I know you’re all familiar with that name. Hoover lives in infamy in
U.S. history for having been on duty when the Great Depression happened.
You’re all courting a similar fate. Your collective behavior is setting
all of you up to be known as our generation’s Herbert Hoovers — the
leaders who were on duty when we entered our second great economic
None of this is easy and the economy will not be fixed overnight; it
will take years. But there is every chance it will get healed if our two
parties construct the Grand Bargain we need.But the more I read the papers the more I’m convinced that “we the
people” are having an economic crisis and “you the politicians” are
having an election — and there is frighteningly little overlap between
We desperately need that for two reasons: We need to do our part in
leading the world out of this crisis by stabilizing our own economy. And
we need to show that we can still act collectively. The toxic paralysis
in Washington is, in and of itself, slowing growth. It is keeping a
black cloud over the center of the country and creating a sour mood
wherein people just want to hold on to what they have. As one banker in
Dallas put it to me: “Today, you only hire someone when you absolutely
I don’t usually agree with Friedman but these comments in his article “Help Wanted – Leadership” are accurate. I wrote about the vaccuum of leadership in our government last week.
I think what a lot of people don’t understand is that the foundation of the economy and – much scarier – the SOCIETY in our country is based on is a flawed perversion of the original intent of the so called founding fathers. It is true that politics is and always has been a bloody vicious business but what is not true is that the members of Congress were “lifers” or at least 20-30 year jobs. This approach and reality has weakened the foundations of our government, economy and society because the focus of the member of Congress is keeping their job not improving and protecting the way of life in our country. It is “they are wrong” and everything a stage for positioning and posing. That is NOT what the job was supposed to be. Yes the economy is screwed up – and it needs to be fixed. I argue that the foundation needs to be fixed so it doesn’t perpetuate. Set modest, realistic terms of service for members of Congress. Second will be an adjustment of the compensation and benefits that they are paid.
Until corporations believe we have effective leadership in government, we will not see job growth. Until we have a Congress and President that provide real obtainable long term plans to right our country’s ailments, we will continue to see poverty increase, high unemployment and households & corporations unwilling to be optimistic about the future. When corporations and households are not optimistic sales are not generated, wealth is not realize and jobs are not created. We NEED effective, innovative, strategic leadership in government.
“More Americans were living in poverty in
2010 than at any time since at least the 1950s, with the overall poverty
rate climbing to 15.1 — a 6 percent jump in just one year — according
to Census figures released Tuesday.
The Census Bureau’s annual report showed
nearly 1-in-6 people in poverty, reflecting sustained long-term
unemployment and the failure of the U.S. economy to kick into gear
following a crippling recession.
The number of uninsured also edged up to 49.9 million, the highest in over two decades.”
Hey Obama! That is some horrendous CHANGE! Thanks a lot for nothing….
I honestly do believe what is happening has direct correlation to peoples’ (home, business, corp) perception and attitude about and for POTUS. In depitalism land, perception is a powerful mover of the economy and society.
In today’s WSJ there is an article titled As Middle Class Shrinks, P&G Aims High and Low. WSJ is now a subscriber access only to full articles so I can’t provide a link to the article because I read it on our internal news site. I can share what I found to be particularly insightful about our economy that is not usually so plainly and clearly stated. The following is direct quotes from the article.
In the wake of the worst recession in 50 years, there’s little doubt that the American middle class — the 40% of households with annual incomes between $50,000 and $140,000 a year — is in distress. Even before the recession, incomes of American middle-class families weren’t keeping up with inflation, especially with the rising costs of what are considered the essential ingredients of middle-class life — college education, health care and housing. In 2009, the income of the median family, the one smack in the middle of the middle, was lower, adjusted for inflation, than in 1998, the Census Bureau says.
The slumping stock market and collapse in housing prices have also hit middle-class Americans. At the end of March,
Americans had $6.1 trillion in equity in their houses — the value of the house minus mortgages — half the 2006 level, according to the Federal Reserve. Economist Edward Wolff of New York University estimates that the net worth — household assets minus debts — of the middle fifth of American households grew by 2.4% a year between 2001 and 2007 and plunged by 26.2% in the following two years.
To monitor the evolving American consumer market, P&G executives study the Gini index, a widely accepted measure of income inequality that ranges from zero, when everyone earns the same amount, to one, when all income goes to only one person. In 2009, the most recent calculation available, the Gini coefficient totaled 0.468, a 20% rise in income disparity over the past 40 years, according to the U.S. Census Bureau. “We now have a Gini index similar to the Philippines and Mexico — you’d never have imagined that,” says Phyllis Jackson, P&G’s vice president of consumer market knowledge for North America. “I don’t think we’ve typically thought about America as a country with big income gaps to this extent.”
“This has been the most humbling aspect of our jobs,” says Ms. Jackson. “The numbers of Middle America have been shrinking because people have been getting hurt so badly economically that they’ve been falling into lower income.”
This information confirms what I have been saying, we never got out of the recession and it is pointing to the reality that depitalism of the past is gone – at least for the foreseeable future. I put the qualifying remark on there because we all know that typically we learn nothing from history so we often repeat the same mistakes etc. That “said” the average citizen in our country has been impacted significantly by the practice of depitalism and its inevitable fracture. We will continue to see high unemployment numbers and little if any economic growth. This is the new reality – the new norm. Households have to identify and come to terms with this and make the necessary changes so that they can begin thriving – not in a # of purchases way but a well-being way.
Bernanke says American consumers are too bleak. That consumers “are depressed beyond reason or expectation.” Even considering everything that the American family is having to wade through the citizen is “behaving as if the economy is even worse than it actually is.”
The US economy is a model based on debt and unwise spending decisions which I refer to as Depitalism. What we have now is the infrastructure that requires the perpetuity of bad decisions in order for it to survive. What should be happening is the infrastructure being resized and realigned to wiser spending decisions > this is the too big to fail being allowed to fail and no more bailouts > the result when it all settles will be an infrastructure based on wise spending practices. The US is NOT a capitalistic society it is a mutated capitalistic society. It is capitalism with the addition of deficit spending and mechanisms in place that require such actions in order for the whole system to remain functioning. What governments, companies and corporations need to do is right size their organizations and processes to meet the new more reasonable spending practices instead of sitting by with their arms crossed, pouting saying “everything is ok”.