As soon as possible, I would urge you to come to California and visit San Joaquin and Riverside Counties by helicopter. You will see the result of the irrational exuberance that led American consumers to believe that the growth yield on exuberance was practically infinite. Houses were bought with low or no down payments and with low or no income. The houses were then treated as cash machines and leveraged by the purchasers into the purchases of expensive SUVs and other vehicles, flat screen televisions, boats, furniture and vacations in Hawaii. The resultant debt meters spun and spun and the consumers were allowed to feel very good about their ability to amass huge debt burdens, which were hardly burdensome at the time.
All the exuberance of lowly homeowners paled into insignificance to that of the investor class and especially those banks and institutions trading in paper wealth, highly leveraged derivatives, fantasy-driven hedge funds, and deliberate deceit used when necessary to promote the purchases of all these financial "products".
The resultant bubble was celebrated by government officials far and wide and no one, including you, urged pragmatism, regulation, or appropriate transparency in the transactions that generated trillions of dollars of fantasy wealth.
Now, Mr. Obama, you have reached the pinnacle of American governance just as the fantasy world of American wealth is crashing and burning. Good luck in sorting it out by employing the creators of the inflagration as firemen! Your strategy is like Ronald Reagan’s placement of James Watt as Secretary of the Interior.
Mr. Obama, what America really needs is wealth distribution and an end to the fantasy of perpetual growth. You would do well to consult with men like Professor Herman Daly, former economist of the World Bank, who wrote an important book called "The Limits to Growth". Professor Daly, in an appendix to that book, called to mind a strategy for public welfare first mentioned in the Holy Bible, called the "Jubilee Year" strategy. You should read it and give it some thought, not as a spiritual or religious concept, but as a moral concept for public welfare. The gist of the Jubilee Year strategy held that every fifty years, the wealth of the entire nation should be evenly redistributed to the entire national population. Nothing could be fairer than that!
Mr. Obama, if you listen to the Larry Summers’ of the world, you will receive bad advice and be influenced towards injustice. Albert Einstein once said that it is folly to try to solve problems using the same mindsets that created them.
Mr. Obama, investing in exuberance ultimately leads to bankruptcy. America’s recovery can only occur by hard work, a period of sacrifice and healing, and a rejection of the immoral greed and striving for unfair advantage and unearned wealth that put us where we are now.
Good luck in working through these problems.
