Thursday, July 26, 2012

These Angry, Mad, Crazy Economic Times


Scandals here, scandals there, scandals everywhere!

It is hard to find a financial institution today untainted by scandal. I have to wonder if this is a modern phenomenon, or the continuance of a common thread in our society. In better economic times we do not pay a lot of attention to the shenanigans of the big financial guys. They do their thing and we go about our daily lives. 

It is easier to make a lot of money in good times than bad. Problems can more easily be swept under the rug, hidden, made to disappear when the economy is soaring. Bernie Madoff pulled the wool over investors’ eyes for years. As times got tough and tougher, his time and his options ran out. The list of investors willing and able to give him money so he could pay other investors shrank. His house of cards collapsed.

Difficult economic times make it harder for financial firms to make big bucks, opening the door to less oversight and a willingness to take more chances.

Economic Booms and Busts

During flush times everyone wants their piece of the pie, whether unions, public employees, politicians, workers or corporate big shots.

As the economy worsens the top guys make the big bucks as they attempt to maneuver their corporate ship through difficult waters. Usually, however, this is accomplished at the expense of employees performing the everyday work of running the company. Massive layoffs and givebacks do not result in positive employee morale.

The economic history of our country is one of economic booms followed by busts. Before the Depression of the 1930s there was a series of Panics in the 1800s. Some were short-lived, others lasted years.

Life Goes On…

Americans have short memories. The good times of the 1990s fed false promises of lasting good times. But the good times turned sour. Is there anyone unaffected by the financial crisis, Great Recession, dismal job market and mortgage and housing disaster of the past five plus years?

Financial corruption may continue, there will inevitably be another scandal, people may (or more likely will not) go to jail, but life goes on. At some point – we probably will not realize when – the economic picture in the country will change for the better. We will be able to pinpoint that time in hindsight.

The Political Perspective

I believe harsh political pressures over the past few years skew our view of what is really happening in the country. The opposition (a.k.a. Republicans) declares the situation absolutely horrible, refuses to concede an inch on any issue, and hammers the public continually with their mantra of doom.

Consumer attitudes, confidence, and sentiment play a big part in how we see our world, spend our money and plan our futures.

If we believe the housing crisis persists, we will not buy a home.

If we believe our job is in jeopardy we will not spend discretionary dollars. We may not go on vacation. We hoard our money in case it is needed.

If we believe things are improving, or at least not as bad as the doomsayers suggest, we breathe a sigh of relief and spend a bit more. Take that vacation. Go shopping. Plan ahead with a sense of optimism and not foreboding.

The situation is worse during election and campaign periods. And it seems Republicans have been campaigning for four very long years.

I expect if the Republicans win the White House, all their dire predictions about the sky falling will stop.

I hope if the Democrats win Republicans reconcile themselves to four more Democratic Presidential years and work for a better economic future for everyone – sooner rather than later. Blocking everything an opponent suggests, whether philosophically acceptable or not, results in gridlock, deadlock and a standstill – politically and economically.

Whoever wins it is time to move on and move forward.

Here is a wild idea. Require a quiet period after elections. No politicking. No talking heads ranting against everything the opposition suggests and vilifying politicians.

Because before you know it, election season arrives and the acrimony level quickly rises once again.

I will raise my glass on Election Eve and offer a toast to political sanity and economic resurgence.

I can dream, can’t I?

5 comments:

  1. Yes, I appreciate your perspective on the times. I was so distressed after the Supreme court upheld 'Obamacare' to hear that Congress would go ahead and make their thirty second attempt at overturning it anyway. There has to be other important business that is being sadly neglected.

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  2. The problem isn't capitalism, its crooks. Unfortunately, crooks come in both parties.

    I believe our economy needs some regulation, unfortunately, the boys and girls in our federal government (Executive Branch and Congress) never met an aspect of our economy they didn't want to regulate. And they don't understand the concept of "sunsetting" a law or regulation. Hence the mess and mass of rules that strangle the economy which is supposedly "free." Dianne

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  3. In some countries (France is one) they require all politicking to stop several days or a week before the election. Wouldn't that be wonderful? Giving voters a time to reflect without screaming horrible ads...

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  4. I'm avoiding political talk. I've made my decision. I think elections bring out the worst in us.

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