How many times does a forecaster have to be wrong before people stop listening? Even though we know the sky is not falling, throughout the developed world, people are behaving as if the end is near. There is such a lack of confidence in the future that the economy has almost come to a grinding halt. Government attempts to stimulate growth have failed beyond all expectations and our political leaders are out of ideas. Extremely low tax rates, the lowest interest rates in modern history and massive stimulus spending by governments have all failed to stimulate growth. Today all I hear is politicians calling for more of the same. And the one coarse of action that might create a little confidence (reaching a compromise on reducing the deficit) is the one action they refuse to consider.
In my opinion, if you are expecting our politicians to get us out of this funk you are going to be badly disappointed. And we only have ourselves to blame. We put them in office. With no confidence in the future, people want to protect what they already have. If you have wealth, you vote for those offering low taxes. If you have been promised a great pension as a public employee you vote for those offering to protect your benefits. I may be oversimplifying the situation, but I believe our focus on ourselves has created political gridlock and a very pessimistic view of the future.
Last Thanksgiving I wrote and posted a “Time to be Thankful,” a “walk down memory lane” for the past 100 years. History shows us that when faced with what appear to be insurmountable challenges, we some how managed to overcome our problems and created a better future. Attitude, whether good or bad, may be the most important variable in determining success or failure. We see the importance of “attitude” every day of our lives, in sports, in business, in school, in our children, in our work and in our relationships.
A positive attitude creates enthusiasm and confidence. At the end of WW II, we were deeply in debt, the infrastructure of the developed world was in shambles but somehow we managed to not only recover, but to prosper. It was the euphoria over the end of the war that created the enthusiasm and “can do” attitude that enabled us to overcome the dire conditions we faced.
Twenty-five years later, after losing the Vietnam War, we fell into a period of pessimism as we dealt with runaway inflation, racism and a belief that we would soon run out of all the natural resources required to grow the economy. As a nation, the U.S. was like an overweight individual that has been told they need to change their diet and exercise, but the advice is ignored until they have that first heart attack. It is our collective nature as human beings to wait until we are close to the bottom before we take action. And that is what happened. Paul Volcker cut way back on the money supply to reduce inflation, and price controls were removed on oil, as we moved away from socialism toward a market economy. But just as important was the change in attitude resulting from getting the Iranian hostages back home, defeating the Russian hockey team with a bunch of amateurs and Ronald Reagan teaching us to believe in ourselves as a nation.
So when will our current malaise come to an end? Maybe our situation will have to get a lot worse before we realize our true potential for the future. The Ideologues’ and Demagogues’ we have elected to protect what “we” have, need to go. And our own “my way or the highway” attitude needs to change before we can restore the confidence we need to move forward. America’s best days are ahead if we start listening to one another, if we look for creative solutions and realize that Chicken Little was wrong in the past and will be wrong this time as well.