Forest fires, bailouts and rebirth

Friends,

I saw the most amazing thing in Yellowstone Park last week.  Perhaps you have seen it.  There was a tremendous fire in 1988 and thousands of acres of trees were lost.  Twenty years later you can still see the signs: hacked off, perfectly straight logpole pines dot the landscape; forty feet high with no branches or needles.  But the most amazing sign of the fire is the dense and rich growth of gorgeous pines 10-15 feet high now.  I asked in disbelief:  “None of these were planted by humans?”  “No” came the answer.  “The forest regenerates naturally, as cones in the soil sprout up in the wake of the fires.”  Scientists predicted the remarkable growth we can now witness there.

 The cycle of death-to-life is surely one of the core laws of life – natural, spiritual, economic and social life.  It makes me wonder about leadership in tough times.

 Consider the current, baffling bailout situation.  Should we just let it all burn down?  Some wildly free market folks say “do nothing and watch the market work.”  They remind me some of those who manage the forests who say “let it burn.”  It will take care of itself.  Although there is a parallel, forests and financial markets can also be distinguished in any number of ways.  And increasingly the architects of the bailout are pointing out that the reforms do involve the market.  The government will be buying (not paying for someone else to maintain) assets, and acquiring them at pretty low prices.  We taxpayers will be investors!  Let’s hope they’re right.  Let’s hope with our investments in assets that have burned nearly down to the forest floor of the market, that same “forest” of capital will soon be teeming with activity.

 I wonder though how we turn around a situation in which people increasingly expect their leaders to solve all their problems.  People took crazy loans and are now eager to be bailed out.  People extended crazy loans and now want to be bailed out.  Of course CEOs made equally if not more ridiculous moves – as they supposedly had knowledge of economic history and basic economic laws.   We have an instinct to “blame the leader” and to expect rescue from the leader.  As well as I can understand it, the markets do need to be supported – and gratefully protections are being put in for Main Street.  But WHAT IF some trees needed to die?  Sometimes the kid needs to feel their mistakes and not be rescued at the school office by the parent and the lawyer.  Sometimes the worker who has made a terrible decision has to be let go, if s/he is to learn and become more effective.  Sometimes we need a few more consequences, which may not be fatal for the individual, and which may strengthen the forest, the business, the economy, or the family.

 Sometimes leaders have to find ways to let people experience the “deaths” that will cause their people to be “reborn” with strength.  Sometimes when you’re leading you need to choose not to rescue in order for you and them to 

 

Lead with your best self,

Dan

 

15 responses to “Forest fires, bailouts and rebirth

  1. Dan
    I find it interesting that the legislators who oppose supporting the bi-partisan rescue plan state their opposition to the plan with almost religious fervor. None of us love the plan nor the economic conditions which we find ourselves in at this time. There is enough blame to go around for all of us. However coming from a true believer mindset leaves no room for discussion or solutions.

    Delores

  2. Maybe whatever happens next will move us from a “greed is good” mindset and “all for me first” to working together on common issues and doing what is right at all costs.

  3. I, for one, have never contributed to this problem. I do not borrow money, nor do I lend it. I worked hard, sacrificed to live within my means, paid off the mortgage on my farm, drive a vehicle that through my mechanical skills can maintain to operate funtionally, etc. I do not use a credit card, although I do have and use my debit card….which is spending money I’ve already accrued!
    The problem is exemplified by CEO’s such as that of Lehman Bros receiving $90,000,000.00 compensation last year alone! The problem is lifelong politicians that have manuevered retirement funding and health care, along with a bevy of other percs, that do not run in parallel to what the citizens of Main Street receive. The problem is that both Wall Street and Washington DC, along with the trickle down effect for state and local government figures, to cozy up, sell out to, greed and corruption, via lobbyists, enabling legal thievery for the greed mongers. The problem is a lack of term limits, which would, if in place, effectively replace the greed and power mechanisms, implementing instead the facet of servitude, public servant, for which these positions of government leadership were supposed to be!!! I believe it was Ben Franklin who said, “Those who are willing to replace liberty with security will have neither”….or somthing to that effect. Washington DC does not have the best interests of Main Street in mind, they are scurrying around, along with their greed and power monger bretheren on Wall Street, like cockroaches that are recognizing that a fogger has been placed inside the house…..trying to save their own assets and create a socialist regime that can live by the adage, ABSOLUTE POWER CORRUPTS ABSOLUTELY!If Washington DC wanted to provide a real approach to a “bailout”, they’d seize all of he assets of guys like the CEO of Lehman Bros, hold it as collateral, and if these “boy wonders’ didn’t turn around the sickness that they helped to create, then, too bad, their assets are gone, back into the US Treasury pool, and they can move into section 8 housing.
    Do you want me to tell you how I really feel towards this another example of the fleecing of America?

