After much shedding of crocodile tears and hand-wringing over the plight of giant corporations, Wall Street investment banks and quasi-government agencies that are "too big" to be allowed to fail, what attention is being paid to salvation of the nation's consumers whose spending has been responsible for some 70 percent of the 10-trillion-dollar American economy?
Thanks to the largesse of the American taxpayers and investors who ultimately shared the costs, the Chrysler Corporation, Long Term Capital Management and the entire savings and loan industry were helped back on their feet through bailouts in the past. Lately, for Bear Stearns, Fannie Mae and Freddie Mac, also regarded as too big to fail, large injections of capital are flowing from taxpayers and investors to pump them up. Who knows what other miscreants and ne'er-do-wells who got themselves into such fixes through their own greed, speculation and unscrupulous foisting of insupportable debt onto hapless consumers will in turn need succor.
The deciders in Wasington would be better advised to give some thought to the prospects of failures among the more than 200 million spenders across all income classes whose effect on the economy may be minuscule individually but gigantic collectively.
Consider.
Household debt in 2007 totaled $13.8 trillion, including $10.5 trillion in mortgage debt and $2.6 trillion in credit debt.
What if these stressed-out American consumers, beset by gasoline costs of up to 4 dollars per gallon, loss of manufacturing jobs, inability to keep up with inflated prices for food, energy and most other necessities as well as discretionary purchases, were to rebel and decide to reduce expenditures to the bare minimum, purchasing only what is required for mere survival.
How would "the government", i. e., the White House, Congress, the Federal Reserve Bank, the Securities Exchange Commission replace the tax levies stemming not only from income taxes on individuals but also from the taxed income of companies selling products and services if these sources dry up?
Imagine the dire consequences that would ensue should all of us simultaneously have to reduce our level of spending through such actions, for example, as:
* Stretching for at least another year or two use of the old vehicle with 100,000 miles or more on the speedometer.
* Cutting back ... or even eliminating ... the family vacation trip.
* Cutting back ... or even eliminating ... family visits to restaurants of all price categories.
* Cutting back ... or even eliminating ... purchases of television sets and the myriad other electronic devices already flooding the marketplace as well as other technological marvels yet to spring from the drawing boards.
* Cutting back ... or even eliminating ... attendance at movie theaters, concerts, sports events, museums.
* Postponing ... or even eliminating ... a planned college enrollment or continuance of education that is so vital if we are to compete better in the global economy.
* Cutting back ... or even eliminating ... donations to charitable organizations.
* Postponing ... or even eliminating ... elaborate weddings, bar mitzvahs, graduation and anniversary celebrations and other events that bring family members together for happy occasions.
Or, perish the thought, cutting up our bank credit cards to put ourselves on a cash basis for our everyday purchases.
Of course, some hard-pressed consumers are already practicing many such economies as well as others, including in some worst-case scenarios, cutting back spending on such vital needs as medications and food. This in tne 21st century in what has been touted as the richest nation on the globe.
But the adverse effects of lower rates of spending on the part of American consumers would impact not only merchants and service providers in this nation,but throughout the world aswell.
Think of international resorts; French, Italian and Spanish wines; Australian and New Zealand lamb, Latin American fruits and vegetables, just to name a few. Even shoddy and unsafe products pouring into the country from China could be affected.
Can the nation continue on its path of capital infusions for corporations, investment banks and other entities while at the same time neglecting the base constituency upon whose income these very bodies are dependent?
I think not. Relief for the overburdened consumer is not an option; it is a mandate if we expect the nation's economy to regain its world stature.
Let me make it clear that this writer and his wife, both children of the Great Depression and thus hedonistically challenged, aren't seeking any help for ourselves. Because we lacked the foresight or were just too timid, depending upon one's point of view, to max out our credit card or use our fully paid-up home as an ATM machine to purchase additional residential properties, take additional lavish trips or purchase more expensive vehicles, our home is free and clear and, except for a small loan balance on my new luxury car, we are debt-free.
But for those hard-pressed unfortun ates who are just trying to get b y but find themselves in an ever-constricting bind, prospects must seem dim and getting darker. The insular lords of the land living in Washin gton had better heed their plight lest the current economic crisis widen in to a disaster akin to that of the Great depression that scarred so many for so long.
Are 200 million of us too small to fail? No. And the elected and appointed officials anointed as our leaders had make certain that we don't.
For starters, certain remedial actions need to be taken to inspire consumer confidence in the will of governing authorities to act decisively to cut off the water of would-be self-serving despoilers of the American economy.
Any cash or in-kind infusions of capital for floundering goliaths should take place only after the top echelon of executives in beggaring entities are required to forfeit either to the government or their suffering company all bonuses received while at the helm and a major share of any of the excessive incomes or stock option benefits drawn during their reigns. Any enabling legislation should include provisions to prevent the culprits from escaping such penalties by abandoning ship prior to the sinking.
Failing these and other possible actions of redress, we will have to start teaching a new definition of Capitalism, to wit: Capitalism is an economic system giving risk-takers free and unfettered management and control of private enterprise until such time as bad judgment and/or mismanagement threaten failure of the enterprise, at which time the government will provide any needed capital.
And let us hope that the government will not see fit to unleash the moneh-printing presses, which could give us inflation on a scale rivaling that of Zimbabwe, or that we are forced to go hat in hand to the newly rich sovereigns and oligarchs in the Mideast, Russia, China and India for bailouts, an eventuality that could make us pine for the days when we were colonists of Great Britain.