It can be depressing listening to the news about the economy, the dollar, and the financial crisis. Everyday the financial news gets grimmer, and our leaders are desperately trying to find some method of action that will halt the economy’s slide, avoid another Great Depression, end the recession, and return the nation from insolvency to prosperity.
But still whenever there's a chance that money can be made, hope still abounds. The talking heads of the financial porn channels can not agree on a date when they can return to making money hand-over-fist by transferring the wealth of ungrateful investors into their personal bank accounts. Most talking heads on CNBC or Bloomberg seem to think it will take a few months, perhaps a year.
Others are not so optimistic. At the heart of this recent slide into near economic depression is that fact that the Great American Ponzi Scheme, i.e. our consumer and debt-driven economy is probably stumbling towards a massive reorganization or reorientation. For nearly 30 years, we’ve shopped til we’ve dropped and borrowed as if there were no tomorrow. Well tomorrow has finally arrived and we find ourselves tapped out, barely able to afford minimum payments on mortgages, auto loans and credit card debt.
If by some miracle President Obama’s stimulus plan works and we halt our slide, toward deflation or disaster we will still be faced with the grim fact that our prosperity will no longer be based on consumption and debt, but will have to be based on production and saving.
This was brought home to me when I was listening to the Hon. David Walker, president and CEO of Peter G. Peterson Foundation and the former U.S. Comptroller General. Walker was one of the speakers that at a forum whose subject was the major fiscal and sustainability challenges facing the country and the higher education sector. The forum was held on Feb. 2, 2009 in Washington, D.C. and was hosted by the National Association of Independent Colleges and Universities. I saw it on CSPAN. Yes, I have sadly reached a point in my life where I enjoy watching CSPAN.
Walker talked about the need for Americans to spend less and save more. Not only that it is imortant that we, as a country, start producing products that the world wants to buy instead of borrowing money from Saudi Arabia and China to buy gasoline at Costco and cheap toys at Wal-Mart.
Towards the end of his presentation Walker pointed to his head and said "we have to compete with this!"
Now that made a bizzarre sort of sense to me, because when I point to my head and say "I have to compete with this," I am usually referring to some sort battle between the multiple personalities in my head. I am constantly having to referee between the crazy side of my head and the sensible of my head. Me being me, the sensible side usually loses.
But that wasn't what Walker was talking about at all. Because after he pointed at his head, then Walker flexed his right bicep and said "we can’t compete with this." He went on to say something to the effect that if we try to out muscle or countries in the world our economy will lose. If the U.S. wants to be competive in the global economy, we will have to use our brains. We can’t go back to being the worlds greatest manufacturer of products, televisions, cars, computers or gadgets, but become a developer of new products and innovative ideas.
So, we have to save more and develop a more creative economy. That is going to take a long time. I have two reasons for that opinion. First, our society will have to endure the pain of the unwinding of Wall Street’s latest Ponzi scheme. Secondly, it will take time for the country to change from a nation of debtors and shoppers to a nation of savers and innovators.
The change is necessary and President Obama’s current stimulus plan may succeed in getting us out of the hole we dug for ourselves. But once we’ve done that, we’ll have to pay back the money that we’ve borrowed over the past eight years. It is necessary and it will require sacrifice, thrift and hard work.
The road ahead is long and arduous. It will take years to develop the inventions that will help us to improve our economic competiveness vis a vis the rest of the world. Will we become world leaders in creating new green technologies whatever they are? Most Americans believe that that is the case. That belief is not yet a false myth. So the question is not "Will our scientists and engineers invent new products based on biotechnology or nanotechnology?" Hopefully the question is "When?" I don't know that answer.
In the meantime save your pennies, get out of debt and keep an eye out for the young American woman or man who is building a nano-technological mousetrap. I hope she builds one soon, because I think the economic news is going to be grim for quite awhile. EEEk!
Capitano Tedeschi
30
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