Engineering a Renascent Economy

The problem is a cataclysmic loss, not only of market liquidity, but of faith in the restoration of a healthy international financial situation any time soon. Investor confidence has evaporated, as those who still have money to invest simply do not know where to turn, and those whose investments have disappeared into the ether, remain stunned and unresponding in their grief and uncertainty.

Occasional sparks of hope light up the world financial atmosphere when governments from America to China, the European Union to India, Russia to Saudi Arabia, announce tentative but hopeful initiatives to restore stability and encourage investors. But when a monumental structure has collapsed, astonishing those who have striven painstakingly to erect it year over year - anticipating hefty returns - the failure is stunning.

Government intervention in a free market economy has traditionally been seen as interference where it is not needed, that the market naturally regulates itself, for it is in its own best interests that it do so. One would think. And then one should recall the propensity of human nature to rarely be satisfied with a reasonable return on investment, striving continually for quick and easy money.

Some measure of oversight, reasonable in nature, insufficient to stifle entrepreneurship and a spirited degree of innovation, is never a truly bad idea; think of it as insurance against the venomous poison of human venality. Unfettered capitalism, where good sense and balance is defenestrated, leads to the victimization of a very large segment of society.

So, now that collapse is universal and deep and has managed to spread the virus of uncertainty and unwillingness, what is the solution? Why the most respected political and academic minds of the world's leading economic institutions have rendered a confused and unsettling set of standard operating procedures to face down this collapse that no one can say will succeed.

Try, then try again. With each pronouncement of government intervention, meant to soothe the jangled nerves of the financial community, stock markets plunge ever deeper, currencies sink, the fortunes of countries plummet, people panic as jobs are lost and with them peoples' hope for the future. What has taken decades and decades of hard work to acquire and accumulate suddenly wafts away as though it never really existed.

And some of it never really did; paper promissories without collateral value. Value it; blink and it's gone. However, governments and their leading financial experts are generally agreed that countries rely on their financial institutions, their banks and lending institutions, to oil the wheels of industry and commerce, to enable people to purchase goods and services and to live comfortable lives.

Bail out industries as well? Where will it stop? Mortgage the future of countries' debts and annual deficits to the greed of huge corporations whose decision-making and ineptly produced products geared toward failure of performance for the larger purpose of ensuring employment in an anxious population?

General Motors Corp., Chrysler LLC and Ford Motor Co. represent iconic America-based industries, and hundreds of thousands of employees in their companies and allied industries are dependent on their existence, but did the United States step in to save its metallurgy industry from extinction when steel production went elsewhere in the world?

Give up billions in taxpayer funding to restore fiscal equilibrium to three giant vehicle manufacturers which have all paid lip service to meaningful research and innovation, steadily churning out deficit-laden mechanics, energy-burning monstrosities, ignoring the success of foreign auto makers whose attention to high performance and economics have left them in the dust?

Reward revoltingly high-paid CEOs for leading their miserably managed industries into ongoing failure? What a conundrum; government wary of holding back from the industry's outstretched hands for deliverance from collapse. The nightmare of further job losses on a massive scale, more defaulted mortgages and business failures, looms on the near horizon.

And what of those very auto-industry employees and their unions and their job-ruinous demands? Who, even while the corporations that employ them, stand forward and declaim no intention of accepting lower wages and benefits; perpetually entitled unto bankruptcy. No one, it would appear, is responsible, not the executives whose lack of vision inadequately led the industry, nor the unions that bled it.

And there is Canada, on the sidelines, awaiting the inevitable. For the incoming president of the United States has stated categorically that he and his party are determined to bail out the automotive industry in that country, defying the expressed doubts of the Republicans under whose watch this contretemps developed. Canada too, despite its relatively healthy financial state, should be looking to keep its economy in a state of well-bring.

By encouraging its domestic market to remain vibrant, by ensuring there is sufficient liquidity available for credit for companies with sustainable futures and proven profitability and need. The country's focus should remain on its financial markets to shore up credit conditions. But when the U.S. government relents toward offering loans to the auto industry, Canada will by necessity be drawn into a like scenario.

And then one recalls federal and provincial 'loans' and tax breaks and entitlements generously offered to these companies in the past, to ensure that employment remain stable in various parts of the country. Only to have the corporations decide, a half-year on, to close shop nonetheless and move elsewhere. Investment evaporated on the taxpayer dime. Such are crisis management plans.

There are no guarantees for success in any ventures; simply the ongoing need to respond with some modicum of assurance for success. Events propose; time disposes.