Thursday, January 17, 2008
It's the recession, stupid


Tom Foreman
360 Correspondent


It's snowing outside my office a few blocks from the Capitol. Big heavy flakes are swirling and I'm thinking about a chilly word: Recession. That's what most of you think we are in now, and trust me, the mere thought of it is sending shivers up the spines of the presidential candidates.


Months ago on AC 360 I was pounding the drum with reports saying that the economy would eventually trump the war as the big issue of this election, and trust me, when all the political experts were ignoring me, I felt like my world was a little icy. But now it has happened.

The continuing slide of the housing market, the crumbling of new housing starts, job worries, health insurance fears, the immigration debate; an avalanche of economic terrors are descending on this election.


And like snowboarders in the backcountry, the candidates are all scrambling to stake out positions before the full force of the deluge hits.

To be fair, all of them had economic positions before the polls shifted this way, and they talked about their ideas a fair amount. But now they are looking into the eyes of thousands of scared voters who are beginning to scrutinize the campaigns' economic plans much more closely.

I've never been convinced that presidents control the economy nearly as much as they think they do. I think they are like little kids standing at a video machine that they've put no money into: because the space ship sometimes goes the way they are pointing, they think they are controlling it.

Still, the president does play a role. So here is the question: What, if anything, do you think the next president should do to reverse what most Americans now believe is already a recession?
Posted By CNN: 2:07 PM ET
  12 Comments
I have an idea for improving the economy. Local governments should just put a freeze on property taxes. Wouldn't that make sense and wouldn't that put less of a strain on peoples' budgets? Seems like a simple and workable solution to me. For once let the governments make do with less in their budget than making citizens sacrifice.
Posted By Anonymous xtina - chicago IL : 2:23 PM ET
Tom,
My suggestion is for this government to stop giving all of our money out to these other countries like Pakistan, Iraq, and others and put it back into our economy! I mean we give these nations millions and what do we get in return...squat!

I also think we need to have HUGE tax penalties for all American companies that outsource jobs to other countries. I mean they are making a killing with the cheaper labor while we are going jobless!

We also need to totally cut out all earmarks! The money saved on those alone can do wonders for us!

But I don't believe in bailing anyone out from any foreclosures or any of that! That will do us no good!

I have more but I'll stop there! LOL

Cynthia, Covington, Ga.
Posted By Blogger Cindy : 2:34 PM ET
Some radical ideas from someone who is not a conservative Republican ...

Tax corporations who send jobs overseas leaving millions of Americans without one (or at the very least provide job retraining so they can get another job other than as a Wal-Mart greeter);

Limit the profit one can make before they have to give bonuses, raises, etc. to their employees (i.e., reinvest in their company and employees). In other words, how much profit is enough? And at what expense? The shareholders may be happy but they make up a tiny amount. If the workers are unhappy and/or cannot buy the products made when their jobs were shipped overseas, kind of defeats the purpose. If I lost my job because you sent it overseas, I don't have the money to purchase the product being shipped back. (And it really is hard to feel sorry for a company who's profits are down from say $1.5 billion to $1 billion.)
Posted By Anonymous Lisa, Elk Grove, CA : 3:18 PM ET
I'm not sure what they should do, but I can tell you one thing they shouldn't do - they shouldn't start an open-ended war and dump hundreds of billions of dollars that could more profitably be used elsewhere into it.
Posted By Anonymous Arachnae, Sterling VA : 3:41 PM ET
Hillary said it in the Las Vegas debate, "We should have an energy policy right now putting people to work in green collar jobs as a way to stave off the recession, moving us towards energy independence." This can be like FDR's New Deal. Respond to a recession by generating jobs that will move America forward. At first, the US Government will have to lead by investing heavily in this industry. Eventually, the burden of investment and employment will shift from the public to private market participants. This will create a whole new market, where the US can be an industry leader. Energy prices would come down as technology advances and would not be driven primarily by volatile commodity costs. And as Hillary said, this reduces our reliance on Mideast oil. Then our foreign policy can be more about "what is right" versus "what suits us best".

