Disclaimer - Political content of this blog is pretty nigh nil.  Read on if you must.

The sun has set and I´m sitting in the plaza of a Spanish colonial town in Mexico.  Townspeople are walking about the beautiful plaza, crowned with a colonial era church, and dotted with lovely, and tall palm trees.  Children are playing and shouting and laughing with delight.  As I watch them, (my guess is they're 5-7 years of age), flowing from one side of the church to the other like waves lapping an elaborate stone shoreline, I´m reminded of summers of my own childhood long gone.  Their play resonates, reminding me of nights when as children, we tempted our fates by disregarding the ordained time to be home, in favor of one more game of kick the can under incandescent street lights.  In short, I find this all very charming.  It´s something I´ve not seen in an American town, (at least not without a bevy of mothers overseeing the play), for some time now.  I admit my experience may be a tad limited, and I´m not in the habit of hanging out by schoolyards and playgrounds.  Perhaps somewhere in some small towns in my country scenes like this play themselves out night after night, like re-runs of last weeks' cinema offering, were someone there to witness it.  I hope so.

Knowing the degree of control exerted over children these days, leads me to wonder what the long term effects of such regulation will be on personality development.  Perhaps I'm projecting.  I was never very good at´'towing the line' as it were.  I grew up in a blessedly less threatening time and was also blessed with parents who understood and fostered a sense of exploration in me.  When I consider some of the things I was more or less OK'd to do, if not encouraged to do so, I am sort of amazed.  I'm amazed at my good fortune to be born at such a time and amazed at my parents´lassaiz-faire attitude toward child-rearing.  I suppose to some extent, that too, was a function of that particular snapshot in time.

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I visited Guaymas, the ´big´town in this area of Mexico the other day.  There was a large group of protesters lining a city block outside a Scotia Bank. They were mostly middle-aged or elderly Mexicans who had lost all of their life savings when the bank fell as part of the collateral damage wrought by what Warren Buffett called "financial weapons of mass destruction," now known as mortgage-backed securities and collateralized debt obligations.  The thought of all those people losing their savings late in life got me to reflecting.

 
The difference between the Mexicanos I talked to today and US citizens and residents would be characterized by the Mexicanos' ability to focus on one bad guy, (Scotia Bank), while we in the US might not be so clear as to whom we should be picketing. Would it be the banks?  The derivatives/algorithm/math model boys of Wall Street?  The US Treasury? SEC regulators? The securities rating agencies? The sub-prime and alt-A mortgage originators?  The US government? Congress? People who took out exotic loans they had no hope of repaying? There's a lot of blame to go around. 
 
It strikes me as a fine line that separates us from those poor countries.  We in the US just have more to lose and more institutions to blame. Which in turns leads me back to wondering how all those whiz kids with their multi-million dollar compensation packages ´missed´this one.  Most people I know in economics have been talking about trouble in the mortgage sector and banks' over-leveraging for years. Warren Buffet spent several pages of his 2003 shareholder address describing the dangers of derivatives and how he was attempting to extricate General RE from them. Hank Paulson himself gave a speech in the fall of 2007 noting the troubled mortgage sector of the economy.  So I have to ask myself if it was not so much the opacity of the derivatives market as the willingness of all those geniuses on Wall Street to gamble with our money that led to this debacle. 
 
 

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