I recently heard Dave Ramsey say “The essence of our economy is based on the people’s faith”. In other words do people believe in the economy, the conditions and those who influence the economic policies and the subsequent impact on our future earning and buying power. I thought Dave’s statement was profound and then I began to think of our current situation.
We’ve lost faith in our government’s ability to manage our economy effectively. We hear about the “bailout” of major firms then we hear the same firms wasting our money on corporate jets, trips to exotic places to have meetings and using our money only to buy up other firms in trouble. Meanwhile the public sentiment is clearly indicating a lack of faith in government decisions and the state of our economic affairs.
Consider that one third of the retired sector has lost all their retirement funds in the stock market this year. Consider that over 3 million people are on the verge of home foreclosures. Consider that the big three automakers have indicated they will be out of money within months unless the government bails them out and even then there is no certainty they will survive. Just consider all the negative news and the implications that continue to emerge like a tsunami of negative information that reinforces “we the people” lack of faith in our policy makers, our corporate leaders and the future for our children.
Faith is defined as the substance of things unknowable and unforeseen. We spend with some certainty of our ability to pay for what we buy, either today or tomorrow. This certainty is largely driven by our certainty on being employed. Business grows based on some certainty that consumers will buy their products and services. The substance of our economic conditions clearly indicates a sentiment that “we the people” don’t believe things will get better soon and anything out of Washington is clearly uncertain and unbelievable which breeds a lack of confidence and further uncertainty. Subsequently the uncertainty reduces our faith which changes our spending behavior because we are not sure and do not feel certain that the economy will sustain our lifestyles, our bills and our near term future desires and needs.
In other words the lack of faith is spreading like wildfire and can only be turned around when leaders provide real, truthful and trustworthy information. When leaders act responsibly and not irresponsibly is when faith will be restored. Then and only then will the people begin to believe that things just might get better and some confidence will be restored. Right now people trust what their friends say, what their network publishes and ignores the traditional news and media because faith in these resources has been significantly damaged over time. In other words we have faith in each other but little in those that are supposed to lead us.
Until these things change it is not an economic crisis rather it is a crisis of faith.
Get it? What say you?