Hey, remember three years ago, when the stock market was in freefall, Europe's finances were looking shaky, and any government help was uncertain at best?
Welcome to 2008, part two.
On Thursday last week, stocks did a double flip off the high board and headed for the bottom of the deep end. A one-day blip would have been bad news on its own, but it was the capper to two weeks of gradually crumbling stock prices, which were fuelled by a couple of months of shaky economic forecasts, mostly bad news on job creation in the U.S., and a European debt crisis that's spreading like chicken pox in a classroom of unvaccinated kids.
Canada had a tough recession, but generally fared better, and has bounced back a little stronger, than our neighbour to the south. Our housing market did not implode. (But it might this time - nothing like a financial panic to pop the housing bubble.)
If there was a consensus about what caused the last recession, it was that letting financial wizards do whatever they want is not a good idea. That selling homes to anyone with a pulse is not good business sense. And that there was too much debt, both private and public, sloshing around.
In three years, the sub-prime mortgage part has pretty much taken care of itself in the U.S. The other two parts? Not so much.
The response of governments, at home and abroad, was to prop up and restart the same system that got us into this mess. A few new rules were passed here, a few regulations there, but we upgraded from an Edsel to a Pinto, at best. We need to look at the way our economy works, and consider if it really does. Work, that is. Is it doing what we want it to do, and can it be changed for the better?
The old saying here is apt. Fool me once, shame on you. Fool me twice.
