Historic changes are rattling this country to the core. Rising economic fear, a reordering of global power, an assault on trust, the energizing promise of new leadership -- all are coming together to reshape the future and alter our expectations.
This is the first in a series of columns in which I will look at how we will emerge from an uncertain and unsettling time to offer my thoughts on who we'll be.
I was talking to my 16-year-old daughter the other night about the barrage of unsettling economic news.
She asked: "Are we going to be all right?"
I wanted to tell her that we have seen this before, that the government knows how to fix these things, and that in a year or so, it will all be back to normal.
The problem is that we haven't seen this before, the government doesn't seem to know what to fix it let alone how to fix it, and there is every reason to believe that normal is a whole new place -- and we won't know what it is until we've spent some time there.
So the best I could do is say: "We're all going through a very difficult time right now. We have a new team of leaders coming in. They are already working on it."
She didn't press. Good thing -- because that was about all I had.
Actually, it's all any of us have.
Some of the unanswered questions are immediate -- as in, how to keep the financial system from exploding in a shower of nightmare scenarios.
Others play out longer.
Sure, we've seen people hijack the system before. In the 80s they swapped inside information about companies they were about to plunder. In the 90s, they continued to tout the new economy even as the realities of the new economy were throwing sand in the gears of a system that promised the end of downturns.
This is something different.
This isn't twenty-something Silicon Valley celebrity executives losing their Porsches. This is the third generation Buick dealer shuttering the showroom. This isn't a glut of mansions on the market in Greenwich. This is people who finally got their fenced in back yard and a dog for the kids going back to the apartment. This isn't the loss of a bonus. This is a comfortable retirement earned over a lifetime decimated in a matter of months.
The professional seekers of silver linings will find their positives.
This had to happen because we were living beyond our means. This will recalibrate a value system that has somehow equated worth with wealth -- where we spoke with pride about the size of screens and numbers of toilets.
But all of these hopeful notions of recovering our souls and rediscovering our values seem to have an air of temporary penance about them. We did stupid things. We did short-sighted things. Some of us even did illegal things. But we've learned our lesson, and next time -- we'll get it right. We'll get back to where we were -- just like the 80s, and just like the 90s.
But it is becoming increasingly clear that we may not get back to where we were for years. Some say that by the time we get back to where we were, it will no longer be there.
In a recent New York Times article economist Ben Stein said: "... we know from observation that an industrial economy can run well below capacity for a long time." He concluded that "This whole thing is not guaranteed to end in smiles." Or as John Maynard Keynes put it much earlier: "the markets can remain irrational longer than you can remain solvent."
The generation moving into retirement has had a peek or two at the abyss, and they have seen the country bounce back. A new generation, by historical standards, had an incredibly benevolent run.
Both will be tested. We will come out of this, but we may come out diminished and disappointed. We're a country that has an abiding sense of who we are. How we handle what is ahead will tell us who we'll be.
We need new values. "Share and share alike" is how we will dig ourselves out of this crisis and businesses, made up of folks like you and me, must decide that keeping people employed is a worthier goal than pay raises and bonuses. Put pressure on your executives to roll back their salaries and if your company announces layoffs, offer to work fewer hours for less pay so your co-worker can keep his job. Buy American and share what you have. Be compassionate to those who have lost their homes and their livelihoods. These folks are suffering and they need our help, not our judgement.
And aren't the auto companies a little embarrassed to be begging? Where is the pride?
And why should I help people who took on mortgages for way more than they could afford so they could live in huge houses they don't need, while I have lived in a tiny house and paid off my debts?
I always say: "Never look for logic when politics are involved." I think that's got to be the reason.
To make my comment I'm going to cite part of one of your own: "The problem is that we haven't seen this before, the government doesn't seem to know what to fix it let alone how to fix it,
I see comments like this all over the web....and whether you know it or not what you are saying, unconsciously wishing for is an entire new government leadership....because you are absolutely right.
Not one of these current clown in our congress or even our state legislatures, democrats and republicans alike, don't have a clue of how to do a single thing but spend spend spend, like spending was THE panacea!
We need government representatives that will run this nation as they would their own homes and lives, with responsibility and accountability which we defintely DO NOT currently have.
We do know that the fundraising they do , and the "deals" that they make, all compromise their ability to keep their values and principals when trying to run this government.