  4. Dear Mr. Mulhern,

    Although I do agree that there were absolutely some “crazy” lending practices by both the lender/lendees…and no doubt, people weren’t paying attention to the signs of the future…is it possible that there were those lending institutions that are quite small potatoes in comparison to the big guns who thought they could “afford” to make these crazy deals who are REALLY in trouble?? I’m thinking that because of the effects of our current economy which is in dire straights…wouldn’t EVERYONE be effected?? Again, I am not a proponent for using this money IN ANY WAY to pay the big salaries and bonuses that some were accustomed to…but, I do believe the money might have been used to help those who REALLY needed help, thus, helping those of us who are in need of their services.

    Concerned,

    M. Chabot

  5. I think that if the government wants to take a hands off approach, it should not change the strategy when the “big boys” are hurting. Let the market adjust itself. I am NOT in favor of picking up a 700,000 tab for reckless loans. The companies should decrease in size as the market dictates. Less homeowners means fewers mortgage companies. What is the problem?

  6. Dan,
    Aren’t you fortunte. You are one of the few that can afford to take a vacation. The ‘regular’ folk are eating hamburger helper, without the hamburger meat.

    1. Dear Anonymous,

      I regret that you’re not able to take vacations. Spending vacation time with my family is one of the things that I look forward to most, and that I set time and some savings aside for. However, I do consider myself a “regular” person like you. My mom and dad grew up during the Depression, and like writer Mark, I learned to live within my means; my wife has a similar family background and does the same.

      However, I think we should refrain from criticizing others just because they also have made their family vacations be a priority. As I’ve gotten older, I’ve realized that a lot of folks who now have some means didn’t start out that way, but that they got there through hard work, getting an education, and sometimes by taking chances. Time spent with family should be a Number One priority, whether an individual makes $10,000 or $10,000,000 per year.

      And lastly, if an opinion is truly important to you, please share your name. Mine is Tony Ettwein, and I live in Kalamazoo.

  7. “The things that will destroy America are prosperity at any price, peace at any price, safety first instead of duty first, the love of soft living and the get rich quick theory of life.”
    – Theodore Roosevelt

    I offer you this quote from Teddy Roosevelt to point out how far our country has strayed from its basic principles.

  8. It would be interesting if there was transparency relative to the recent $60+ BILLION socialist/federal handout/bailout of the Big 3 in Detroit……just exactly whom benefitted besides, obviously, the Big 3, ie. lobbyists, deal brokers, state of Michigan employees, etc., and how much $$ they received. Inquiring minds NEED to know! That might be a great topic for next week’s RFL.

  9. As you so feverishly remind us, your faithful readers to “lead with your best self.” We all, as individuals, have fallen short of leading or operating to the best with our best selves. Yes, all participating parties involved in this financial debacle acted recklessly without merit. Yes, all parties, in their infinite stupidity has sent the Wall street market crashing in flames, and the highlight of the most egregious bad acts of behavior is the million dollar compensation payment packages to CEO at the benefit of the taxpayer. In the wake of this financial hurricane, blaming the CEO’s, the board members of these financial institutions and naïve consumer that overextended him/her with not correct the situation. The proposed “Bailout Plan” bi-partisan situation should not become the replacement golden parachuted compensation plan for falling institutions; however, United States’ current economic landscape of an epic disaster. Under the new proposal, there definitely needs conservative safeguards in place. But the federal government should not be co-defendants with these financial institutions by making irresponsible decisions, rewarding deceitful behaviors without punishment, and allowing the public to reserve the right for a positive resolution of this situation without a viable shareholder. If the federal government post along the sidelines as this tragedy unfolds without consciousness than the federal government is no better than those financial institutional perpetrators.

    1. The federal government, ie. Congress, Senate, and GWB hinmself, and those from the past who held office……they are in bed with Wall Street. Who do you think took the lobbyist bait in order to allow such reckless abandon? It is difficult, or damn near impossible to find an unbiased ‘referee’ when they are on the take. Let Main Street be the judge and jury, on Nov. 4th, and until that day, hold EACH and EVERY employee of the USA citizenry accountable. A good start, as I posted above, would be seizure of CEO assets, but then the name of the ganme would be “what’s good for the goose is good for the gander”….and Congress, Senate, et al would have to forfeit their personal fair share of ill-gotten gains.

        1. If you have difficulty finding the article, maybe this information will be helpful. I believe the Home page is Naked Capitalism. The article is “German Minister: US Over as Financial Superpower.” It is dated September 26, 2008.

        2. Thank you for that link. I perused the article and commentary, and decided to excerpt two oipinions that I consider quite valid:

          Paulson was the leader on Wall St when all of this toxic sludge was issued.

          Now he is the leader of the treasury. There is absolutely no doubt: he stole trillions from America and the world on the way up, and now he is stealing the rest on the way down.

          If you explained the financial crisis to an eight year old, what is the first thing he would ask? Why is Paulson, the head of Wall Street, in charge of the treasury? Of the 6 billion people on the earth, he is the absolute worst choice.

          This is pure and simple insanity.

          * * * * * * * * * * * * * * * * * * * * * *

          It is quite tragic to read all the scapegoating and blamegaming.

          All countries in the world has accepted the Fractional Reserve Banking system, i.e. a system where banks are allowed to lend way more capital than they have deposited.

