TERRY SAVAGE email@example.com Mar 9, 2009
These city workers are among the 90 percent of Americans who are working, a percentage we would do well to keep in mind.
Updated: May 3, 2013 12:14PM
The fear factor is taking over the markets, the economy, and the public psyche. And no matter what programs, speeches, or photo ops the new administration stages, it won't help restore public confidence.
This is not to say that "positive thinking" can turn the stock market around, or restore jobs, or create incentives for business to expand production, or even for consumers to start spending again. That would require real incentives -- things like lower tax rates on risky investments or capital gains. Or tax breaks for entrepreneurs to create businesses and expand hiring.
But a little positive thinking could be just what the country needs right now.
One of the great motivational books of all time, The Strangest Secret by Earl Nightingale, was written 75 years ago. The "secret" was this: "We become what we think about!"
And all we think about and talk about these days is economic failure. The latest headlines about unemployment are just the latest example. Yes, more than 8 percent of the population is unemployed, but that means 90 percent are still working.
This is not meant to be a paean to Pollyanna. But it is a request that we start putting all this bad news in perspective. Especially the media, and the administration.
Last week, Sheila Bair, who has done a great job as head of the FDIC, inadvertently raised the fear level with the announcement that the FDIC fund was running low. How ridiculous! They have a direct line of credit from the Treasury for $30 billion. And does anyone think the government won't extend more help to prevent a run on the banks?Now there's a bill in Congress to extend the FDIC's line of credit at the Treasury to $500 billion -- by dodging TARP limitations. This is politics at its worst. Everyone knows that whether labeled TARP or Treasury, all the money comes out of the same pocket -- yours!
Then the president bashed the AIG bailout revision. Of course, this failing company could not pay 10 percent interest on the money it received. Despite the phenomenally stupid credit default guarantees this company wrote, the government won't let it fail.
We're scaring people beyond belief. Here are excerpts from e-mails I received in just the past two days, regarding the safety of money in banks and insurance companies:
"My husband and I are in our seventies. We have our entire retirement fund in Bank CDs. Every day we hear more dire reports concerning [our bank]. And now The FDIC is almost bankrupt. We are worried and feel we should take our money out of the bank, but where would we put it?"
The simple fact is that the weight of the government stands behind all insured bank deposits. The Savage Truth is, there aren't enough trees on the continent to print all the paper dollars that would be necessary to give every depositor his or her cash. We all understand that our banking system is built on confidence. Political bickering only undermines confidence, and the system.
"I have retirement annuities with AIG. How is AIG insured and should I move it out of AIG into another company or different product in another company or a CD?"
Despite the fact there is no federal backing of insurance company products -- the government will not let major insurers fail. Most large insurers have reserves for unexpected events -- whether hurricanes, earthquakes, or financial uncertainty. But the government can't let big insurers fail because they'd bring down the system. So let's stop bickering over the details of the AIG rescue, and revisions, and get back to work on the economy.
JFK -- a positive example
Economic growth solves most of these problems. Tax cuts are the prescription for economic growth. That is not a partisan political analysis. Proof? Try this statement from President John F. Kennedy on July 17, 1963: "The most urgent economic business before the nation is a prompt and substantial reduction and revision of federal income taxes in order to speed up our economic growth and wipe out our present excessive unemployment."
President Kennedy is remembered not only for his tax cuts, but for his positive attitude. He said we could put a man on the moon. We believed him and we did it.
We can't let fear rule today. Let's try the power of positive thinking, for a change. Let's think about prosperity. Yes, we need sensible tax and spending policies to get us there. But let's stop looking down, and start talking UP! At least we'll be thinking in the right direction. And that's the Savage Truth.