I’ve been collecting comments from people running or managing retail businesses, to see what changes consumers have been made.
From a hair stylist: Business is down. Not during the weekends, then we’re real busy. But people aren’t coming around during the day. Like now (gestured at the empty store): between like one and five in the afternoon it’s totally dead.
From a supermarket manager: Overall receipts hasn’t changed. But people are buying less each time, and coming more often instead. And they’re coming in more with shopping lists; they’re not shopping casually.
People are talking about Main Street, and the reality of the economic impact on plain folks. These observations, to me, mirror more the crisis of confidence precipitating the Great Depression rather than technical credit crisis. 401(k)s, pension plans and the credit markets will eventually recover, with or without a government bailout (and yes, I still think it’s a bailout, no matter what the pundits might opine). The crisis that has to be overcome now is the one of consumer confidence, and there are several relatively inexpensive, non-pork ways to ameliorate consumer fears:
- Eliminate short stock purchases. Period.
- Extend unemployment benefits to a full year.
- Freeze all foreclosures for the next eighteen months, and have local bankers, a representative from the mortgage company and the homeowners sit down and try and figure out how not to foreclose on the property. The feds should give local banks (not parent companies, or at a national level) funds relative to the mortgage stresses in that area to help underwrite these new loans. Only after there’s no agreement, or it’s clear the homeowner would be unable to pay even a reworked mortgage, would the foreclosure continue.
- Underwrite ‘pay for play’ programs, where unemployed people who successfully complete training and certification courses have a free ride — but are personally liable for the courses if they do not complete them (this cuts the ITT Tech student loan scam out of the loop).
There are other ideas, ones that we’d need to think about, ideas that might not be right for every region of the country, but workable in some. But what we really need is time. Time not to rush, time not to act hastily. And if that results, as President Bush said last week, in the loss of $1.4 trillion in “value” to the country, in the form of a loss of stock value, then so be it.
Calm, thoughtful action is economically more prudent than rash, panicky and doom-driven action.