Bonnie Alba
October 30, 2008
America's financial solution is confidence?
By Bonnie Alba

As an economic advisor to Obama and former U.S. Federal Reserve chairman, Paul Volcker said part of the financial market problem is a result of the lack of "trust and confidence" in government ( In the short time 'til the election, he wants Obama and McCain to make this issue "front and center" in their campaigns.

Did he mean that if people trusted the government to fix all things the market economy and Wall Street would remain strong? Volcker speaks as if the government can fix what they caused and perpetuated by taking over the so-called free market place.

Just announced: In one month, September to October, the Consumer Confidence Index fell from 61.4 to 38, the lowest since tracking began in 1967 (,0,7575618.story?track=rss). Add to that statistic the confidence level of Americans in their government is also at an all-time low. Is there any doubt that someone is not listening? Especially the candidates.

Unfortunately, both campaigns are a dollar short and a day late in attempts to restore the peoples' trust in government. One reason is the people are on the front lines fighting the inflation that is hitting them from all directions along with losses in their retirement savings. This while their wages remain stagnant and jobs disappear.

It didn't happen overnight. Confidence or trust in government slowly declined over decades, I believe, while Congress, Pres. Bush, as well as past administrations accumulated undealt-with issues that continue simmering on the back burner.

The last big issue was the Illegal Immigration Reform which turned out to be a misnomer. And despite the peoples' best efforts, congressional representatives and senators did not listen to the concerns of the people.

The confidence citizens do retain is combined with an element of "wariness" now. They're cutting back from the consumer-driven compulsive spending, buy-buy-buy attitude that has kept consumers shopping in the malls when they didn't need anything.

The opposite is true of government. From the time Pres. Bush entered office eight years ago, all we've ever heard is "consume," the economy is strong; go out and spend even if you go into debt spend. Charge it up!

The problem lies with the broke and broken government. The debt load of both the government and the people is beyond imagination. With Treasury Secretary Paulson reaching into the bottom of the barrel and finding it empty, he has comported with the Federal Reserve to "save" the financial world by increasing the valueless paper money supply. Expect inflation to climb to new heights.

Note: Congress and past presidents have ignored the signs despite warning voices such as Rep. Ron Paul (TX), Sen. DeMint (SC) and former U.S. Comptroller David Walker. They and many others have been lamenting the extent of congressional and presidential overspending for decades, yet there has been no change.

One thing that might increase the American public's confidence in their government is if they "Tightened their Belts" as most of us are doing now.

Have you heard either McCain or Obama speak about cutting government spending in any way? Possible Wise Spending of taxpayer revenues? Do they even understand what that old saying "Penny-pinching" means? Savings? Living within their means. Are they so isolated from the rest of the country, they have no idea what America is about?

The Congress and President along with both Obama and McCain have exhibited the same overspending-grow the government-expanding in all areas. Now include the free market.

While Volcker expresses his (in hindsight) push to restore confidence in government just days before the election, neither candidate has shown any such inclination to expound on good budget and policy decisions. Both have promised "business as usual" plus expansion, while totally ignoring inflation, broken economy and the unmentionable Debt.

Is "confidence" the answer to this whole financial mess or to the mess government has perpetuated? Or, could it be that we have all been living a lie for so long, we can't recognize the truth when it hits us in the head and pocketbook?

The 21st century Buzz Word is Confidence....consumer confidence; market confidence; confidence in government. This optimism and confidence has been a constant during President Bush's term in office. It was a huge mistake.

Confidence means "trust" to do the right thing. Will we?

Past budget warning articles by Bonnie Alba: "Debt is Good So Preach the Experts"

The New Economics 101: Debt = Good, Savings = Bad

© Bonnie Alba


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Bonnie Alba

Bonnie Alba is a "politically incorrect" researcher-writer. Since 1995, her articles have appeared in California newspapers. Previously she served in various Department of Defense positions for over 16 years... (more)


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