All indicators are that the American public is becoming more and more nervous about the present economic situation and the seeming inability of government at both the state and local level to put in place programs designed to make things better. In the space of only a few months we have moved from talking about an economic “downturn” to a recession to an “economic meltdown.” Now a few brave souls are beginning to use the “D word,” a depression.
Unemployment is up, as is the savings rate to an unprecedented high in the United States. We seem to be experiencing a “crisis of confidence” in our leaders and our economy and we are now seeing what the economist John Maynard Keynes referred to as the “paradox of thrift.” As people become more worried about the economy in general and their own economic security in particular they spend less and save more.
As this happens more frequently, the economy goes into a downward spiral: People buy fewer goods, producers and retailers sell fewer products, and corporations, seeing their profits turn into losses, cut back operations and initiate layoffs. These are then highlighted in the news and people, even those who are not economically challenged, become more fearful and save more and spend less. And on it goes ever deeper into mass psychological depression, which leads to economic depression.
The best cure for such a psychology of fear is a government which can reassure people that things will get better, that they need not hide currency under their mattresses, and, most important, that our leaders know what they are doing and have matters under control. That is precisely what government leaders across the United States have not been doing.
Day after day our leadership tells the media that they don’t know what is wrong, don’t have specific solutions to identified problems, and continue to put politics ahead of real analysis and practical solutions. How does one convince the senior members of our government that telling the American people that they don’t know what they are doing does not build confidence? When do the Democrats and Republicans figure out that endlessly fighting with each other simply makes matters worse?
After 9/11, both political parties came together, as they did after Pearl Harbor. In both instances, our leaders realized that our nation faced threats to its very existence. How long will Congress continue to bicker, continue to frighten the American people rather than restore confidence? The threat to our national existence today, I would suggest, is just as great as it was on Dec. 7, 1941 and Sept. 11, 2001.
Tough times require that our leaders start acting like leaders. The American people are growing tired of scattershot programs in which the corruption seems greater than that which we deplore in Iraq. The New York Times this past Sunday reported that the oversight committee on TARP, the great “stimulus” package designed to improve credit flow through bailing out banks, grossly overpaid by tens of billions of dollars for troubled assets. Are the people in charge in Washington complete crooks or simply idiots?
There is no more time for the governmental escapades we have been seeing over the past nine months. Millions of Americans are suffering. More lose their jobs each day. We have a new president and a new Cabinet. The time for partisan politics is past. Our new leaders need to speak frankly and intelligently. They need to speak forcefully. And they need to make sure that what they do works.
We cannot tolerate any more mistakes, any more corruption, any more partisanship. Our leaders need to restore faith in themselves, their honesty, and their competence. Time is running out.