          This system is in itself to be regarded as fraudulus, since it should not be allowed to create money out of thin air. If all outstanding loans are backed by a physical asset, such as gold, then there would be no risk of creating a credit crisis. Furthermore, people would trust that their deposits in the banks are protected. The banking system would be solid.

          But since we do NOT have a stable foundation for our financial system today, then crises can be expected to be naturally occurring and given time the system can be expected to collapse when the public’s trust in the system diminishes. We are very near that point now.

          The tragedy is that governments, authorities and columnists have overlooked the basics and are concentrating on treating the symptoms instead of attacking the disease itself. Throwing more good money for bad and regulating an already flawed system is not going to heal the patient. More regulation will only make matters worse. A free market should be left alone to promote good business and punish bad business.

          Governments should do two things. Instead of regulation, they should aim for a strong legislation to protect individuals from fraud and other types of assaults on individual rights. And they ought to outlaw fractional reserve banking and reinstate a solid gold standard.

          * * * * * * * * * * * * * * * * * *

          would it be a safe bet to say that the Dubai based corporation, Halliburton, has divested itself of U$D in exchange for gold and Arab currency?

  10. I was forwarded this by a staunch Republican friend. I thought it was very “right on”. Read, enjoy, act!!

    This is an article written by Charlie Reese, a former columnist for the Orlando Sentinel Newspaper. Very interesting perspective on the state of our Nation!

    545 PEOPLE
    By Charlie Reese

    Politicians are the only people in the world who create problems and then campaign against them.

    Have you ever wondered why, if both the Democrats and the Republicans are against deficits, we have deficits?

    Have you ever wondered why, if all the politicians are against inflation and high taxes, we have inflation and high taxes?

    You a nd I don’t propose a federal budget. The president does.

    You and I don’t have the Constitutional authority to vote on appropriations.

    The House of Representatives does.

    You and I don’t write the tax code, Congress does.

    You and I don’t set fiscal policy, Congress does.

    You and I don’t control monetary policy, the Federal Reserve Bank does.

    One hundred senators, 435 congressmen, one president, and nine Supreme Court justices 545 human beings out of the 300 million are directly, legally, morally, and individually responsible for the domestic problems that plague this country.

    I excluded the members of the Federal Reserve Board because that problem was created by the Congress. In 1913, Congress delegated its Constitutional duty to provide a sound currency to a federally chartered, but private, central bank.

    I excluded all the special interests and lobbyists for a sound reason. They have no legal authority. They have no ability to coerce a senator, a congressman, or a president to do one cotton-picking thing. I don’t care if they offer a politician $1 mi llion dollars in cash. The politician has the power to accept or reject it. No matter what the lobbyist promises, it is the legislator’s responsibility to determine how he votes.

    Those 545 human beings spend much of their energy convincing you that what they did is not their fault. They cooperate in this common con regardless of party.

    What separates a politician from a normal human being is an excessive amount of gall. No normal human being would have the gall of a Speaker, who stood up and criticized the President for
    creating deficits. The president can only propose a budget. He cannot force the Congress to accept it.

    The Constitution, which is the supreme law of the land, gives sole responsibility to the House of Representatives for originating and approving appropriations and taxes. Who is the speaker of the House? She is the leader of the majority party. She and fellow House members, not the president, can approve any budget they want. If the president vetoes it, they can pass it over his veto if they agree to.

    It seems inconceivable to me that a nation of 300 million can not replace 545 people who stand convicted — by present facts — of incompetence and irresponsibility. I can’t think of a single domestic problem that is not traceable directly to those 545 people. When you fully grasp the plain truth that 545 people exercise the power of the federal government, then it must follow that what exists is what they want to exist.

    If the tax code is unfair, it’s because they want it unfair.

    If the budget is in the red, it’s because they want it in the red.

    If the Marines are in IRAQ , it’s because they want them in IRAQ .

    If they do not receive social security but are on an elite retirement plan not available to the people, it’s because they want it that way.

    There are no insoluble government problems.

    Do not let these 545 people shift the blame to bureaucrats, whom they hire and whose jobs they can abolish; to lobbyists, whose gifts and advice they can reject; to regulators, to whom they give the power to regulate and from whom they can take this power. Above all, do not let them con you into the belief that there exists disembodied mystical forces like “the economy,” “inflation,” or “politics” that prevent them from doing what they take an oath to do.

    Those 545 people, and they alone, are responsible.

    They, and they alone, have the power.

    They, and they alone, should be held accountable by the people who are their bosses provided the voters have the gumption to manage th eir own employees.

    We should vote all of them out of office and clean up their mess!

    Charlie Reese is a former columnist of the Orlando Sentinel Newspaper.

    What you do with this article now that you have read it is up to you, though you appear to have several choices.

    1. You can send this to everyone in your address book, and hope they do something about it.

    2. You can agree to vote against everyone that is currently in office, knowing that the process will take several years.

    3. You can decide to run for office yourself and agree to do the job properly.

    4. Lastly, you can sit back and do nothing, or re-elect the current bunch.

    YOU DECIDE, BUT AT LEAST SEND IT TO EVERYONE IN YOUR ADDRESS BOOK, MAYBE SOMEONE IN THERE WILL DO SOMETHING ABOUT IT!

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