Its the stupid economy
Rough days lie ahead. How we react will make the difference.
The national economic crisis brings a sense of foreboding to a small city like Springfield. Sometimes the nation’s worst weather bypasses here; the coasts get the hurricanes, fires and blizzards, while we sit cozy, contending only with the aftereffects of others’ storms. So far here we’ve largely escaped the housing bust because we never had a boom. State government layoffs, while devastating for those families directly affected, haven’t been severe here yet. Jobs lost in the banking and finance meltdown have been a big-city phenomenon, while Springfield was helped by the bailout of insurance giant AIG.
Yet there is a feeling that the worst is yet to come, even here. Some retail businesses were struggling to hold on through Christmas; we may see numerous stores and restaurants close after the first of the year. Once state government resolves its leadership crisis, the looming financial crisis may see calls for more layoffs and cutbacks. There are likely to be tremendous challenges ahead for tourism, as well as for arts and entertainment. Social services are usually first to take a hit during economic downturns, and the poor suffer more than most.
What could make the recession different here than in other places? The answer lies in how Springfield decides to meet the challenges and to help the economy’s victims. One way to help is for consumers to make a conscious decision to “buy local” whenever possible. If those who dine out make it their mission to spend at least half of their dining dollars at Springfield’s homegrown restaurants, that would help keep them open and thriving. Local stores and restaurants not only bring regional flavor to the community, they also do far more than national chains to support the local economy.
Though most of us have been resigned to the multi-billion-dollar bailouts of the auto industry and banks “too big to fail,” bailouts need to start at the bottom. Why not start a fund to keep locally owned stores or restaurants on the edge from going under? Relief could be arranged for those about to lose their homes or apartments, or who are drowning in credit card debt. Rather than give in to the conventional wisdom that state government needs layoffs to survive, why not increase state revenues by requiring the wealthy to pay their fair share in taxes? Rather than cut back on state spending, this may be the appropriate time to expand the state’s share of education funding, and end the disparity between wealthy and poor school districts.
Ravi Batra, an economist educated at Southern Illinois University and now on the faculty of Southern Methodist University, has predicted that if the U.S. deals with the economy by getting money and power to the lower levels of the socioeconomic ladder first, then it could emerge from this recession stronger than before. “We are on the verge of a social revolution,” he says. He says it started with Obama’s election. The second part will be more economic equality and less poverty. “America is endowed with incredible natural resources, a lot of productive land, very hard-working people, and a great diversity of people who bring enormous talent to this country, so this phase will pass. Prosperity will make a comeback” he predicted.
Meanwhile, however, there are a rough two or three years ahead. More than 2 million jobs disappeared in the U.S. this year, and unemployment is likely to get worse. For the most part, the economy happens to us; there’s not much we can do to stop it. What we can do is care for the victims. And we can challenge the conventional wisdom that bold reforms – such as in education and tax policy – have to be put on hold until the recession is over. This economic crisis is a test of character. By passing the test, we can emerge stronger than before.