Right Direction?

Perhaps it is just my simple mind, but I keep thinking that trying to merely right the ship and add a few more crew members to monitor the sails, isn't going to create a healthy economy.  But it seems that is the direction the Obama Administration is taking.  It is their hope, through guaranteeing private investors buying up the so-called toxic assets on financial institutions ledger sheets, and by adding more regulatory authority, more referees if you will, that the same markets that got us into this mess will get us out of this mess.

While I am all for innovation and creativity, I keep wondering whether those attributes are a good thing in the financial sector.  It seems to me that every boom and bust we have had during the past two decades have been caused by reckless innovation in the financial markets, whether it was using leveraged money to come about with whacky ideas for Internet marketing during the dot.com boom and bust, or whether it was the slicing and dicing of mortgages and other debts (consumer credit, student loans, Lord knows what else) into securities that were sold, insured, and leveraged more times than probably anyone knows, it seems the financial industry's creativity knows no bounds.  While that may be fine and good if they are gambling with their own money, their own retirements, their own homes, it's not good when it is playing with teacher's retirements, a janitor's home, and deposits in a bank.  

I keep coming back to a more holistic view of economy.  That is, we can not continue to rely on selling services.  Over 70 % of our economy was about consumer spending.  And what we exported became the Lords of Wall Street, financial services and the related businesses such as lawyers.  In order to create something fundamentally sustainable, to avoid these huge, massive, booms and busts, it seems to me we need to reign in the financial industry's creativity and develop more production of stuff, things other people will buy, here and abroad.  

Stocks and securities must be about long term investments in companies that are, to use an overused word that essentially has no more meaning, transparent.  We should invest based on profit and earnings, not some wild idea that goes public, makes a few kids under the age of 30 millionaires and later goes bankrupt leaving retirement accounts empty.  We should not allow mortgages and credit card debt to be traded like baseball cards, but rather the lender assesses the risk and holds the card.  It's the only way loans can be made responsibly.  

Until we all learn how to behave I think righting the ship isn't enough.  We need to come to shore, get off, and learn how to sail, safely.  In the meantime, to join the world economy, we need to stop being the consumer and begin, again, to produce.  We can not continue being reckless in our consumption, ruining other countries as we binge on buying cheaply made crap.  

These changes are to the very core of an economy.  It's time we realize the fixes will be an over haul.