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An Economic Campaign Promise I’d Love To Hear

mccain-obama.jpgOkay, I’ll admit even I am starting to get scared. No, I’m not concerned about my asset allocation policy, my mutual fund investments, or the US economy as a whole. What scares me is the economic ignorance of our two Presidential candidates and the American public.

Certainly, this has been an interesting time for the economy. It was also a great time to have done a meditation retreat, gone camping without your Blackberry, or in general been out of touch with any daily news media. Had you turned off your TV on September 14 and turned it on again a week later, you would have concluded it was a pretty boring week for any long-term investor. The Dow ended the week about where it started, a real yawner.

Here is what you would have missed. First was the 800-point drop during the first part of the week, followed by an 800-point gain at the end of the week. That was fun, and it got me interviews with every TV station in Rapid City within a two-day period. Yesterday and today have been similar, down 777 yesterday and up 400 (so far) today.

You would have missed watching a host of talking heads, mostly thirty-something reporters visibly scared to death, saying things like, “the US economic system has failed,” and reporting the financial markets were in a general meltdown. That wasn’t much fun, as most of the panicked calls from clients last week (five to be exact) were the result of being scared to death after watching a panicking talking head. My advice is to stay away from Fox News…I just can’t beleive the unhinged commentary I am hearing. It’s shocking.

You would have missed both Presidential candidates blaming Wall Street fat cats, the President, the Congress, the SEC, the Federal Reserve, and each other. That was the scariest part of the past two weeks for me. Either they are making calculated and manipulative use of the ignorance of the American public, or they don’t understand the economy.magic-wand.jpg

If I could wave a magic wand, this is what I would love a Presidential candidate to have said this week:

“The US economy is massive. Regardless of what the media or my opponent may say, the President really doesn’t have a lot of power to do much about the economy. Sure, the President has some minor influence on the economy through the Treasury Department, but the President doesn’t control the Federal Reserve, which has enormous influence. Neither does the President completely control the Congress, which controls spending and tax policy. If voters are really concerned about the economy, they need to focus on who they elect to Congress this year. Your Representatives and Senators will have far more effect on the economy than either my opponent or me.

“Beyond that, the one factor that will have more influence on your economic well-being than anything else is the financial choices you make in your daily life.

“If elected President, here is what I’ll do to really improve your economy. I’ll start a massive national education initiative to educate every American on how money works—how to wisely save it, spend it, and invest it. I’ll require every school, starting in kindergarten, to provide financial education to teach children how the economy works and how to make sound money decisions and investments.

“In addition, I’ll use my influence to turn our focus as a nation away from consuming and toward investing. I’ll encourage our citizens to live on less than they make. And I’ll use my veto powers to force Congress to lead by example, making sure the US Government doesn’t spend more than its income ever again.”

Such a statement wouldn’t have the drama of recent news reports on the economy. But, given its accuracy and its potential for long-term change, it would certainly be exciting to me.

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3 Responses to An Economic Campaign Promise I’d Love To Hear

  1. Irene Tomkinson October 1, 2008 at 7:12 am #

    Please please send this to the Obama campaign….love your stuff…IRene

  2. Bobbie Munroe October 2, 2008 at 11:47 am #

    Rick, I agree with Irene…PLEASE!

    To reach the Campaign Headquarters by phone, please call: (866) 675-2008

    You can contact by mail at:
    Obama for America
    P.O. Box 8102
    Chicago, IL 60680

  3. Richard Trachtman October 4, 2008 at 4:31 am #

    Rick,
    I think you are leaving out that our economy runs on trust and that if eveyone panics and banks won’t lend to each other or to businesses or people who need to buy cars or fix thier homes, there could be a downward spiral, from which it may take a long time to recover. It has happened before. It probably won’t happen, but never say never.

    I agree that a long term strategy is best and we need lots more financial education. That education needs to include understanding that there will be crises and how to weather them.