Kass: Time for Change

This blog post originally appeared on RealMoney Silver on June 30 at 7:48 a.m. EDT.

As an investor and as an American, I am disappointed.

I am particularly disappointed in the general inability of The Four Stooges of 21st Century Finance -- our executive branch and now add legislative branch to the mix as well as our leaders in the Treasury and the Fed -- to accomplish the following tasks:

1. to identify an emerging problem in derivatives;

2. to propose, launch and engineer bold initiatives to counteract the depression in housing; and

3. to reduce our reliance on imported oil.

As Tom Friedman wrote in the New York Times on Sunday "My fellow Americans: We are a country in debt and in decline -- not terminal, not irreversible, but in decline."

I fully recognize the role of free market capitalism and the responsibility that lies in the private sector, but I am equally conscious of a small cabal of investment bankers that poisoned our financial system with toxic, unregulated and unwieldy derivatives (especially of a mortgage kind) -- the growth of which was fostered by the complicity of ratings agencies and was neglected by governmental authorities (until it was too late).

That having been said, our nation's financial rebuilding must start with bold moves, not in vilifying short sellers and speculators. On the housing front, a bipartisan Marshall Plan for housing continues to get dragged down by partisan politics. Importantly, we also need an intelligent, effective and timely energy policy, as the elevated pricing of energy products is now universally at an economic tipping point. (This is something that economist Ed Hyman mentioned in his weekly conference call last week.) Congress and various Administrations have had 40 years to develop a sound energy policy. They have failed. Arguably, they have barely even tried.