He’s there with you at every turn.
He’s standing next you in the check-out line, catching up on the latest gossip about alien babies and Oprah’s epic struggle with doughnuts.
[img]429|left|||no_popup[/img] He’s lurking in the shadows as you grudgingly pry open your quarterly 401K statement.
He’s hovering nearby as you surf the channels looking for some hint of good news.
He’s as real as the monsters under your bed and just as hard to find when you turn the lights on.
He’s the economic boogie man, and he’s all in our head.
Visiting Your Head
According to the experts who study this phenomenon, the fundamental problem is that everyone thinks we're in a bad economy. Consequently, companies don’t want to invest. Employers are reluctant to hire. And people don't want to spend. It's a vicious circle, a self-fulfilling prophecy.
Forecasts of doom and gloom are all around us.
As the First Head Shrink-in-Chief, President Obama seemingly has been everywhere to soothe our fears and to buoy our spirits. He’s been holding town hall meetings in California, appearing on Jay Leno, working the circuit on Capitol Hill and holding press conferences to push the high points of his economic recovery plan.
On the one hand, the conservative pundits decry that the President and the government are trying to do too much; that Obama is pushing us towards even greater big brother intervention, higher taxes and a monumental deficit from which we never will recover.
Liberals believe the President and the government haven’t done enough. They bemoan the failure to intervene sooner in the uncontrolled greed that is Wall Street.
But in truth, whether you’re liberal or conservative, what you’re really looking for is someone to tell you it’s going to be okay.
It is going to be okay.
We Have Done This Before
Even though the fundamental precepts about how we invest and our expectations toward the market economy may be altered, we will survive. Old industries may be swept away, but new ones will surface. We will re-arm, retool and recover.
Historically, periods of economic exuberance always are followed by deep sell-offs. Granted, the plunge to the bottom has knocked the wind out of our confidence, and has produced pain in all sectors of the economy. True, some have fared better than others. But in the end, no one really has been exempt from the downfall.
As we emerge from this predicament, we need to seriously weigh how we will respond to this type of crisis in the future. We have built a financial and economic system that was vulnerable. Lately, we have compared this circumstance to the Great Depression.
Looking back at that period, it generated programs and institutions like the FDIC and Social Security that still are protecting us today. Going forward, as we regain a more confident footing, we must take a long and hard look at the types of institutions we need to keep history from repeating itself.
The boogie man is out there. And he’s all in our head.
John Cohn is a senior partner in the Globe West Financial Group, based in West Los Angeles. He may be contacted at www.globewestfinancial.com
