Remember the Saturday Night Live sketch with Will Farrell and Christopher Walken? Walken plays a famous record producer, and he keeps telling band member Farrell that he needs more cowbell. He can't get enough cowbell. "I've got a fever, and the only prescription is more cowbell!" It's truly hilarious, but for some reason it makes me think of the current situation, and the laughter turns to sobbing.
The answer to everything now seems to be more bailout. Based on comments I've read on this blog and other things I've heard around the office, I'd say we're well past the point of "bailout fatigue." Please, no more cowbell.
I watched the Frontline documentary this week, "Inside the Meltdown," and it reminded me of how we got onto this slippery slope. It started after the government bailed out Bear Stearns but didn't bail out Lehman Brothers. Treasury Secretary Paulson wanted to draw the line somewhere. Heavy government interventions went against everything he'd stood for up to that point. So he drew the line... and all hell broke loose.
Then, there was AIG. We had to bail them out, or more hell would break loose. Then, there was the $700 billion package. We had to pass that, or the world would end. Then, we had to bail out the carmakers or the whole economy would collapse. Then, we had to pass the stimulus package because "doing nothing" was not an option. Now, we need an aid plan for borrowers because we've given all this money to the lender side.
WHERE DOES THIS END? Will there ever come a point where we let the economy do some healing on its own?
I realize people need jobs. It's dire. Obviously, the government should play a role in the recovery. Wall Street had its chance and blew it. I get that. But I'm afraid we're forgetting how to draw lines. Paulson drew one, and it backfired. That doesn't mean every line we draw will wreak havoc. Frankly, I'd like see more results from what we've spent so far before we write any more checks.
Okay, enough from me. Here's some good reading material on this. First, a column in today's Seattle Post-Intelligencer about Doing Nothing versus Doing Something.
Harvard economist Greg Mankiw has a blog post on how we will know the stimulus package is actually working.
And finally, if you need a laugh, here's the SNL skit.