Misplaced priorities

This week marks the one-year anniversary when many of IU’s students found that their plans for life beyond college were being challenged and, for many, completely changed.

That’s because one year ago this week Lehman Brothers and AIG suddenly collapsed. The economic events during the past year were earth shattering. 

They challenge very basic business philosophies on how our economy should function, how individuals invest and even brought up questions of whether entire industries should even exist.  Not to mention our country will be paying off the debt related to this crisis for decades to come.

They set in motion a year full of credit freezes, bankruptcies, bailouts and most importantly to students, job losses.  

Last year’s graduating seniors found that they were entering one of the toughest job markets in recent history. BusinessWeek reported that the 1.5 million college students graduating in 2009 are competing with more than 1.8 million degree holders who are already unemployed.

This has not only made finding a job extremely challenging for Indiana graduates, but also has materially lowered entry-level salaries for those lucky enough to find work.
As for current students, we have been forced to sit, wait and hope that the economy will turn around fast enough so that we are not left facing the same dire circumstances.

Because of the magnitude of this crisis, common sense would seem to dictate that fixing the economy and re-evaluating current regulation would be at the top of our country’s priority list.

However, on this one-year anniversary, we find ourselves stuck with a stagnate economy, rising unemployment and a financial system being run with the same regulations that guided it before the collapse began.

The bailouts this past year resulted from the government’s belief that these failing companies presented systemic risk to the economy and were ‘too big to fail.’ One year later, we still don’t have criteria for what defines a company that presents systemic risk, despite the massive amount of bailout money already spent.

The true goal of financial regulation should be to contain the damages of future economic crises to those companies who cause the crisis, thereby eliminating the need for future bailouts.

However, without criteria for defining these high-risk companies, it seems unlikely this reform will be achieved successfully.

Even more troubling, the Obama administration seems to have shifted its focus away from the current economic problems, choosing to spend most of its political capital on health care reform.

Why is an issue affecting every American being put on the sidelines? Why is Obama demanding we upend our whole health care industry as quickly as possible when that causes distraction from more crucial issues?

Considering this is the worst recession since the Great Depression, the single-issue focus on health care defies logic.

Despite Obama’s stated mission of ending politics as usual in Washington, he is in fact playing that game. By diverting our attention to health care, Obama has been able to kill off all criticisms relating to his questionable stimulus package, the staled economy, our mounting debt and the inevitable tax increases coming in the near future.

America didn’t send Obama to Washington to duck and dodge tough issues. He was sent to confront them head-on and guide America to a prosperous path once again.
One year later, we have made little progress fixing our economy and are no closer to the reforms truly needed.

 As a senior preparing to enter the job market, I would have hoped Obama would have addressed these issues with the urgency they deserved.


E-mail:  mjgorman@indiana.edu