There will never be a day when the United States has low labor costs. Jobs will always be outsourced to where labor is cheaper. The way for our economy to thrive and provide a supply of good paying jobs is to be a continual industry innovator. A green energy policy does just that, and a whole lot more.
Posted By Anonymous Jason, New York, NY : 3:43 PM ET
LOL!
I can agree with the not sending jobs overseas (tho technically I am a canadian working an American job) or at least limit the number to lets say 20 - 30% and I also agree with the fact that our good paying jobs are sent overseas (parirty has its downsides)to make products that we can't afford to buy. Yes, clothes is now dirt cheap at walmart and Zellers but I can still only really afford to go to Salvation Army/Frenchy's/etc to buy my clothes because FOOD/Electricity/GAS (well I walk actually)/PH & Internet/Rent still cost a pretty penny (Rent and Food alone are hard enough). Though thanks to Free Trade agreements getting those companies to comply might be impossible.

G. Shane Betts Williams Halifax, Nova Scotia, Canada
Posted By Blogger Shane : 4:04 PM ET
Tom,
I have enough problems managing my own finances, so I probably shouldn't be making suggestions to the government. But what about a WPA New Deal Program such as was used in the Great Depression. Repairing our crumbling infrastructure would certainly create many jobs. So would a search for alternative sources of fuel. The space program was the impetus for a huge boost to the economy. Why not have a similar program to prevent global warming. OK, maybe I'm thinking outside the box here, but hey, that's my specialty!
Posted By Blogger Barbara in Culver City, CA : 4:10 PM ET
Does Congress have the power to tell a company how much money they can make? If so, how would the movie studios and fast food giants like it if the federal government dictated their profits? Neither should Congress get to tell oil companies that even tho the demand is there, the price of their product is now under government control. I think a better way is lower taxes for all income brackets. If you're not getting a raise soon in your job, lowering taxes is the only thing that will put more money in your pocket.
Posted By Anonymous xtina chicago IL : 4:19 PM ET
Perhaps a President doesn't have direct control of the economic direction of the country, but his policies can alter the depth and length of economic downturns.

The best way to slow the course of this recession is to reverse many of the economic and war policies of the Bush administration.

We cannot continue our descent into massive debt in order to fund endless wars.
Posted By Anonymous Joseph Kowalski, North Huntingdon, PA : 5:46 PM ET
The next president needs to simply let the market correct itself naturally. It may sound cruel but our economy is nothing more than the result of the me generations we've produced living outside of their means for too long. America needs to suck it up, stop being so materialistic, and get back to a simpler life. And no, the government shouldn't have to bail out grown adults who should have known better than to spend the ridiculous amounts they did on a bunch of garbage they didn't need or a house they never could afford to begin with (if a regular bank won't give you a loan, there's your clue you probably shouldn't try to buy it). It's not the president's responsibility to clean up American's messes. It's not the duty of Congress, either. It's the responsibility of the adults who made poor choices, didn't save while they could, and got themselves in a bind. Planned correctly, people can survive horrible things. I have no sympathy for those who don't plan. I don't think my tax dollars or leaders should, either. Oh, I did lose a job once. I saved enough to take a year off (could have done two if I wanted), figure out my mom and friend's deaths while I was off (because everything crashed down in a three and a half year period before the job loss), and go to Europe in the interim. It's called planning. And no one had to bail me out of anything.
Posted By Anonymous Tammy, Berwick, LA : 6:33 PM ET
The government should do nothing because this is all our own fault. Our greed has gotten us to where we are. We want to be paid well yet we're not willing to pay a fair amount in return for those goods and services therefore they're outsourced to other countries to save on labor and materials. Our companies are not happy with just making a profit. Each year must be better then the last therefore our jobs are again outsourced.

I work in the meeting planning industry and those little tote bags that are given away - all made in Asia because it's so cheap (less then a dollar per bag there compared to almost $4 per bag here).

Our children have become too lazy to continue higher education therefore we're losing our ability to compete. Our greed knows no bounds...we buy houses that we cannot afford thus over inflating the housing market prices...carry amazing credit card debt because we "want" and save nothing. We are well on our way to becoming a third world country unless we wake up and start taking responsibility for ourselves.
Posted By Anonymous Missy, Los Angeles, CA : 7:57 PM ET
Dear Tom,

The recession was already clearly noticable in our wallet during recent Christmas 2007 spendings and the bonus were slim. I remember a doorman (NYC) crying, because his tips were just about 33% of what he used to receive every year for the Holidays.

It is not just middle class anymore, but also the working class.
Posted By Anonymous Ratna, New York, NY : 9:46 PM ET
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