Sometimes, I wonder how much the media is driving the lack of confidence in the economy. I open the virtual paper, and see articles on how housing prices in Los Angeles have slipped to 2004 levels. I see reports that there is a 97% chance of a major earthquake in Southern California in the next 30 years. Oh yeah, that will buoy the market. Bankruptcies are soaring, and most people worry they can’t pay their mortgage. Oil prices are surging, food prices are surging, and major retailers are facing bankruptcy.
With all this news, is it any wonder our confidence is spiraling into the toilet? Remember that FDR said that our biggest danger is fear itself, and these fears are just making things worse and worse.
Those of us who have raised small kids recognize a panic cycle, and how sometimes a single gentle potch can stop the cycle. We need some bold move to break this cycle of lost confidence. Alas, I don’t know what it is, and I don’t think the current administration has what it takes to make such a move.
