Making Lemonade: A Return to Responsibility?

I understand that there are people really suffering as a result of the recession, and I realize that I am fortunate. Even in the most economically depressed state in the union, I am one of those blessed to be prospering in this economy without a worry in the world about Anne or I losing our jobs. So I am aware how insensitive it may sound for me to say that I think this recession could turn out to be something positive. In fact, I'm not the only one who believes this, and I probably wouldn't be writing this if TIME hadn't validated my feelings. They have recently published a couple of issues highlighting some good things that are coming from this recession. In the April 6th edition, their cover reads: "The End of Excess: Why this crisis is good for America," and in the latest issue they have a story about the growing frugality in American consumers. In short, this crisis is good because it is forcing Americans to do things like become closer to friends and family, and is providing a good ass-kicking to our excessively consumeristic ways. It is exposing the danger of piling on debt and being financially irresponsible; and it comes at a time when we are becoming increasingly aware the need for sustainable forms of energy which has the potential of creating a stable new driver of our economy.

Along with highlighting the need for personal responsibility, this crisis may hopefully drive home the need for responsibility in the banking and financial sectors. Paul Krugman has a great piece entitled "Make Banking Boring" where he describes how banking and finance has gone through periods of excitement and boredom. Between WWI and 1929 the banking and finance sectors were "exciting," with those in the finance sector becoming fabulously wealthy, but with soaring debt. After the depression, regulation became tight, debt went down and banking became "boring." Yet this boring period yielded a time of great economic progress for the majority of Americans. However, in the 80's, regulation was lifted and banking became exciting again as those in the finance sector, once again, became fabulously wealthy and debt blew up. Ever since, the 80's extended into the 90's, and throughout the Bush years, as Americans piled on the debt and have lived excessively wealthy, consumeristic lives. Krugman argues that we must return to a tightly regulated system and restore responsibility. I agree, and my hope is that it will not only be the system that becomes more responsible and less excessive, but individuals as well.

But there are problems, and I think David Brooks has some valid points. In his column, "Big Spending Conservative," Brooks discusses how Obama has picked up on the responsibility theme as well. This should be good news that the president is driving home the message of responsibility and less excess, but Brooks points out his hypocrisy. Brooks writes:

"Moreover, for an administration that puts responsibility at the center, it is not itself very responsible. Federal spending is the leverage the administration uses to gain control over sector after sector, and yet this money is all borrowed.
Obama imposes hard choices on others, but has postponed his own. He presented an agenda that bleeds red ink a trillion dollars at a time. Now he seems passive as Congress kills his few revenue ideas (cap and trade) and spending cuts (agricultural subsidies). Huge fiscal gaps are opening this decade that can’t be closed by distant entitlement reform. They can’t be closed by cynical Potemkin cuts, a few million at a time"

I am all for government intervention and regulation. I am all for health care reform. I am all for "green jobs." I am all for good, effective social programs. But I am also all for fiscal discipline, and that is one thing I do not see coming from the administration or congress. Now, yes, the tax cuts will expire, and I think that is a good thing, but there needs to be some spending cuts as well, and more than a piddly 100 million dollars.