Yeah, I’m worried! Social and political inertia is incredibly strong in our culture of sound bites and quick solutions…the urge to return to a normal life after a near-fatal illness can lead us to take additional risks where a relapse is highly probable and very dangerous. While numerous voices are signaling their warning, I don’t see or hear any coordinated message about this from the Obama Administration, or the Federal Reserve Bank, or the Congress, or the business media. It appears to me that the public is still just experiencing the Great Recession on an intellectual basis, rather than feeling any real pain…yet. I’d love to be wrong about this, but it appears that we’re dead-set on inflating a new bubble so things can be ‘normal’ again.
Here’s Paul Krugman’s NY Times blog yesterday: “Just a quick note: is it just me, or has the economic news started to darken again? Up through about March, every report was worse than you expected, often worse than you could have imagined. Since then, most reports — although continuing to be bad in an absolute sense — have “surprised on the upside.” But my sense is that in the last few days we’ve been getting reports — Korean trade, Japanese orders, German exports — that are once again surprising on the downside. This thing ain’t over yet.”
Here’s an excerpt from today’s NY Times Editorial on the decision of the Obama Administration to allow many large banks to repay a combined $68.3 billion in bailout money: “Clearly, the way the banks see it, last year’s bailouts meant unwanted public scrutiny and salary restraints, so paying the money back frees them from those burdens. That bodes ill for regulatory reform. The compensation they seek to protect was based in large part on the risky practices that brought the system to the point of collapse. It stands to reason then that if colossal pay and bonuses continue, so will recklessness.”
We’re nowhere close to the end of this economic train-wreck, but the banks and the Obama Administration seem to be on the same message: they want to put Wall Street right back where it was before the crash…with the exception of some carefully negotiated ‘reforms’ where the bank lobbyists have significant influence in the writing process. Sadly, it appears that we have the wrong people in charge of negotiating for the public…they don’t really believe yet that our economic system needs a serious overhaul…and they have too many friends and former colleagues in the financial sector. It makes me nervous when many of the people who helped to create the crisis are celebrating ‘reform’ decisions.
Unless the public demands a full investigation into the economic meltdown before reforms are decided, forces are in play now to simply inflate a new bubble. Here’s another perspective that’s highlighted in many books and articles that seek to understand our 25-year march into the Great Recession. Many believe that we never really recovered from the 1992 recession. Not really recovered. All we’ve done is float a series of bubbles and make things look like they’re prosperous, while most people have been lucky to keep their heads above water. As several recent voices have pointed out…if it weren’t for Wal-Mart’s price suppression, the public would have a much clearer understanding of some much deeper economic dangers that are looming just under the surface of the statistical haze. The Federal Reserve doesn’t control inflation…Wal-Mart controls inflation. Our biggest problem is that there’s lots of inflation in our domestic and global markets that Wal-Mart can’t control.
Job losses are only really just starting…school districts, cities and counties are desperately slashing jobs to stay afloat. When all of these cuts are made and the economic consequences of steeply rising unemployment and increased under-employment with more part-time positions and furloughs become reality, that’s when everyone will ‘feel’ the Great Recession. We are in the eye of the hurricane and the next phase is about to hit…and it’ll hit next with the strongest and most devastating force!
Yeah, I’m worried! I’m worried most that we appear to be willing to let social and political inertia make our most critical decisions. As the local damage grows in the next months, I’m hoping that our deliberative communities across the country will decide to step into the public square with opportunities for conversations about reforms that are grounded on carefully researched analysis and on true transparency in public problem-solving. As you might be able to discern, I believe some of the dilemmas uncovered in the economic crisis are actually at the hub of multiple issues…how we face reality, how we investigate carefully, how we talk with each other, how we discover together our foundational values, and how we defy inertia to create long-term solutions that satisfy our basic needs.