Wednesday, March 3, 2010

The Economy Remains Unsettled: Just Ask Consumers

Over the past two months, I’ve been invited to speak at several meetings and conferences to offer my insights on the economy and consumer sentiment. The truth is nobody has a crystal ball that can successfully forecast 2010 or the future. In fact, I’m more convinced than ever before that the so-called "experts," with very few exceptions, haven't the slightest clue what they’re talking about! It's mostly gibberish coming out of New York and Washington, D.C. And, the media is also clueless.

Think about it. One day the stock market is up and everyone predicts a bright future. The next day it’s down and the doomsayers come out of the woodwork. When an earthquake in Chile can not disrupt a country, but also causes a serious spike in prices at Chicago and St. Louis gas pumps, something is terribly wrong with our economy or the proverbial crystal ball economists are using to predict the future.

But, there are two things I know for certain that you can take to the bank. Actually, these days you’d be better off taking them to a credit union!

First, consumers are very uneasy about the economy because of slow job growth, rising foreclosures due to loan manipulation by unscrupulous lenders who are not really modifying troubled mortgage loans and the mounting cost of health insurance. Despite what Wall Street tells us, Americans are not buying the spin that our economy is rebounding; and, that’s why most consumers are sitting on their wallets and not making major purchases or planning expensive vacations to Europe and Asia. Frankly, very few consumers have any money to spare. It’s just that serious!

Secondly, consumers are not convinced our elected leaders know what the hell they’re doing in Washington or at their state capitals. Just look at the irony in California. Governor Gray Davis was recalled by voters for failing to control energy prices. But, over the past several years, Governor Arnold Schwarzenegger has created a bigger mess and saddled Californians with more debt than ever before! It’s beyond the point of absurdity. Our leaders are not only inept, but also beholden to special interests. Consumers have been left out in the cold.

Meanwhile, in Washington, although President Obama has ideas and charisma going for him, very little is getting done. Many consumers are beginning to question how and when the economy will be fixed. Or, will Mr. Obama and the cowardly Congress continue to throw billions of taxpayer dollars down an economic rat hole to reboot the economy? If so, most small businesses that could jumpstart an economic revival and lure consumers back into the marketplace, haven’t seen a penny of that $750 Billion stimulus money we keep hearing about. And, neither have most consumers. It appears most of that money has gone to big business, big banks and big political donors.

The final straw will happen in November. If things don’t improve quickly, voters will throw the bums out on Election Day. This applies to every elected official regardless of their party affiliation. Consumers are sick and tired of seeing Congress issue bailouts to poorly managed companies that turn around and reward themselves millions of dollars in bonuses for their incompetence. It makes no sense to most Americans.

And, big banks, which have tightened credit instead of making affordable low-interest loans to small businesses -- and continue to jack-up their credit card interest rates -- aren’t helping matters any. Frankly, consumers are disgusted with the whole lot of them!

Just as Toyota’s misguided management is learning how angry and volatile consumers can get when their Camrys and Corollas malfunction, so to will the politicians and Wall Street fat cats feel the wrath of consumers if the American economy doesn’t rebound soon.

My crystal ball tells me that Congress and big business are in serious trouble. They had better wake-up soon and realize that “we’re mad as hell and we aren’t going to take it anymore!” I predict another revolution is coming and this one will be waged with votes and boycotts by millions of angry, disgruntled consumers.

About the Author. Thomas Hinton is president of the American Consumer Council, a non-profit consumer education organization with over 90,000 members. He can be reached at:

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