I saw the recession yesterday for the first time. For weeks I thought that maybe the recession was some government hype campaign to scare the living daylights out of Americans. I knew there were hard times in the Rust Belt states because I saw the boarded up windows and the empty factory parking lots, but these sad places were far removed from me.
I didn’t see the recession in the restaurants and barrooms which were packed most nights; I didn’t see the recession at sporting events where the stands were always jampacked; and I didn’t see the recession at the supermarkets where shopping carts still looked full with steaks and other high-priced goodies.
Then I went to the mall and I saw the recession. Now that the Christmas season is over what you see in the mall are stores with no one in them, store managers trying desperately to find something to do as they rearrange shelves again and again, and shoppers walking aimlessly with no packages under their arms, probably just killing time.
A recession officially is two consecutive three month periods of negative economic growth, a situation that we are in at the moment. But a recession is really consumers deciding not to spend money, either because they have no money to spend or they are so fearful of the future that they begin to hoard what cash they have on hand.
It looks like the Obama administration will hit the grounding running in a few weeks and tackle the recession head on with a major fiscal stimulus bill that they believe will jump start the economy. I wish them well and hope that pushing cash into our economic system will put a quick end to the recession. Unfortunately, I am not that confident about a quick end to this dismal condition.
But a recession is more about confidence than it is about stimulus packages. If Americans are afraid to spend money for whatever reason, then no amount of federal cash will end the recession. Obama will have to take a page out of the FDR public relations playbook and quiet the fears of the American people; he will have to build consumer confidence and convince Americans that better times are around the corner.
The real test of Obama’s leadership will not be putting together a stimulus bill, but instead getting Americans to put their fears behind them, go back to the mall, and burn a hole in their credit cards. From what I saw the other day, that will not be an easy task.