They all need to be more responsible to "main street"...the people who elected them. And be totally accountable for their actions. I guess that would occur only in a "perfect" world and we have fallen so far from that "Idea" that it does not seem possible today. Perhaps in the distant future.
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Peggy, perhaps you are hedging your bet to protect your daughter or yourself from actual dread. For many, this will likely go considerably beyond "disappointed".
Our nation came out of the Great Depression of the 30's didn't it.....all it took was ten years of strife and starvation people today cannot even imagine, plus four long years and millions of U S soldiers lives lost due to our national involvement in a second world war.
If that what it takes "to come out of it" again...you can have my share of it.
I have a MS degree, a good job, a nice home and car. My wife and I make an income that 10-15 years ago would've funded a pretty plush lifestyle. But as too many of you know, salary growth in the US hasn't come anywhere near keeping pace with increased costs of living. Every raise I've gotten for the last 5 years is wiped out by increased health care premiums. My world in terms of travel, entertaining, luxuries, etc. gets smaller every year. Now, its work 2 weeks, pay bills and buy food and gas, and wait another two weeks and hope nothing goes wrong. I haven't traveled in years. I gave up microbrews and developed a taste for Budweiser. I have full health coverage, but I can't afford to pay my $300 annual deductible, so really, I only have coverage for emergencies. When I need a new pair of running shoes, a new round of personal economic planning goes with it.
But, I'm not complaining. I don't have a need to go around gobbling up the planet to pad my fat ar$e. I'm enjoying watching the mega-scale changes -- it's very interesting. The roots are many -- global, national, local. But, every time I see someone across a counter from me who is probably making $8 an hour and can't take a leak when they need to, I wonder how they make it.
It was not the worker that failed the corporations but the reverse. The board rooms of the world need a good cleaning.
Fail to take care of it's people. Enrich the rich at the cost of the poor, and middle classes. And ultimately come crashing down.
It's greed, when the executives make 400X or 4000X what their lowest paid worker does. It's sin, for lack of a better word.
When stockholders profit because jobs get exported overseas, it's sin. Sin against your fellow American.
retail sales as a measure of how we're doing, and substitute a Gross Happiness
Index which instead would measure how many hours we have volunteered,
how many hours we have spent outdoors with our children, and so on.
I'd wager for a lot of Americans right now, of the ones who are lucky enough to still be working, their hours spent volunteering and their hours spent outdoors with their children are approaching zero because they can't afford to put in the time doing anything other than working.
One can only assume that you are one of the financially privileged if you would make such an out-of-touch comment, and I don't begrudge you that--particularly since, given your sentiments, I assume you DO volunteer and put your means to good use, and thank God. But under the current circumstances, your rosy view borders on insensitivity. It's hard for people to tally the hours spent playing with their kids when their waking hours are spent worrying about how to feed them.
Say you hold a $200,000 loan and you leverage it 40 to 1, you have 8 million play money, and you loose it. You go to the government and ask for 8 million.
People knew all that but they looked the other way. Do you think only your 4 year old needs a nanny? All those "financiers" need a nanny, too.
What is new is the realization of how much we depend on the well being of the average person, who has been neglected for a very long time.
Brilliant!
The problem is the Magnitude of "TOXIC" Products these Bankers produced while unregulated. So far Paulson and Bernake have PUMPED in $7.7 Trillion into the Banksters hands, who created this Crisis.
The problem is the Banksters may have created from $100 to $500 Trillion in "TOXIC PAPER". The gains from this were taken by the Banksters in EXCESSIVE FEES and $100's of millions in incomes per Executive and $10's of millions per lower Level Employees of these Banks. Resulting in probably Trillions extracted by the Richest People in the World from the Economy.
America does not have $100 Trillion to cover all the "TOXIC" waste these Banksters created and have on there books because people stopped buying it with the housing crisis. So this may be too much for our systems to handle.
It is amazing that an Administration in collusion with Wall Street were able to create such a Magnitude of "TOXIC" waste in just EIGHT YEARS! It shows what can happen when Banksters are not CONTROLLED by a President who Allows Regulations to go unenforced and allows new TOXIC Products to be issued without any Evaluation.
Millions are out of work, and millions more are under-employed. The average Retired person has seen 60% or more of their RETIREMENT DISAPPEAR! Foreclosures are at a Lifetime High and Homelessness has increased in record amounts.
6-8 years to recover from.