The following interview on the mood of American consumers was conducted on September 7, 2009 with Thomas Hinton, President & CEO of the American Consumer Council, by Consumer News & Views.
CNV. Most economic data suggest that the United States remains in a deep recession. What is the mood of American consumers and when do you predict the economy will turn around?
Hinton. There's no question the United States remains in a serious recession. Consumers are still hurting. We are still losing jobs and small businesses are reluctant to hire people until they see stronger signals that the worst is over.
CNV. Do you think the worst is over in terms of the recession?
Hinton. That's a tough question because companies are still laying-off thousands of employees and consumer confidence remains low. I'm also troubled by the number of home foreclosures and bankruptcies. Those numbers are too high and that's not a good sign for a recovery to begin.
I just returned from Europe and Scandinavia and it's apparent that America's economic woes are having a negative impact on many countries around the world. As long as American consumers refrain from spending and traveling, the global economy will suffer. As far as predicting a turn-around, I think three things need to happen. First, the federal government's stimulus plan needs to take root and federal agencies need to start pumping money into state and local coffers. Secondly, we need to reverse the job losses by generating millions of new jobs. Frankly, this is President Obama's biggest challenge because without job creation, consumers are not going to spend money they don't have and the economy will remain stalled. Thirdly, we need to correct some fundamental flaws in how we do business in this country to ensure we don't repeat the same economic mistakes again. I'm talking about strengthening federal regulations that prevent large companies and Wall Street from holding our nation hostage, economically speaking. Most consumers resent the federal bail-out of Wall Street companies and the billions of dollars taxpayers had to spend to set things right. Also, it's time Congress got serious about passing legislation that protects consumers in the critical areas of health care coverage, environmental protection, airline delays, credit card fees, foreclosures, student loans, and identity theft. Frankly, all eyes are on Speaker of the House Nancy Pelosi and her Democratic majority to see if Congress delivers. If Congress doesn't deliver, I think Speaker Pelosi will have squandered a once-in-a-lifetime opportunity to do great things for American consumers and the nation.
CNV. Do you see any consensus among consumers on the issue of health care reform?
Hinton. There's certainly consensus among the 40 million plus consumers who either have no health insurance or are under-insured. I think the entire health care debate really boils down to three key questions. First, should every American have access to quality health care? If the answer to this question is yes -- and I believe yes is the right answer -- then the second question we must ask is: What system should we create that ensures every American has access to quality health care? And, thirdly, how will we pay for it?
The current national debate is all wrong. Our leaders should be focusing on America's moral obligation to its citizens to ensure every American has access to health care. Until we have agreement on America's moral obligation to provide health care to every citizen, we will not arrive at the proper solution.
TR Reid, a respected journalist, has written a great book entitled The Healing of America. Mr. Reid studied the various health care systems of many countries and found that the United States is the only developed nation that does not provide universal health care to its citizens. Why is that? It makes no sense that the richest nation in the world has not made the moral commitment to ensure its citizens receive the finest health care in the world. It is generally acknowledged that America has the finest health care professionals, hospitals, and research facilities in the world. But, unless you have health insurance, you cannot access our doctors, hospitals, or research facilities. Frankly, it's an embarrassment to our country.
Opponents claim a universal health care system will create socialized medicine -- whatever that means -- or eliminate a person's freedom to choose their own doctor or hospital for treatment. That's pure nonsense. These statements are nothing more than a scare tactic on the part of the special interests who don't want Americans to have open access to health care -- plain and simple. It appears this deceitful misinformation campaign on health care is being funded largely by a few health insurance companies that stand to lose billions of dollars in sky-high health insurance premiums if Congress adopts a single-payer system. The reality, however, is unless we change the current system -- and, specifically, how we pay for health care -- we will be bankrupt within 25 years because we cannot keep pace with the ballooning costs of health care. So, a meaningful solution must be found soon. That is the reality regardless of one's political views or special interest.
I would encourage consumers to read The Healing of America to gain an objective understanding on the various health care options that are working in other countries. I also think we need to stop protecting the "sacred cows" of health care -- like the health insurance companies -- that are controlling life-and-death decisions such as who can be treated and which treatment patients can receive, how much money doctors and hospitals get paid for a procedure, and which pill you can take to get well. It's not the federal government consumers should be afraid of when it comes to health care. It's the health insurance companies we should fear because they are the ones who are making life-and-death decisions for patients. It just doesn't make any sense. There are better options for American consumers.
CNV. Where will the new jobs come from?
Hinton. I mentioned earlier that America needs to rethink how we do business. But, we also need to reinvent our business growth model if we expect to remain the number one global economic power. I can assure you that China, India and other countries are not sitting idle.
I think the long-term answer for job growth in the United States will be found in three key areas: Green, Information Technology, and Knowledge Management. Certainly, bio-sciences, health care, education, defense, entertainment, agriculture and smaller specialty industries such as space exploration and scientific research will support America's economic growth over the next 25 years, but we need to recognize as a nation that we have entered a new economic era and begin to train a new generation to fill the jobs that will be created in these growth industries.
We also need to retrain the millions of Americans who have lost their jobs, and give them new skills and a renewed sense of economic hope. The unemployed are good, decent people who are trapped in an economic downturn not of their making or choosing. So, we owe it to them to provide the necessary training and education to put them back to work.
CNV. Are you optimistic for consumers in 2010?
Hinton. I think the short answer is yes, I am cautiously optimistic for 2010. But, my optimism for 2010 depend on a few key issues. First, I think consumers need to see measurable progress in Washington on the major issues we've discussed in this interview. Secondly, I think President Obama is on the right track and he needs to press ahead and get Congress to adopt his proposals and quickly implement his plan. This probably means that some regressive members of Congress will be left behind, but that's politics. The sooner Congress and the president act, the sooner we will see a meaningful recovery. If Congress lacks the political courage and will to act, all bets are off. 2010 could be another dismal year. If that happens, I'm concerned that China will pull ahead of the United States and become the dominant economic force for the next 20 years because they have the resources and economic capacity to beat us. So, the political and economic stakes are very high.
In terms of consumer confidence, it's beginning to inch upwards because -- despite the naysayers and political commentators -- most consumers think Mr. Obama is on the right track and he is addressing the tough issues that need to be resolved in order to create long-term economic growth.
If there is a silver lining to our current economic crisis, it is this. Out of adversity comes opportunity. One of America's greatest strengths is good old Yankee ingenuity. Americans have a tremendous innovative spirit as well as the ability to take an idea to market quickly and cheaply. So, new ideas for products and services will flood the marketplace as soon as the economy recovers. There is certainly pent-up demand among consumers to buy new cars, clothes, electronic goods and other staples that drive our economy. But, until we see job growth and a spirit of cooperation in Washington, I think consumers will sit on the sidelines with their hands on their wallets and purses and not spend money. And, every day consumers sit on the sidelines is another day we postpone the recovery.
Monday, September 7, 2009
The Mood of American Consumers Remains Cautious: An Interview with Thomas Hinton of ACC
Posted by Tom Hinton at 10:04 PM
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