Wisdom from The Action Wisdom In Action

The Consumer Confidence Problem

Have you noticed how often talking heads and pundits are claiming that the major problem with the economy is one of consumer confidence. Get real!

Today, consumers are being financially whipsawed from all directions. Home equity reduced if not eliminated, stock portfolio’s squished, and 401K and other retirement savings decimated. Credit availability scrunched what with banks reducing credit lines on home equity lines and credit cards. Even for consumers paying their bills timely.

Sure consumer confidence is low…but more importantly, wallets are near empty. Or even empty, on some days.

Now there have been times in our economic history where a consumer confidence problem has been the driving factor to economic malaise (like after 9/11). But, let’s stop trivializing today’s economic problems with talk of a consumer confidence problem. The reality is that there is a consumer reality problem. Today consumers are in the toughest financial spot they have been since the depression some 70+ years ago. Tougher than most have been in their life!

The starting point for addressing any problem is getting real.

The U.S. Government must get real, as must state and local governments. Companies must get real if they want to survive. And, individuals must get real if they want to move beyond survival to a position of prospering in these tough times. Only with a realistic assessment of where we are can we chart a sound plan for a better tomorrow.

So let’s not get sidetracked by talk that all we have is a consumer confidence problem.

Starting Sunday: A six part series on why I expect the recession to be deeper and longer than many currently expect...and why I believe that there will be opportunities to prosper nevertheless.

Posted by Cute at 6:18 PM