring students of jobs in this new sector upon graduation. If we can spend millions upon millions of dollars in athletic scholarships, we sure as hell can do it for "technical athletes" as well.
And finally, we will have to bite the bullet and revamp our credit system. This will unfortunately result in less credit for lower-income households, but this is the way it should be. The days of non-government regulation are over. We're suffering for it now, but we have to have a sensible approach to credit, and not buy into the false sense of an economy based upon how much fake money people can spend to keep the profits of big business rolling in, as the end result is poorer households saddled with enormous credit burdens, while businesses and those that can afford to invest in them grow rich beyond measure, even when the economy crashes.
We can only hope that the new administration has the wisdom and insight to look to the future and invest our tax money wisely. If not, we are doomed to see history repeat itself.