I remember a time at the doctor’s office when he was getting ready to give me a shot. “This is going to sting a little,” he said and he was right. Now we’re watching cascading failures in the economy as GM and Chrysler are on life support and billions of dollars are printed to restore a broken credit system.
World Bank President Robert Zoellick calls the stimulus being injected into the economy a ‘sugar high’ that will result in a deeper depression on the other side. As a long time Coke addict (the drink, not the drug) I can attest that you don’t feel better when the sugar wears off.
Even our own John Husing, usually a parenial optomist, points to the next reset of Option ARM mortgages coming at the end of this year. The regulators and the bankers need to untie this knot quick, or we’ll all yearn for the good old days of last August’s crash.
This is not a cyclical change. Our economy is undergoing a profound structural change. On the other side of this, the economy, our country and how we live will look a lot different than it does today. Whether this is good or bad depends on how we react to it.
We are seeing people coming together in creative ways to save companies or start new ones. People a starting to work together. They’re not waiting for a government bailout. They’re moving on.
When this is past, we have the chance to be better people. We’ll pay more attention to what our government is doing. We’ll watch our finances better. We’ll find strengths we didn’t know we had.
But it’s going to sting a little.