Wait, Wait, Don't Tell Me

Actually, I have one more economics-themed post that I wanted to include on the last one about inverted yield curves, but just didn't seem to fit there. This might actually have less to do with economics than it does politics. You decide. But I promise: discussions of which obscure old movies I've been watching from NetFlix are coming soon to this space. Get up for it!

At this point, I wanted to bring up quotes from the op-ed piece President Barack Obama penned for the Washington Post on Thursday. The full article is here (free registration may be required). Obama, naturally, was defending his administration's "Stimulus Package", which people have critiqued as nothing more than a pork-laden spending bill. Obama sounded a clarion call for action, trying to get some amount of bipartisan support from the GOP side of Congress, but here is what he said:

By now, it's clear to everyone that we have inherited an economic crisis as deep and dire as any since the days of the Great Depression. Millions of jobs that Americans relied on just a year ago are gone; millions more of the nest eggs families worked so hard to build have vanished. People everywhere are worried about what tomorrow will bring.

What Americans expect from Washington is action that matches the urgency they feel in their daily lives -- action that's swift, bold and wise enough for us to climb out of this crisis.

Because each day we wait to begin the work of turning our economy around, more people lose their jobs, their savings and their homes. And if nothing is done, this recession might linger for years. Our economy will lose 5 million more jobs. Unemployment will approach double digits. Our nation will sink deeper into a crisis that, at some point, we may not be able to reverse.

Now, I don't want to get too historical on you, but I fear Obama could slide down the slippery slope of sounding too much like Jimmy Carter did in the late '70s.

At this point, I would love to link to a YouTube clip showing the scene from an early episode of The Simpsons, when the townsfolk of Springfield were expecting the unveiling of a statue dedicated to Abraham Lincoln. Instead, when the drape was lifted, the statue was of Jimmy Carter (with the tagline "Malaise Forever" -- classic!), which of course created a town riot. Sadly, that clip doesn't exist on YouTube, but I can provide the actual Carter "Crisis of Confidence" speech from 15 July 1979, archived by the University of Virginia. Side note: who knew that when Bill Clinton used the line "I feel your pain," he was practically quoting Carter?



Economic recessions have everything to do with crises of confidence, of course. If consumers have no faith their jobs are secure, their buying patterns change radically. That is one reason why Hyundai's offer to buy back a new car purchased this year if the buyer loses his or her job is so revolutionary. As almost every other car manufacturer saw huge hits on new car sales, Hyundai's sales actually increased 14%. Consumer confidence levels are so critical to the economy, a dedicated organization exists to track them.

Consumer confidence was one factor why the economic crisis described in Tom Clancy's 1994 novel Debt of Honor was so realistic. Clancy understood that for a foreign entity to wreak havoc on the U.S. economy, all they had to do is sow distrust and fear of our economic institutions (like the financial firms on Wall Street) among the American people. The resulting crisis of confidence brought the American economy low, setting up the rest of the novel. Sorry, I don't want to play spoiler for anyone who has not read it yet.

FDR understood how important consumer confidence was during his first Inaugural address, in 1933, when he famously declared, "...the only thing we have to fear is fear itself." The U.S. was already in the midst of the Great Depression, and only by dispelling the negative cloud of uncertainty and fear could FDR lead the country towards economic recovery.

Getting back to Obama and Carter, President Obama will get his stimulus package approved eventually. There was word on the news today that Congress either already approved or appears ready to compromise on a reduced spending bill, one that totals a mere $780B price tag to future generations.

I just think that if Obama wants to help the U.S. recover from this recession in a timely manner, he will skip the doom and gloom speechifying. For heaven's sake, don't mention the possibility of 5 million jobs going away! He needs to leave the fearmongering to the MSM. They do a great job of that.