Recently Timothy Geithner, the Treasury Secretary of the United States, gave a speech about, among other things, what he believes caused the recent financial crisis:
You can’t legislate away stupidity and risk-taking and greed and recklessness. What you can do is make sure when it happens it does not cause too much damage and to do that you have to make sure you have good rules against fraud and abuse, better protections and you force banks to hold more capital against their risk
Basically he said that most of the activities that caused the financial crisis were not illegal (technically true), and that the government doesn’t have the ability in a free-market economy to stop companies from making reckless decisions. Sure, that’s probably true. But I really still think he’s shying away from the real problem.
Why did we believe them?
Why did we trust them?
For years, it seemed like it was so easy just to give your money to someone else and have them take care of it, grow it, and give it back to you like some sort of benevolent all knowing money farmer. The economy seemingly had nowhere to go but up, so we trusted, because it was simple. Just work and you can buy stuff; it doesn’t really matter how much stuff, as long as you can pay the bills that come in, you’ll be fine. Trust me, I was a part of this wave for a while. We had a good bit of credit card debt coming out of college, and at one point had a mortgage and two car payments to boot.
But that doesn’t work anymore. Interest rates are up and the banks aren’t just handing out Scrooge McDuck style money bags anymore. So if we don’t trust the banks or the economy anymore, who do we trust?
Make your own economy. Live to scale. I know there are people going through hard times, with real problems, medical bills, or whatever else is bearing down. Those aren’t really the people I’m talking about. I’m talking about everyone else looking with a weary eye at what the stock market is going to do, what the job numbers are, and go home to their bills and their debt and worry. Why worry when you could stop? Is it worth it? I’m trying my best to take my fortune (read:future, trust me I’m not swimming in gold coins over here) into my own hands.