Does it sometimes feel to you that America is a car about to crash and the professional drivers we hired to get us through this rough patch bailed, leaving the rest of us to fend for ourselves? It does to me. After seeing the hopeless bickering in Washington over the debt ceiling, a fruitless debate that cost us our AAA credit rating and ensued additional economic uncertainty, I had a sense that the people we hired to lead are paralyzed. I picture them as deer frozen in the middle of the road, staring at the car about to run them over. They have no idea what they’re doing. They’re like two parents who chronically fight in front of their children, leaving them demoralized and distracted. Irresponsible. Washington’s bickering is causing us harm. America doesn’t have a cash problem, it has a leadership problem that is devouring our confidence. In a country that thrives on optimism and the pursuit of “dreams”, lack of confidence is a dangerous thing. Yes, Europe has its problems too – which affect us, but the rest of the world still looks to Wall Street to determine whether it will wake up to economic head ache. We still have that going for us.
While American businesses have an estimated one trillion dollars in cash waiting to be tapped, the uncertainty produced by constant political gridlock during a fragile recovery has put a halt to new investments and hires. The vicious cycle is hurting everyone. I am no economist, but I look around and not much of what’s going on makes sense: the cluelessness in Washington, the extreme market volatility for companies with sound balance sheets and good growth outlooks, the fear. And then it hit me. After listening to the president speak on the economy for the second time in a week a few days ago: we have no leadership. Congress is on vacation and even when they’re in town, they’re useless. With an unwilling congress in his way, the president seems to have no clue what to do to spark job creation. He’s supposed to be cheering us up but the guy seems demoralized himself. He is that deer about to get hit. So who do we turn to?
In come private CEO’s. Could they be our hope out of this loser mode we’re in? Warren Buffet, often outspoken about the tax issue recently wrote an Op-ed suggesting that taxes be raised on households making over one million per year. Is he on to something? Some argue that raising taxes on only the wealthy wouldn’t generate enough revenue. Households making $250+/$200 for individuals are a bigger chunk of the tax-filing population, so a tax increase may end up affecting the ever dwindling middle class. Then this weekend, Howard Schultz, CEO of Starbucks sends an email to 50 of his CEO peers calling on them to “boycott” politicians until they return to Washington and deal responsibly with the debt crisis. Now, I liked the sound of that! Mr. Schultz is a democrat known to have donated to Prez. Obama and others and as such, his intentions may be called into question. However, there’s a part of his request that may not: he’s asking for American businesses to start investing again. To use that trillion dollars to do what they do best in spite of the political uncertainty. That is a big request, considering these businesses have shareholders to answer to. But he considers this a time to be “Americans” and to help restore people’s confidence in the American dream, because if there is no one to buy their products, there might be no good news to report on that earnings call after all.
Christine O’Donnell was on Piers Morgan Tonight last night. Before she walked out of the interview to avoid sharing her stance on gay marriage, she mentioned we are living “the second American revolution.” Now, I’m no fan of Ms. O’Donnell but this statement made sense to me. These are turbulent times. These are difficult times. Are we going to be like the deer frozen in the middle of the road waiting for that car to hit us or are we going to summon American ingenuity, confidence and will to once again rise above this mess? America binged on debt for too long and there may be no easy or fast way out of this hole, but we don’t have to lose our spirits because of it, we don’t need to lose our heads and certainly not our 401K’s.
[...] The consensus is, Obama is hardly pleasing anyone. A recent poll shows the president’s approval rating on the economy at an all time low: 65% of Americans disapprove. And yes, we all know he inherited a terrible economic mess from George W. Bush, fueled by financial deregulation dating back to the Clinton days. Thank you very much G.W. and Bill! But back to the scapegoat du jour, the current administration’s strategies to propel an economic come back have fallen short and there’s an increasing sense out there that Obama is just not being “the man”. I wrote about this in a recent post. [...]