By Thomas Hinton
This week, the Federal Reserve lowered its 2012 recovery expectations stating
job growth and the much anticipated business rebound wasn’t going
to happen. Chairman Ben Bernanke announced that despite historically low
interest rates, fewer jobs will be created than expected and the U.S. economy
will only grow by 2.2% this year. His revised projections are not good news for
consumers or incumbents.
Consumers had high hopes that the American economy would
begin to rebound after five dismal years, but that won't be the
case in 2012. Why not?
Blame it on Wall Street, the Congress, President Obama or
even the European mess – but, regardless of whom we blame, the stark reality is consumers have lost faith in
the political process and those institutions that were supposed to protect us
from the economic calamity we’ve suffered through since 2007. This is more than just a political or economic crisis, it's an institutional breach of faith.
Furthermore, the economic game has changed. Nobody seems to have any meaningful answers or long-term solutions. We've not heard anything to date from President Obama or Governor Romney that suggest otherwise. This is why consumers are unwilling to loosen their
purse strings and open their wallets. Until we can see positive trends in job
growth, a solution to the housing crisis and the reappearance of Main Street shops, consumers
will be content to sit on the sidelines and not spend their limited funds. While there are a few notable exceptions to consumer spending such as paying off credit cards, replacing the old clunker with a new
or used car, taking a family vacation at a nearby destination and taking on student loan debts, for the most part, consumers are not willing to spend money on major purchases that can wait.
And, let's not forgot, that America’s economic troubles are being exacerbated
by our "too big to fail" banks that once again have invested heavily in questionable foreign investments. Economically speaking, the world looks like a row of thin dominoes just waiting for an ill wind. If Greece, Spain, Italy or Ireland
fails, we could all tumble into the economic abyss. As silly as it sounds, this unwelcome global investment scenario appears to be the price we will pay for propping-up irresponsible nations and "too big to fail" banks that want to play in the big leagues of global economics.
And so, as John Mayer’s song lyrics goes, “We keep on
waiting, waiting on the world to change.” The only problem is the world is not changing. It hasn't learned its lessons from six years ago and we continue to make the same economic blunders over and over again. Is it any wonder, our economy remains flat and consumers are frustrated?
Given America’s current economic
struggles and the dismal performance of our elected leaders to improve our plight, there's a good chance consumers will rise-up on Election Day and "vote the in's out!" We're
frustrated with Washington's continued hype and we're tired of waiting for a recovery that might never come. Certainly not if we stay the course.
About the Author: Thomas Hinton is president of the American
Consumer Council, a non-profit consumer education and advocacy organization
with over 128,000 members in all 50 states.
Contact: tom@americanconsumercouncil.org
