A NEW LEARNING
How many sports heroes have retired and later come out of retirement? We hear about this all the time. I am not announcing 'my coming out' - of retirement that is, quite yet.
The USA is experiencing the greatest regulatory failure in modern history. There is no consensus as to whether a federal bailout will cure things or make matters worse. President Bush, Paulson and Federal Reserve Chairman Ben Bernanke have said the credit crunch is dire and that without a bailout the country’s economy will plummet into a deep recession or worse. But Congress rejected the bailout bill this week. One of the main obstacles is the enormous $700 billion price tag that U.S. Treasury Secretary Hank Paulson asked Congress to approve. That money is earmarked to buy bad credits from lending institutions. In theory, cleaner balance sheets will allow those lenders to start providing credit again to commercial and retail customers, giving the economy a lift. Now all the bad debt will be placed on the taxpayer and the federal government in order to stop the bleeding of not only large companies, but the bleeding of pensioners, house owners, and small businesspeople.
Commentators are agreeing that it is the end of the world as Americans have known it. I heard an economist say that the effects of this crisis will not be over until 2015. Another says that everyone must immediately adjust to the reality that you cannot pay for things with money you do not have, which is to say, we can no longer live on credit. The credit bubble has burst. It inflated obscenely over many years. Gigantic losses have been realized all over the world. Some people know no other way to live than by credit. Plastic cards are the way we transact business from breakfast to the purchase of a car. I know that we Canadians feel that we are still sitting on the hill looking down at this unfolding crisis in America and believing that we are safe on high ground. I don’t know whether we are or we aren’t safe. I suspect that as connected as the markets of the world are, we will not be immune. So, someone like me who has for a lifetime worked within a non profit work world, receiving wages commensurate with limited institutional financing and with no pension other than what I have set aside myself. If I lose my RRSPs as some pensioners may lose their 410K’s in the States, retirement may be over for me and I will be looking for work. There are all kinds of jobs available right now. I could serve coffee and donuts at Tim Horton’s. I might have to.