The Blind Leading The Clueless

While apropos of the current times, this is probably better directed towards our Government than Wall St at this juncture.

After all this is the group of people that is complaining that they banks aren’t lending out the cash infusions they need to be solvent, an action that would put the banks right back at Square one or worse. These are the folks who are endlessly prattling on about resolving the foreclosure problem via loan modifications (proven to be infective), cash infusions into the banks/buying mortgage securities (how does this even impact someone who can’t afford their mortgage) and who are unwilling to fact that a key driver of the foreclosure crisis is people who could never really afford their mortgages in the first place.

This is also the government that thinks it can create jobs via giving companies tax credits for each job created, a premise that makes zero sense since the cost of the job will exceed the benefit provided by the tax credit. Just think about it: what value is a $3k tax credit vs. a $30k salary? If an employer doesn’t have the productivity to justify a $30k salary (on top of employer’s taxes and benefits), a $3k tax credit isn’t going to change the situation so that creating a new job provides a net benefit back to the employer.

The only true way to create jobs is to generate/stimulate enough productivity so that new jobs are  needed investment in order to sustain growth, tax credits are simply not going to provide employers with the productivity boost and ROI they need to justify creating new jobs.

I wonder if the behavior of the politicians in Washington is a function of their ignorance, a misguided attempt to cater to the electorate and/or clueless political pundits, or an unwillingness to confront the true reality of the current crisis.

Either way, until the nation as a whole wakes-up and confronts the true nature of the crisis, not only are we going to be unable to develop any effective solutions, it’s likely that the solutions we do create will either prolong the crisis and/or create new problems for the future.

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