An Editorial - Going to Hell in a Fast Car

We find ourselves seven months after the financial meltdown.Things are a little better and yet the general financial situation is still very uncertain. There is still a question that hangs in the air. That question is, ":How did we get into this mess?"

The easy answer is the housing market meltdown and the billions of dollars of substandard mortgages that were given out. And Wall Street greed certainly played a role in this really bad financial soap opera. And last but not least, the federal regulators who failed to do their job. And failure of the government regulators can be laid to either a badly designed regulatory system, a regulatory system corrupted by the very companies who were supposed to be regulated or regulators who were just too close to the companies being regulated.... or all of the above. But to attribute what happened in the months and years that preceded the meltdown to these developments misses one very simple and very obvious reality.

In America, there has been this underlying ethos that the real meaning of the American dream is that anyone who wants the biggest, baddest and best should be entitled to have it. Televisions, cars, homes, cameras, jewelry.... whatever floats your boat. Never mind that most of these things that we so desire are usually beyond the financial reach of most Americans... that is, if they were living within their means.

So enter the credit card, the easily-obtained home mortgage and other sources of easy money. The logic went like this.

• I want that camera, car, house, etc. 
• But I don't have the money to buy it.
• That's okay. I'll put it on my credit card or get a loan. 
• But I have a lot of credit card debt and a lot of loans, already. 
• Hey! I'll figure out how to pay the new charges when I get there. Right now, I want that!

So individual Americans buried themselves in debt to obtain things they did not really need. Companies, big and small, built their marketing campaigns on selling everything and anything to people caught up in a mindless frenzy of consuming. The more that people indulged themselves, the greedier companies, large and small, became. And the larger the company, the greater the greed. Wall Street ultimately choked on failing to see where all this was leading. A huge financial bubble was inevitable. When that bubble burst, voila. The financial meltdown of Nov 2009.

There is a great line from the Broadway show, Chicago, when the piano player sets the tone for the last song in the show. One of the things he tells everyone in the audience is ..."Let's  all go to Hell in a fast car." Funny thing about that show. It  was set really close to that other meltdown: The Crash of 1929. Sort of suggests that people were living pretty much like a lot of us were living up to November, 2009. 

When times were good, people from other countries looked at how we lived in this country. They liked the standard of living we enjoyed. They wanted to have what they wanted when they wanted it, just like we did. They bought into this whole concept of immediate gratification and their corporations bought into becoming the suppliers for all the new credit card junkies. This development has got to be the worst part of this fiasco. That said, people  and companies in other countries made their choices and paid an awful price. But the main point here is that the United States exported an obviously flawed way of living and doing business to the rest of the world. This way of living and this way of doing business is not what America should be about. I have to believe that we are a better people than that.

I want to know a couple of things. Why is it we just can't learn from the past? Another thing I want to know is why are we just unable to see the writing on the wall? I mean, wasn't the Enron fiasco and the slew of other meltdowns at major American corporations a warning that there was  a systemic problem in the business sector and the government agencies which were charged with regulating business int his country. Also, wasn't it patently clear that too many individual American were so deeply in debt, that there would come a time when that debt would come back to bite them, as it did? I don't expect anyone to be able to give me an adequate answer to those questions. Human nature often defies logic.

So here we are. Individuals and corporations allowed themselves to embrace the destructive notion that we really should. choose "... to go to Hell in a fast car." And having figuratively gone to Hell... and come back, now all of us are paying the price for really bad judgment calls. The blame for what happened in November can be spread around to individuals and corporations alike. As Americans and as business owners, we face only two question now. What choices are we going to make in the future for ourselves or our companies? What will be our new set of priorities as we move forward from here? 

How are you going to answer these two questions for yourself?

Howard Fireman

Editor and Publisher