Letter to the Editor of the Westfield Republican,
Our economy’s purpose, of making goods and services to serve us better, longer and cheaper to improve our quality of life while assuring technological progress, has been diverted to profit making and failure. It confirms the warning of “The Sorcerer’s Apprentice” in which the apprentice discovers how to use a broom to do his water carrying, but cannot stop the broom to prevent a disastrous flood.
The chronology of our financial failure is well documented in the book “All the Devils Are here” and the movie “Inside Job” so there is no mystery, except to those who have not read the book or seen the movie. These apprentices, acting as sorcerers, failed to foresee that the profitability of risky housing loans would turn to losses when the housing bubble burst. About the same time, financiers, freed in 1999 from 60 years of Glass Segall Act restrictions, needed financial back-up for their very profitable, but risky, financial ventures in derivatives. Of course, banks were very happy to sell them credit card and real-estate debt bundled as collateralized debt obligations, or CDOs. When the housing market tanked, the discovery that the CDOs contained bad — toxic — debt rendered them inadequate to stop the hemorrhaging of the trillion dollar derivatives market.
Now we are faced with the need to cut public spending, increase revenue and energize our economy. For the past 30 years, the working and middle classes have been getting poorer while the wealthy have been getting richer while enjoying protections from making further contribution to our financial recovery, protections established because of the false idea that the wealthy are the sustaining investors in our economy. But our unemployment and lackluster investments in research, education and innovation prove those protections to be fruitless. Our working and middle classes have been denied the financial means, education and employment opportunities to perform as the main engine of our economy.
With common resolve, our President and Congress must ignore political ideologies and face the fact that to restore the health of our economy they must work together to increase the earning power, education and employment opportunities of our working and middle classes. Only when our government has intelligently and wisely progressed toward a healthy domestic market and balance of foreign trade will we have the ability “to promote the general welfare” as directed by the Preamble of our Constitution, which Congress has sworn to protect and defend.
David R. Correll