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article imageOp-Ed: Pent-up Pressures Will Explode Into A New Age Of America

By James Raider     Aug 17, 2010 in Politics
The Obama Administration nudges Treasury Secretary Timothy Geithner to the front of the class to present Pollyanna statements on subjects apparently not understood by the President or many of his advisors. Millions react with little more than confusion.
The skeptical population is exposed to too many scripts on the economy written in rose-colored ink, read through rose-colored lenses. Listening to Geithner, leads one to wonder if he’s read the news lately. Actually seeing him, leads one to doubt that he cares. Down the road, Bernanke does as he’s told by the bankers who have little concern for 17%+ unemployment. Their multi-billion dollar bonuses are thick insulation from the plight of Middle America. Ben Bernanke pontificates from The Fed, pretending that inflation is a curse, when in fact its advance would erode the assets of his bosses on The Street. Inflation’s impact would also be a reduction of the real debt currently burdening homeowners whose perceptions rendered home ownership a panacea.
Hypocrisy is one those more despicable black arts practiced by too many sitting in positions of influence. Self preservation and self interest too easily twists truth from the podiums of power, and confuses a population unfamiliar with the complexities pretended by economists. Today a whole middle class shudders at the long term prospects of its underwater mortgages further sliding into an abyss, as job continue to evaporate.
The public sustains abuse, particularly when the likes of Geithner, and Bernanke continue the reign of power and influence enjoyed by Greenspan, even after having proven complete and absolute incompetence during the creation of the mess. Of course in fairness to Bernanke and Greenspan, we should note that Geithner additionally demonstrated contaminated morals and meager principles in his tax filings. These three mousequeteers of finance and their friends, along with the misguided Congress of the past 20 years fuelled the indebtedness now burdening an anguished middle America. The crisis is the result of burst housing and debt bubbles, which many perceived correctly and some capitalized on. Bernanke, Geithner and Greenspan were not among them. Bernanke, however, was very capable when he effectively misled Congress on behalf of his boss in the White House and his bosses on The Street, to get the Troubled Asset Relief Program (TARP) passed.
Bernanke’s continuation of “cheap debt” is being ignored by both businesses and consumers. If you’re concerned with job security, you’re not running out borrowing for a bigger home. These days, no one wants more debt, it seems. No one, that is, except Washington.
The lamentable uncertainty afflicting every corner of the United States has permeated its business engines. In Board Rooms across the Nation, Accountants are telling their bosses, “hold tight.” CEOs aren’t economists, or fortunetellers. They gleam information from those they have hired, and those which they have confidence in and trust. From behind closed doors, senior executives sense the choking “uncertainty” and they fear it. The result? Corporate America sits on almost $9 trillion in cash and counting.
Another result? Investors purchase Johnson & Johnson 2.95% ten-year notes, preferred over company shares or even over Treasuries with downward sliding yields. Suddenly junk bonds are more delectable than Treasuries? This is a major shift in perceptions. It is also telling of concern for the economy’s future, mid to long term. It speaks volumes of investor confusion about the economic future. Corporate America and Main Street are uncertain, and Washington daily adds to the confusion.
Corporate America would normally look for any excuse to invest. American business is seeking signs from the country’s leadership that it can “get behind.” That is the biggest failure of the current leadership in Washington. No one in the Capital seems capable of leading the charge to the restoration of confidence, least of all the inexperienced President. Ineptitude, indecision, reckless spending and loading up the future with unfathomable debt, pulls the train of hope into reverse.
A panoply of hapless maladroits appear like balls bouncing down a pinball machine, reacting to daily events with little grasp of the most critical expectations of a tired public. Perceptions are powerful forces moving through the country’s social, economic and political fabrics. While stagnating over economic stimulus package decisions, Washington should give energy to psychological stimulus.
Assertive leadership should take forceful steps to reduce administrative bureaucracies, and streamline all levels of the structures providing services, including simplification of the taxation and the health-care systems. Other actions should include biting into the biggest lie of them all - the Social Security and health-care costs which almost 80 million Baby Boomers have been led to expect as they head into retirement. The expectations represent entitlements of $4 trillion which the U.S. economy will be incapable of supporting. There is even more important action for a leader to take. Inspiration.
It is not the nature of the average American to want coddling by big government. America has long demonstrated a propensity for innovation, hard work, creativity, and entrepreneurship. America has progressed through numerous transformations since its founding. The vast majority of jobs lost in the past five years have been in manufacturing, while the most stable corporate environments have been those in the high technology industries.
We may not know what new chemicals or revolutionary algorithms will trigger new industry sectors, but as the future unfolds, America’s destiny will rest on the stimulation of interaction between people and the stimulation of thinking which will galvanize toward new discoveries. Avenues of communication, through the Internet, as well as physical corridors such as high speed trains between major urban centers will further stimulate connections and energize creativity. Each of these discoveries, large or small, will then need encouragement on risk taking, and entrepreneurship.
Companies, nascent and mature, will require the opposite of the noise which is today effusing from Washington. Leadership means pointing to clear defined goals and energizing Main Street. It means stating confidence in the bearing – clear heading and clear direction. Once such leadership leaps onto the stage, there is pent-up pressure from the cash stockpiles corporations are sitting on. Just as significant is the pent-up creativity and innovation waiting to commercialize the next technological revolution. The psychological stimulus America hungers for, is inspiration.
James Raider writes The Pacific Gate Post
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of DigitalJournal.com
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