The Upside of the Downturn

Conservative pundits say we should feel the pain. Let the auto makers declare bankruptcy. If homeowners can't pay their mortgages, let the banks foreclose. Let the market decide. Let the weak die. The country has to be strong.

Emotionally callous, intellectual dishonest, the one modicum of truth in these statements is that there are stark realities to be confronted. We have been living beyond our means. We have buried ourselves in debt and false expectations. We are at the bottom of a sand pit. Unless we claw ourselves out, the sand will smother us.

We're told that the root cause of the crisis was the housing bubble. In the Clinton and George W. Bush's administrations there was a push to promote home ownership. For Clinton, this was the natural extension of the liberal idea that material advantages should be available to all levels of society, poor as well as rich. For Bush, putting more people into their own homes was good for business. Alan Greenspan accommodated by lowering interest rates, loosening regulations, and flooding the financial markets with cheap money. China facilitated the bubble by selling us affordable goods and propped up the system by investing in our debt.

Competition in the housing market pushed up prices which created equity, allowing people to buy what they couldn't really afford. The system worked well. We lived the way we believed we should. New cars, ever larger digital televisions, cool new cell phones... disposable income was fun.

When we elected Barack Obama as our president, we embraced his campaign of hope because eight years of George W. Bush and Dick Cheney had deadened our souls. Lies, misrepresentations, divisive politics, manipulated culture wars, hateful redefinitions ("healthy forests," "enhanced interogation techniques"...) had cut the country loose from its moorings.

America, it has frequently been said, is as much an idea as it is a place. Hard working, resourceful, dynamic, positive thinking, honest, democratic, generous, caring, strong, resilient, determined, expansive... That is America.

During the campaign, Obama offered a mirror that showed us what we wanted to be. Now that he is president he has the task of leading us to where we need to be. He tells America that the road ahead is difficult, that we will have to make sacrifices, that it will not be easy.

Now we are now at a crucial juncture. The world economy is threatened by deflation. Even resource rich Middle Eastern countries are feeling the pain.

Obama is trying to jump-start the economy with the stimulus package. He is trying to buy time for mortgage holders so they can avoid foreclosure. He wants to create new industries and markets to replace those that used to be our economy's mainstay but are now faltering.

The whole world is watching, hoping he pulls it off. And yet, we are not merely bystanders in this drama. We got ourselves into debt because we wanted what we wanted when we wanted it. Salesmen agreed with us that we should have a bigger HDTV for the Super Bowl. Banks wanted us to move into larger houses. Credit card companies flooded our mail boxes with pre-approved credit applications. Why wait to have your heart's content? Heaven has come to Earth in the here and now.

Today the new mantra is self-restraint. We may want a new digital camera, but can we afford it? What about a new car? Let's wait and see.

And yet we are in danger of scaring ourselves to death. Watch a day of cable news and you'll be afraid to leave the house. The economy is at risk of freezing over. Bankers don't want to lend because they're afraid people won't repay their loans. People are afraid of buying products because maybe they'll lose their jobs. Employers let employees go because they're afraid no one will buy their products.

Fear will endanger us as assuredly as unbridled spending did.

The new austerity doesn't have to be unpleasant. We can stop eating junk food and learn how to cook affordable, healthy food. We can buy what we need and resist the temptations created by huckstering salesmen. We can get back on track and prepare ourselves for the great challenges to come. The bottom line, we can't allow ourselves to give in to the enablers who would prefer us to see ourselves only as consumers and victims.

Obama will do his part. We have to do ours.

Comments

[kkayralene]

Like the bent of this blog...it is too true that we have overindulged in every aspect of our lives. I look at Obama and his ideas as a fizzly alka seltzer...­hoping for a heckuva burp...and speaking of scaring people to death one need look no further than Murdoch's new tactic of late. He had Glen Beck on yesterday talking about "What If "scenarios, stuff straight out of Madmax and Sanford's S.C. wettest of wet dreams...i­ncluding Narco States and civil unrest. This kind of activity by Fox and rw scaremongers needs to be outted and stopped. This thing had waivers of responsibility at every commercial. "We here at FOX aren't saying this IS happening, only it could happen, if of course we could get our bubba contingent riled up enough to break out their pitchforks and Budlite. I have never seen such ardent traitorous fomenting in my life. Check this mess out and write to FOX news about this bit of Chicken Little mouthbreathing from Glen Beck

[dadw5boys]

BEFORE YOU LET THEM DIE GET ALL THE PAPER WORK !!!!!!!!

Look for HEDGE FUND OWNERSHIP !!!!!!!

Then look at the mortages the bank bought !

WHO FROM ?

Is the SAME HEDGE FUND the BACKER of the PREDATORY LENDER who wrote the loans the bank purchased ?????

[jhNY]

As credit continues to contract, people will be living within their means if possible, as there will be no alternative, or they will die, as living will be beyond their means, and charity will be beyond the means of government to provide. Unless everybody goes on a spending spree all at once right now and saves the economy. Or something.

[altohone]

Your summary blaming the "bubble" neglects to mention the massive fraud.


I'm all for downsizing and living within our means, but let's not generalize to the extent that those responsible avoid the jail terms they've earned.

The criminal actions were largely responsible for turning a bad situation into a disaster.

[thepianodiva]

That's right. It's not exactly right to blame the citizenry of this country as those to blame for where we find ourselves. This catastrophe was dreamed up at the top and "trickled down" (maybe that's what they meant by it) to the rest of us. Those ideologues, schemers, dreamers, and greedy don't get off the hook that easily.

[tompoe]

Had it not been for the recession, I might not have found the NO KNEAD BREAD videos on youtube. The recipe calls for flour, yeast, salt and water. The ability to eat the finest bakery bread for a fraction of the price of a loaf of store-bought bread is easy to acquire. I now know that when I go to the old soldier's home to finish my days on earth, I will be able to keep supplies under the bed, and all that's needed is to convince the nurse to run the bread down to the oven and back. Life is good.

[jhNY]

What makes you so sure the old soldiers home will still be around when you need it? The assurances of your elected leaders?

[jbusch8]

well said,

its a double edged sword.. we most definitely have to be careful with our money these days, as no job or accumulated wealth can be assumed, but in order to get the economy moving, we have to be willing to take finincial risk - take out loans, buy new products. Yet all we hear about is FEAR FEAR FEAR.. dont spend money because you don't know when you'll lose your job! don't take a loan out because you might lose your job and be covered in debt!

with a failing market and a scared general population, whats it going to take to get this thing moving again? This is why I think the stimulus was whats needed for right now. The stimulus will create so many jobs so quickly - hopefully this will restore some consumer confidence and get banks lending, and consumers taking loans again.

[bobwalters]

Unfortunately, if the "recovery" takes us back to the same old consumerist economy, we'll be in an even deeper pit in 5 years than we are today. We've got to figure out a saner, smarter, more sustainable, and more humane economic model than the rampant consumerism in the years since WW II.

[HeevenSteven]

Funny how conservatives expect the worst off to just pull themselves up by their bootstraps; get government out of the way. But let some two-bit dictator complain about leftist guerrillas or some other abstract threat and we'll rush boat loads of military aid to their rescue.

[CaptainObvious]

They hate us for our freedom.