A Very Interesting Bus Ride

Floyd Norris' piece in the New York Times on Saturday October 18 on how voters see the crisis bailout, demonstrated with simple poll charts, makes clear that the public has failed to grasp the connection between "the banks" survival and their own.

A simple metaphor may help convey and clarify that connection in a way that more people may "get it."

Think of the present overall economic/financial situation as a BIG bus powered by a gasoline engine with the US population on board. The two ingredients that enable that engine to power that bus are gasoline and motor oil. The gasoline provides the energy to propel the bus. The motor oil lubricates the engine in order to enable it to run smoothly. If and when the motor oil gets too low, there is a real risk the engine may seize up and ultimately freeze altogether. And if the motor oil leaks out completely, the bus comes to a complete stop and has to go to the repair shop for quite a spell.

Well, our "real economy" or Main Street, is made up of all our factories, offices, farms, schools, hospitals, etc. and provide our jobs, incomes and purchasing power -- in effect, they are the gasoline for the bus engine.

Similarly our financial system, or Wall Street, which provides the money, or cash that enables all those factories, offices, etc. to pay wages, maintain inventories and generally pay bills to be healthy and grow is the motor oil which lubricates the bus engine to keep it running smoothly.

So we are all on this bus together, whether we know it or like it.

And then suddenly the motor oil begins to run low. The bus driver [the President of the United States] begins to notice the gauge of motor oil levels is falling rapidly. That is caused by our financial system beginning to choke on an extended period of over-borrowing and lending coupled with rapid declines in housing and commodity prices. So the bus driver spots a filling station coming up and heads in to learn more about the problem.

The attendants in the filling station [the Congress] started looking at the problem as the bus engine is still coughing and sputtering almost to a stop. The attendants had not had much experience with buses running out of oil because it had been over 50 years since they had seen a bus in such shape.

In the meanwhile the passengers on the bus [all of us from Main Street and everywhere] began to notice that the bus was getting behind schedule and the trip might take a lot longer than they had planned, so the water bottles and sandwiches they had with them might not last for the whole trip. Astutely, most of those passengers began to drink and eat less to make sure they would not starve before they got "there."

As a result they bought less water and sandwiches in the filling station shop. And, the owner of that shop started to worry about how he was going to pay his bills.

Finally the attendants in the filling station figured out the problem and started to address it. They put more gas in the tank [by creating an economy stimulus package] and refilled the engine oil reservoir [by creating a capital replenishment plan for the nation's banks].

And, then the bus engine slowly began to sound better and after some gnashing of gears the bus seemed to be getting underway again. At that point the passengers felt a bit better and started to sip their water and nibble on their sandwiches again. And the station shop keeper also breathed a sigh of relief.

That is about where we are today. It seems clear from the bus analogy that all the bus passengers probably are better off for having stopped at the filling station even though some passengers might have been hoping for more gas and less motor oil while others were the other way around. Perhaps that is what makes horse races!

In the meanwhile the stock market had gone down a lot, wrecking havoc with many passengers' 401ks and causing a lot of those passengers to cancel future bus trips. Then the folks that supplied the filling station gas realized that there would be fewer bus trips, at least for awhile, and started to lower the price of gas, which by itself became another stimulus for our real economy.

Finally, with a Presidential election looming shortly, with the prospect of a young, brilliant new President/bus driver most of the passengers began looking forward not backwards and began again to plan ahead again with hope and optimism.

So let's hope more people will think about today's situation in togetherness (bus) terms, not we versus them, because that state of mind cannot solve the problems we all share today. Norris was dead on to point out this problem. Acknowledging is a big first step. Now it must be addressed. Hopefully, if we all think about the bus we can make some progress.

Comments

[WorkingClass]

The bankers bribed the congress to look the other way while they robbed us blind. This ain't kindergarten.

[KillTheMessenger]

Nice analogy, except that in reality we are almost out of gas, completely out of oil, the bus driver is asleep at the wheel, we lost three tires, the windshield is broken and the police is chasing the runaway bus down the highway...

[rugbymom]

HuffPost's Pick

There is a problem with this explanation: If all of us start spending again like there's no tomorrow, running up credit cards, refinancing houses to cash out our remaining equity, etc., the whole situation will immediately become fragile again, and foreclosures, credit card defaults (the next domino), and bankruptcies will skyrocket.

Long term, people have got to live within their incomes. That means in the short-to-medium term, cutting expenses to match today's inadequate incomes, a recipe for continued recession. In the long term, it means incomes on the other 95% of the population have to rise, leaving less for the CEOs and shareholders. There is no way to avoid the question of equitable distribution of income.

In other words, just because the bus has more lubricant in it doesn't mean you can resume pigging out on chips and candy and soft drinks. The filling station owner would like it, but you still can't afford it. And there are an increasing number of people who can't afford water, sandwiches, or a bus ticket.

You also forgot to mention that when they stopped at the filling station, the bus driver came around and grabbed $20 out of each passenger's wallet to pay for gas and oil, on top of what they already paid for their tickets. And the bus driver used some of that money to buy himself an extra-large pizza and a large latte, which he consumed in front of the hungry passengers.