Friday, September 26, 2008

The Six "P's"

I can't remember where I first heard this saying, "Prior Planning Prevents Piss Poor Performance" - the "Six P's". It's true. If you get in front of problems, then you can avoid them or minimize their impact. If you don't see the world as it really is and take proactive steps, then problems grow into crises. That's why the current financial situation represents "piss poor performance" by our elected officials - especially the executive branch.

Fingers are being pointed in all directions - always away from whoever is pointing the finger, which is typical of politicians. The fact is that everyone in a position to have gotten in front of this financial crisis failed us. Republicans, democrats, the executive branch and the congress, the regulatory agencies, and the big companies that dominate the markets who are now crashing. Nobody is clean, except perhaps Warren Buffet, who called derivatives and credit swaps and packaged sub-prime mortages "financial weapons of mass destruction". He was right.

After a week of listening to many points of view on this topic, I have three conclusions:

1. The government "bail-out" is the right thing to do, if it includes appropriate oversight and transparency, and has terms that maximize the government's ability to recover funds. If the credit markets can't function, a serious recession is inevitable.

2. Conservative "small town" republicans have their heads in the sand and are fomenting chaos by focusing on their outrage instead of working toward a solution. They are the "Herbert Hoover's" of the current situation; they are willing to risk a general meltdown over "principle". However, these are the same people who, for years, have had plenty of opportunity to get in front of the problems but failed to do so.

3. The president is primarily responsible for not preventing the meltdown. He is "the Decider", or at least, the captain of the ship. He has 3,000 people in his office; he appoints the SEC chairman, the Federal Reserve chairman, and the secretary of the treasury; he oversees the regulatory agencies. In his role as the primary "defender of the country", it was his responsibility to see the risk of economic chaos building and then take steps to mitigate it, whether or not his message was politically palatable. He did not do this - he looked the other way because his message would have been politically unpopular. He failed us, either because he was not smart enough to understand the problem or he just ignored it.

In the end, the meltdown will be avoided. All the "good Americans" will pay a high price for the actions of the "bad Americans" - those who took unreasonable risks and those who managed the scams that allowed people to take these risks. We have good reason to be outraged, but we have to deal with the situation as it is at this moment - looking forward, not backward.

Will we remember the "Six P's" as we look at the many other major problems that America faces? Time will tell. The November election will have much to say about this.


ThomasLB said...

What bugs me is that the bailout is not directed at the people who are losing their homes, it's directed at the corporations that are losing their profits.

I'm sure the rich will get their money. They always do.

But here's the thing: Ever since Ronald Reagan, Republicans have been preaching and working toward a world without rules, a Darwinian form of capitalism where the good rise to the top and the bad whither and die. I think *any* bailout must be preceded by a resolution admitting that they were full of shit.

Dave said...

I haven't read anything today, but, I'd still like us to wait to spend this stupid amount of money until I at least had a clue as to what they were fixing, what they were doing and what they hoped to accomplish.

Ron Davison said...

I saw this quote from a hockey player after a brawl. He said, "We have no one to blame but each other."

It seems to me that Bush, tired of merely being called the worst president in American history is now angling for the title of worst president in the world.