During the last several Presidential terms, there has been some crisis or another near the end of their term.
This is because the country rode a wave of success that was an illusion, and it had to crash eventually.
President Reagan rode the buildup in the defense industry. It is fairly well accepted that we beat the Soviet Union by outspending them. At some time it had to come to an end, and in this case the loser was President Bush (I) who paid the price when the economy could not sustain the spending.
President Clinton rode the Internet bubble. I remember sitting with the CFO of the company I was with and we were watching the stock market (and our 401K's) go through the roof, and thinking "what is wrong with this picture?" We we found out. Besides Tyco and Enron, many companies were built up with paper profits and speculation. When it started to crash, President Bush (II) and maybe Al Gore had to take the fall - at least President Bush could claim to be of the other party and thereby dodge some of the blame.
Now President Bush has been riding the housing boom. We don't know who is ultimately to blame, but I am going to go out on a limb and say that at the least, the current administration was stuck between a rock and a hard place. If they pushed for regulation, they would be going against the tide of less government regulation. If they didn't push for regulation, they knew the house of cards would come down, could they just not have it on their watch. My feeling is that we will find they took the middle road. They talked a good game in order to cover themselves, but at the same time did nothing to push for changes.
The next president is going to have to convince people to lower their expectations, to return to a simpler life, to put value in actions rather than possessions, so we can dig ourselves out of this mess.
ChrisZ
10 min
