Martha Randolph Carr Martha Randolph Carr, 10/11/2010 [Archive]

Calculating What Never Was

Calculating What Never Was

By Martha Randolph Carr

The unemployment rate is stubbornly holding at 9.5 percent, according to the US Bureau of Labor and Statistics. There continued to be some job loss as the rest of the census came to a conclusion and local and state governments shed jobs trying to patch up holes in their budgets.

However, the private sector added 64,000 jobs in September, which is great news. Inch by inch we are still heading in the right direction. The Great Recession is over and the economy is being rebuilt.

We are now at the place in the road where we feel a little better and want our old lives back. That's lead to a lot of complaining that things don't look the way we want them to fast enough.

A cold splash of reality is what's needed here so we can keep building from where we are and not lose focus.

Collectively, as individuals, as a country and even as a global economy we dug ourselves into one of the worst financial messes since we started printing money. It wasn't just the leveraged low-rated mortgages. It was also the massive spending that was artificially inflating a rate of growth and a mentality that success equaled ownership of as much as possible.

Success can be measured by the number of friends and family that surround an individual where they can be themselves. That's the entire game. Money and what it can buy are tools to enhance those relationships and not the point.

Making money and the shiny doodaws the point is what drove a lot of money managers to look for ever craftier ways to create year end bonuses in the millions. Let's not kid ourselves about what the motivation was to repackage bad debt.

Wall Street wasn't looking for ways to making America a better place to live. They were creating new wealth, mostly for themselves and we wanted to be like them, just a little, so we tried to emulate them way beyond our means. However, they were the only ones who really knew it was a game so when the same bankers and money managers realized they were about to bleed money, they sent us the bill.

It was a brilliant move in some ways. They pointed out that the crisis in the banking industry was so large it was pulling down others and had the potential to stop our economy cold. That's not an exaggeration but more of an understatement. At the moment that Bear Stearns, Morgan Stanley, AIG, Shearson Lehman, Merrill Lynch and others were visibly failing there was an entire roster of others who were about to follow them.

If that had happened the unemployment rate right now would be doubled or more and real estate prices would have been cut in half across the nation. Bread lines would be back and thousands more families would be making very hard decisions about where to live or even how to get enough food for the week.

As bad as things have been, and it's been a very rough two years, it would have made the Great Depression look much like World War I did once the Nazis stepped onto the world stage.

Everything would have changed and we'd be talking about making things better for a future generation while we did our best to pull together and just survive.

That's what faced everyone who gathered around the table at the White House and the Federal Reserve in 2008 when they had to figure out what to do next. The bailouts by taxpayers in the billions and the takeover of the banks and other institutions like GM, as distasteful as they were, averted an economic blackout so bad we could not have fixed it. We would have had to start from scratch.

There are those who think that capitalism has a natural reset button and if we hadn't bailed out industries it would have simply reset. They would do well to remember that Hoover thought the same thing and so, did nothing, that until 2008 it was a cliché to say that real estate in America always goes up in value and that there is always a tipping point that when reached you don't come back. You start over and use the harsh lessons to make sure it doesn't happen again.

So, as much as you may not like those people who sat around those tables and handed out our money, which is getting paid back sooner than expected, feel some gratitude for what never was and instead what we just might continue to build.

Martha's latest book is the memoir, A Place to Call Home. Email Martha at:

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