Friday, November 28, 2008

Conservative vs. Liberal

(cartoon from RedPlanet Cartoons)

2 comments:

Mberenis said...

There is more to this cartoon than initial impression. Most people don't realize how much money there is out there. During economic times like this, there is more money to be had than ever. Because of the bailouts and economy, lenders are bending over backwards to bail you out too. Believe it or not, there is people getting tons of cheap money nowdays to start businesses, buy homes, pay off debt, and more. Bailout is for You Too!

a red voice said...

Throwing money at failing businesses doesn't save the businesses - it postpones the failures. Sooner or later we have to pay the piper.

Here's a parable to understand this concept:

"There is a parable I learned long ago from the continuous improvement management philosophy. It’s called “rocks and water.”

Imagine you want to row your boat along a full, gently flowing river. No sweat. Imagine the water level drops significantly, exposing the jagged rocks along the riverbed. Now try rowing. Can’t do it; too many rocks.

In the parable, the water is any enabling resource of which having lots can obscure problems. In many businesses, the water is cash. Too much cash makes it easy to ignore the rocks underwater. Only when the water is drained can we see — and remove — the rocks. Many of the best organizations keep their water level low on purpose so that when rocks begin to appear they can be seen and dealt with. ...

We’ve let the water level rise for decades, hoping it would keep everyone floating along. The so-called “predatory lending” that some point to is just a sliver of the problem. The real problem is that, driven by well-intentioned policies, some smart pencil-pushers figured out how to create a mechanism for avoiding risk altogether. Make the loans, sell the risk to someone else. This opened the floodgates as it became easy to invest with little apparent downside. With the system set up this way, no one feels the pain — until everyone feels the pain. ...

The river’s drying up now. ...

I know from listening to ordinary Americans all through the country that there is a pervasive sense that, at some point, we’re going to have to pay the piper. The people I hear almost lament that nothing seems able to shake us from our collective consumption and obsession with more. When that time comes, companies will fail. Our lifestyle will drastically simplify. We will feel pain, all of us.

Maybe that time is now. Maybe, with the water receding, we can set to work removing the rocks." (- by Brad Rourke)

We got to remove the rocks at some point - either now or later - pouring more water (money) in the river NOW won't make the rocks (problems) disappear. Later when the river dries up again, we will be faced with the same rocks (problems) and have less water (money) to spare. When are we going to remove the rocks?