The confidence game.

AuthorRundles, Jeff
PositionRUNDLES [wrap-up] - Consumer confidence

Early last month the San Francisco Federal Reserve Bank, in its regional Economic Letter, suggested that the probability of another recession gripping the nation within the next 18 to 24 months is higher than there being an economic expansion. The reason: Consumer confidence and spending have dropped, and private-company hiring is well below expectations.

[ILLUSTRATION OMITTED]

There's a lot to be said for this point of view, and it is very important for all of us to focus on consumer expectations and jobs. Wall Street has posted significant gains over the last several months, but look closer at the corporate earnings reports fueling the surge and you'll find that corporations have beefed up their profits at the expense of jobs--jobs once held by those very "consumers" whose confidence and spending have fallen.

It's no wonder consumers have no confidence. Those who have jobs have very little confidence that their job will continue, and those without jobs have almost no confidence that they will find one anytime soon.

If you think about it, it's a kind of confidence game. But the trick here is that this confidence game, involving the jobs of Americans, is not something new. This has been going on steadily for decades. Solid American jobs, those involved in the building of wealth through production, have been going overseas since at least the 1970s, and ever since then we have been involved in the smoke-and-mirrors obfuscation that Wall Street is Main Street. It isn't. It used to be that the largest corporation in the country was General Motors, which employed hundreds of thousands of people in relatively high-paying jobs. Now the biggest companies are retailers, whose own workers can't afford health insurance or to buy a new car, and oil companies that represent billions of our dollars going overseas.

Government, or at least the way we have come to understand the role of government, cannot be the font of jobs. Private companies must be, and they have to be good jobs, the kinds of jobs that create consumers with the wages and confidence to spend money.

The only way to achieve this is to produce. We need to make more cars. We need to manufacture televisions, apparel, shoes, steel, tractors, computers, crops and everything you can think of. And we need to make these products and then sell them to the Chinese and the Indians and the rest of the world...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT