Actually, it turns out what is stupid is to try and write an article about the economy right now. As I prepared for our periodic Legal Update about a month ago, I wrote an article to follow up on my article last year, providing a primer on sub-prime mortgages and the affect that they have had on our economy. Fast moving events made my article almost immediately out of date. With the bankruptcy of Lehman Brothers and the bail out of AIG, I re-wrote the article, then the Secretary of Treasury, Hank Paulson, suggested a bailout of all institutions with troubled mortgages, and Congress began to consider the same. This time I threw away the article and gave up.
I decided that writing about such timely events in a newsletter that will sit around for six months, was, in a word….stupid. By the time this is published, Congress will have undoubtedly taken some action to help not only troubled institutions with questionable loans on their books, but also the individual borrowers with these mortgages.
The bottom line, like so many things in life, is……moderation. The free market does work, but not to the exclusion of all regulation. Going forward, we need appropriate government regulation to watch our financial institutions, and most importantly, to make sure that any institution that is dealing with the public’s money is fully and appropriately capitalized.
Thomas M. Wells is the Senior Partner of WJ&L, the head of our Business and Corporate Department, and works extensively on business and corporate, banking, real estate and land use matters. It’s the Economy….Stupid!