Well, it is the "Goldilocks Market" at the heart of the present financial mess.
As you'll recall, in the famous Goldilocks and the Three Bears fable the young home intruder finds three bowls of porridge, one too hot, the other too cold and the third "just right". Similarly, beds were too hard, too soft and "just right".
It seems we've slipped from too much regulation to too little and are now searching for what is "just right". How to navigate the narrow "just right" line between the "bulls" and the "bears"?
In the era of too much regulation, the economy was mired in the doldrums with a slow growth rate. Then, with less regulation, things picked up, competition increased, consumers found a wide variety of excellent products and services available at great prices, and house values continued to increase. Things were "just right".
LIKE A SURFER ON THE "EDGE OF CHAOS"
However, the situation of a business in a competitive market may be thought of as like a surfer "catching a wave" and staying "on the edge of chaos". I watched some surfers at Daytona Beach. If they were not aggressive enough, they would slip behind the wave and end up in the doldrums of the flat ocean, waiting for the next wave. If they were too aggressive, they would fall off the sweet spot at the head of the wave and into the chaos of the churning waters. The waves at Daytona on Saturday were not big enough for most of the surfers and very few managed to catch the wave. (Too much "regulation"?)
Was it the lack of sufficient regulation that led many financial services executives to become too aggressive and ignore the risks, taking their companies into the abyss of failure? Or, was it the knowledge that their firms were "too big to fail" and that we US Government Taxpayers were bound to come to their rescue? I think it was a combination of both.
Over the past few decades, we taxpayers have bailed out: 1970-Penn Central RR $3.2B, 1971-Lockheed $1.4B, 1974-Franklin Natl. Bank $7.7B, 1975-New York City $9.4B, 1980-Chrysler $3.9B, 1984-Continental Illinois Bank & Trust $9.5B, 1989-Savings and Loans $294B, 2001-Airline Industry $18.6B, 2008-Bear Stearns $30B -Fannie/Freddie $200B -AIG $85B -Auto Industry $25B -Financial Industry $700B (proposed).
It seems to me we have established a pattern here of "Main Street" bailing out "Wall Street". Is it fair to force ordinary taxpayers, working hard for a living and making due in small homes and cars to "pay the piper" for the excessive parties of the rich and infamous business and financial elite?
I'd like to see them "stew in their own juices" - but we've been warned that if we don't agree to yet another bailout, there could be another depression and we could all lose our jobs and homes and savings and retirement incomes and so on.
I'm not sure what the correct answer is, but I think CONgress (the opposite of PROgress) needs to spend at least as much time coming up with the correct solution as they did, for example, considering the issue of drugs in professional sports.
ABOUT THE PHOTO
But, back to something I do know, the photo above. Automobiles are allowed to drive on Daytona Beach. They pack the sand down along a couple of lanes extending from about twenty feet from the top of the beach to about fifty feet. On Saturday, as the tide went down, I was able to bicycle along the auto lanes from our beachfront hotel north for four miles, almost to Ormand Beach. The sand was "just right" - not too dry or wet and solidly packed down.
I had to stop when I came to an area of dryish sand that was marked "4-wheel drive vehicles only". Apparently that area, while wet from the tides, is not packed down enough to support a car or, as I found out, a bicycle.
Packed wet sand poses an interesting physics problem. When it gets too dry it is too fluffy to support a car or bicycle. On the other hand, when totally under water at high tide, even the packed down auto lanes are too unstable to drive on. Conditions need to be "just right".
Well, the above photo was taken early Sunday morning, just an hour or so after the highest of high tide. The auto lanes were intermittently under water. The tide had receded a bit and the sand near the top of the beach was dryish but not packed down and the packed down sand in the auto lanes was too wet. However, after experimenting a bit, I found a narrow "Goldilocks zone" where the tide was receding and conditions were "just right".
I hope Congress and the President and the Treasury Secretary and all can do the same.