What's Wrong With Consumer Confidence?

thetechnicaltake's picture


This is
an interesting video taken from CNBC's "Squawk On The Street" and
seen earlier in the week here on ZeroHedge.

The show's host, Mark Haines, is
incredulous that Tuesday's consumer confidence number came in lower than
expected. Haines mutters: "What the heck is that all about?" As
Haines goes onto explain, housing is higher in most major markets and corporate
profits are better. The only thing missing was the next statement out of his
mouth, and I will fill in the blanks: "What
do people want?"

It just goes to show how divorced Wall Street is from Main Street.

 

The show's talking heads or those people in the boxes suggest that
the real angst Americans have is rising gas prices at the pump, increasing
health care costs, and an uncertain labor market. This is all true, but I don't
think that it is the real source of America's angst.

 

 

 


The real
source of America's
angst is a sense that
something is terribly wrong
. What that something is isn't tangible -like
higher gas prices - but it is palpable. Maybe it is the lack of leadership in Washington or the
inability of that leadership to do anything but put our problems off for
another day.

 

There is no
collective purpose to the actions coming out of Washington. There has been no sacrifice for
the greater good. Bailouts and government programs, like "cash for
clunkers", have perpetuated the same old thing. The bailouts have favored
the connected or those who where irresponsible in the first place. Is this the
American way?

 

This is not the change that Americans wanted. They voted for
it, but this is not the change that Americans wanted.

 

So what kind
of change did Americans want?

 

For this we
need to go back to September, 2001 and the War on Terror. With the attack on America,
President Bush was handed a golden opportunity to galvanize Americans towards
the purpose of sacrificing for the greater good, but instead all he asked of
his fellow countrymen was to go to the malls and continue shopping. The soldier
in combat made the sacrifice, but this is what they do.  Their sacrifice
was unconditional, and this was understood and accepted by all. But where was
the sacrifice asked of the ordinary American here at home? At the very least,
shouldn't we have been asked to cut back on our consumption of large cars and
oil to decrease our reliance on those very same foreigners who were at war with
America?
I am sure my fellow citizens would have been willing to act for the greater
good, but they were never asked. This was President Bush's biggest failing.

 

Now we come to
President Obama. His crisis isn't the War on Terror, but a generational
economic crisis. President Obama did come to the electorate and say "we
need to change the way we do business" referring to the grid lock and
bipartisanship in Washington.
 I think the President was sincere. From an idealogical perspective,
Republicans and Democrats need to work together to solve the problems this country
faces. 

 

But for
President Obama it isn't so much what he has done (i.e., wasted a lot of money)
but what he has failed to do (i.e, galvanize the country for the greater good)
that is so discouraging.  Even if the other guy (Senator McCain) was
elected, he probably would have done the same thing - thrown good money after
bad - as this was what was being recommended by the economic of this country.
 Oh, these were the same economic leaders who missed the crisis in the
first place. 

 

But like his
predecessor, President Obama is missing what kind of change Americans really
want and why there continues to be so much dissatisfaction. Americans are
willing and ready to make that sacrifice to improve their nation and the future
of this nation for their children - provided that burden is shared by all. The
only problem is that no one has asked them to make that sacrifice, and the
window of opportunity for the Obama administration to come to the American
people to make such a sacrifice has closed or is closing quickly.

 

As measures to
resuscitate the economy begin to peter out, the fragile underpinnings of the
economy will begin to be exposed yet once again. The likelihood of throwing
more money after the problem - in front of a mid term election - is becoming increasingly
diminished. With no real economic catalyst to sustainable growth and with very
little fixed after this crisis, one really needs to ask what does the Obama
economic team do next?

 

One thing is
for sure: the time to ask the American people to make a sacrifice passed long
ago when the President first took office. This was the one option that has been
squandered, and this is why Americans remain so dissatisfied.