A key to economic recovery you won't hear much about but should watch for...

Accountability. That’s it.

It is a key driver to our economy. So where are we now? For the last few years we have been in a world of little to no accountability. Until we hear language that is restoring accountability expect little to no real recovery.

So what will signal accountability? (note: For the overly partisan who may read this note that many of these ailments have been pushed by both parties. )

- As long as the government is trying to either stop foreclosures or puts a moratorium on them the housing market is shot. Prices must go down and inventory must switch hands. Until we stop the notion of keeping people in houses they cannot afford we are in trouble. So this is a key piece of language.
- Until the government fesses up to its to its role in the financial crisis we have no chance of undoing the problem. That means we got problems until you hear everyone
o Recognizing the poison that the Community Reinvestment Act plays a huge roll in setting up our current situation. Not the concept behind the act but how it has been given teeth and been abused
o Stating that our implied guarantees through Fannie and Freddie caused a huge part of the moral hazard. And our collective unwillingness to remove to guarantee OR discuss the risks was a failure of government
o Pushing for homeownership as a right is destructive (see above)
o Changing the banking capital reserve standards to a formula (BASEL II) instead of a ratio was a mistake
o Acknowledging The Graham Leach Biley act in 1999 set up huge parts of the problem
- As long as we here of the concept of “too big to fail” or how we govern that we are done as a growing, innovative economy. Pushing these ideas destroys the powerful and necessary force of creative destruction
- As long we try to prevent people from owning their own health care responsibility we will be destroying a huge segment of our economy. Not recognizing that Medicaid needs to cut service levels, Medicare and Social Security needs to move the age of eligibility to be continually indexed with life expectancy are examples of not being accountable to our decisions. If we hear the opposite language that is a positive, directional indicator.
- Until the government starts talking about budget surplus we are not owning up to the national risk of our debt and deficit spending. This is a toxic time bomb in our economy we have to deal with.
- We cannot protect people from themselves. If the consumer protection agency that is being is being proposed goes through you will see a destruction of economic engines in our economy. You cannot protect people against bad decisions – just fraud. Those laws are on the books already. We are now trying to regulate for lacks of judgment. Game Over. It is wrong when we do it in the social world and it is wrong in the economic world. You cannot have it both ways.

Until we see a language of accountability in our economy we will not grow. And yes this means failure, but failure does not mean loss. As long as we hold our economy and individuals from the responsibility of our choices we cannot recover long term. And unfortunately I see another 2-3 years at least of this language. So expect a second recessionary dip and little job recovery of a permanent nature until we all start hearing the language and actions of accountability.