There's Something Reassuring About a Robin

As soon as there was a hint of light this morning, I heard Robins.  Robins, wrens, sparrows.  But it was the Robins that particularly caught my attention.  "Spring is on it's way," I said to myself, dodging the sudden shower while I ran uphill (is there no justice?).  

Our world right now is changing so rapidly my head feels foggy trying to keep up with the news.  Today, General Motors issued it's Annual Report and stated, essentially, that it's very existence is problematic.  I am young enough to remember "what's good for General Motors is good for the country."  And certainly that line has become even more evident as the policy makers count the number of jobs that will be in jeopardy if General Motors fails.  

In a magnificent display of gravity, home values continue to plummet, causing many people who believed they were accumulating some savings, to realize not only their security is gone, but the owe more than the house is worth.  

And the one economic sector which a mere two years ago was hot (retail sales) is now posting dismal figures, reminding us that we are all too afraid to spend money, much less credit.

But, this morning, there were the Robins.  As if to say life does go on, seasons do change, and sooner or later we will understand why the world seems so chaotic right now.

The Employment Dilemma

In today's news, Smurfit-Stone, one of the nation's largest supplier of cardboard boxes, has retained bankruptcy counsel.  Smurfit-Stone owns timberland, recycling centers, and paper mills through out the country.

Obviously their products are directly linked with consumer products.  Smurfit-Stone, like many American companies, borrowed heavily and is highly leveraged.  It borrowed money for, among other things, a merger and capital spending.  Yet, again, another manufacturing business in deep trouble and more than likely in it's last days.  Paper and cardboard, well, we can get 'em cheaper overseas.  No need to have it here.  I will say it again, I think this is wrong-headed.

So, here's the thing.  How are we going to create an economic recovery without being dependent upon consumer spending?  It seems to me that we may want to think all of this through before we go spending even more money.  Which isn't to say we shouldn't help people in foreclosures or unemployed, but we need some serious long term thinking here.

A wise woman friend started asking some questions the other day as we were walking.  She wondered what housing will look like as we re-adjust our economy.  Will people be building huge McMansions?  If so, who will live in them?  What will her daughter, in her late 20s, live in?  Will she ever be able to purchase a home?  What about people displaced because of the economy?  How are we going to provide basic services to them?

She also wondered whether people will study for jobs that may disappear?  Will young people go to college and bank on training when they begin to believe that the training may become obsolete?  Will there be such a thing as a career?

Last, she wondered whether our communities will pull together, demonstrating compassion or will we become a country of finger pointing and blame?

I thought, recently, about my parents generation.  Tom Brokaw's greatest generation  and how they rose out of the ashes of World War II, creating a nation of hope, a belief that if you worked hard and were committed, you had a career, a home, a neighborhood.  That the guy (or woman...eventually) next door could run for office, could find time to coach Little League, spend weekends with his family.  It all, in hindsight, seems to egalitarian.  Now you have to have been anointed by political elites to run for office,  you are glued to your Blackberry or laptop, too busy to even notice whether your child, who competes in everything in order to get into a "good school," scored a goal.  You're in the office on Saturday, working on Sunday, and maybe eat dinner one night a week with the family.  And chances are real good you'll be out of your job, laid off, within a year or two of starting.

It seems that the promises, the hopes of the greatest generation are dead.

But what if, what if, we began to think about those dreams again.  What if we demanded, from ourselves and policy makers, that we re-think the whole idea of work, community, family.  What if we begin conversations about finding long term employment, that is gratifying to the employees, produces quality goods, and mitigates harm to communities?  Why is that conversation so hard?

Retail Therapy

No surprise in today's numbers, although, apparently Wall Street felt they were worse than expected.  But, as much as my "research friends" like to disrespect anecdotal evidence, if you were out and about during the holiday shopping season you would have known the retail sales numbers were going to be bad.  

The most impressive, so to speak, number is that retail sales are down slightly over 9% from December last year.  So while the down 2.7% from November may not seem like a lot, 9% does.  It says the recession has been going on for over a year before anyone in "officialdom" declared that we were technically in one.  

There are two things that concern me.  The fact that while we all knew something was wrong with the economy, policy makers had to wait until, what, some archaic and ridiculous formula told them something was wrong?  Is there something about fiddling while we are standing in the unemployment line about this?

But more importantly is the consumption issue.  Imagine a hamster in one of those wheels, running and going nowhere.  It seems to me that is what we are in right now.  Many pundits say there is a lack of confidence in the economy.  They refer to this lack of confidence regarding banks lending, investors who still have money, investing, and consumers spending on stuff.  Well, no kidding there is a lack of confidence.  We are watching in real time what many of us read about in history books.  Doesn't exactly instill confidence in our economy.

But seriously, what the pundits mean is that if only, somehow, consumers feel they have more money and banks feel they are not bleeding in bad loans and investors feel they will get at least a reasonable return, the economy will magically become healthy.  Thus, the stimulus.  The idea behind the stimulus checks the summer of 2008 was a belief that if consumers feel they have more money they will begin to spend and the retail sector which accounts for over 80% of our national economy (yes, you read that right) will bounce back.  I don't know about you, but somehow $600 didn't instill a lot of confidence.  Instead, Americans apparently did what they should have done, pay down debt or save the money!  So now the stimulus idea is to try the same thing, but with tax credits, in other words no cash, and to create some "shovel ready" jobs.  

Perhaps the idea being that if we think something is being done, we will I suppose, go out and spend money.

But here is the rub.  I don't think Americans have that much money.  Credit cards are tapped out and no one is getting refinancing loans on their homes to pay off the credit cards so they can go at Costco one more time.  And what savings Americans have left is not being touched out of fear that we may need it.  In other words, I don't think the issue is blithely about confidence, I think the issue is that deep down inside we don't really think the economy is working.

Relying, again, on the retail sector to bring the economy back into health is like pouring feel good drugs into a really sick patient and hoping by just getting him out of bed he'll make it a few more years.  

Now, I am a huge consumer.  Books, outdoor equipment, fly fishing stuff, food, did I say books?  So I don't advocate some Luddite lifestyle.  I love my toys.  But I also think our addiction to consuming is responsible, in part, for what got us into this mess.  And I think as a society we really need to just say no to the policy makers who continue to urge us, in less direct ways than President Bush did on September, 12, 2001, to go to the mall.  When President-elect Barack Obama encourages us to support his economic stimulus package, we need to think about whether the idea is to instill confidence to get us to spend money on yet another flat screen TV made in Viet Nam, or to provide employment for people that nurtures and instills a sense of purpose and confidence in their lives throughout their lives.  Because at some point, the hamster needs to get off the wheel.  We have to stop making the same mistakes and a reliance on the retail sector to pull us out of this recession is the same mistake.

And, as if to show I'm right (insert smile) a recent poll indicates that Americans have a very low confidence level of our federal government.  And that low confidence extends  into the future.  In other words, we think the system of more broke than the "mechanics" who are fixing it.  Scary.