Consumers must be the answer then. They will buy us out of this recession. If there is a way for our leaders to cause this to happen in an election year, they will do it. So far, however, there's no sign of success. As consumers we all seem to have caught on that times are tough. We're being cautious, even tight. For the individual, that's good thinking. For the economy, it is no help at all. The news stories about the recession - it's on, it's off, maybe yes, maybe no - sound a lot like coverage of a sporting event; perhaps an automobile race, with one car and then another pulling into the lead. The race proceeds according to its own logic, largely uninfluenced by anything else.
Considered from this vantage point, not only is the recession on, it is very much produced by specific events in the rest of America and indeed the whole world. Discussions of hidden mechanisms causing the business cycle, driving us down and then up, don't apply this time.Huge chunks of our economy aren't working right, and the whole of our economy won't be right until these parts are fixed. Consider the obvious:
- Insurance companies. Huge ones have failed, and others may be in jeopardy. We are supposed to be reassured when told most of the cash value of this policy or that one should be available, though there may be some delay. This is not normal. John and Mary Citizen, who have never had to worry about insurance policies, now find themselves wondering. Yet we have not buckled down to putting the situation right.
- Deficit. Next year's, if I haven't missed a story, is now predicted at $360 billion plus. That's two or three times as big as when we thought it was a national crisis. It's still a national crisis. The effect, whether we choose to acknowledge it or not, is that Americans are getting poorer year by year.
We know how to tell Third World countries to deal with this sort of thing, but our own response continues to be nil. The result of this inaction will be painful for us all, though when we finally are forced to recognize it we will likely blame some poor politician who is not yet even a candidate.
- Banks and thrifts. We're tired of hearing about them, but not because we have dealt with the problems. We could actually do something interesting with the billions and tens of billions of dollars we are spending to keep the banking industry from collapsing. We seem to be willing to pay the cost but not demand the cure. Strange.
- Unemployment. In routine economic downturns, unemployment is a statistical report that affects somebody else. Increasingly this one is hitting home. People are keeping poor jobs because they can find no others. Grown children are moving back home. Good, presentable job candidates are spending months looking for work without success. These people, these families, indeed our nation will not regain the productive work these people would be doing in a healthy economy.
Let us pass lightly over the debt America's businesses picked up over the last 10 years, though it is still there, draining the profit that should be reviving businesses. Also let's not stop, though the problem has not gone away, on the empty office towers in nearly every city in America. Everybody knows about that.
If "the cycle is bottoming out" isn't going to make things better, what will?
Some talk of other world economies pulling ours along. While traveling in England and reading the European papers in recent weeks, it was distressing to see them hoping for us to be their salvation. Even Japan, when things got rough for a couple of months, looked to us for safe investment.
Consumers must be the answer then. They will buy us out of this recession. If there is a way for our leaders to cause this to happen in an election year, they will do it. So far, however, there's no sign of success. As consumers we all seem to have caught on that times are tough. We're being cautious, even tight. For the individual, that's good thinking. For the economy, it is no help at all.
The worst news in all this is how far we seem to be from recognizing and dealing with these problems. "We will pull out of it,' " you hear over and over again. Let's hope I'm wrong, but I don't believe that's going to do it.
The best news is our incredible underlying strength - the greatest the world has ever known. We have smart people and systems that work. We have machines and energy. It is getting to be time also to remember that we know how to deal with tough reality.
(Andrew Barnes is editor, president and chief executive of the St. Petersburg Times.)