President-elect Obama's presentation of his economic stimulus plan last Thursday was thoughtful, clear, and excellently delivered. Despite its charismatic delivery, the speech concerned me. First, the soon-to-be-president sought to lower the expectations of the American public concerning his first term, create a sense of unity, and to communicate a huge number of details about his economic plan. This was too much territory to cover in one short speech.
Unfortunately, his comments may have the unintended consequence of taking away the very confidence he wanted to give to the nation. I was shocked that the “Yes we can!” presidential candidate sounded more like a technician than a visionary. Hope was present, but the audacity of hope was nowhere to be found.
Consider his words, “If nothing is done, this recession could linger for years. The unemployment rate could reach double digits.” Even if these are potential realities, he is painting a very grim picture. He went on to say, “Our economy could fall $1 trillion short of its full capacity ... We could lose a generation of potential and promise, as more young Americans are forced to forgo dreams of college or the chance to train for the jobs of the future.”
Like a salesman that does not realize that he has already secured the contract, the president-elect continued to make the case that the nation needs to trust his plan. In addition, his emphasis on the role of government seemed a little baffling — especially in light of the criticism by many experts that we are becoming a “socialistic” country.
I am concerned about the heavy emphasis on the government’s role versus job creation through small and medium sized businesses. Many Americans are convinced that a revival of the innovative and entrepreneurial spirit of our nation will be key to our victory.
Ironically, these two factors kept the “master communicator” from giving the nation what we need most — passionate confidence or hope. Barack Obama, more than most, knows that words matter.
In order to beat the economic problems we face, both leaders and the media must vigilantly watch what and how they communicate. Whether they like it or not, today's media often creates more history than it reports. Leaders also can shape the public's thinking by what they choose to say and they do. The negative effect of media and government communications was demonstrated by how the media over-emphasized our national financial woes during the Christmas season.
Hearing news commentators repeatedly report that Christmas sales were going to be down during the holidays set many shoppers on a scavenger hunt trajectory vs. their normal holiday shopping ritual. To our family, this meant that the post Christmas sales would be significant because we knew we would get more bang for our buck at this crucial time. We waited to buy many of our gift items until after Christmas. We also used gift checks to let the recipient find the truly outstanding deal. For most families, money was dribbled out instead of being shoveled out. Shopping in many malls became an outing for food and sightseeing more than an occasion for serious purchases.
Experts reported that retail purchases, excluding automobiles and gas, fell dramatically this holiday season. Specifically, women’s apparel sales were down 23% this year vs. last. Men’s apparel was down 14%, and electronics and appliances dropped 27%. These losses are actually worse than they sound because retailers had already slashed prices to unhealthy levels before Christmas. When you are giving the products away, you can’t make it up on volume.
Dan Butler of the National Retail Federation told Jayne O’ Donnell of USATODAY, “Consumers had a reawakening… voting with their dollars now.” It seems that a fundamental shift in consumer behavior is occurring. A Consumer Reports National Research Center survey projects that 22% will pay off debt in March or later. Last year 31% of the public paid off their bills in March or later. This means most of us are not going to get out on a debt limb. The average consumer seems to be settling in for a long economic fight. Unfortunately, a “bunker mentality” will make our recession longer and recovery harder.
Many can’t help thinking about their 401(k)s which have dropped by 45%. Charles Schwab makes the clearest articulation of what most folks feel. “To be a successful investor you have to have the component for optimism. You have to believe in the innovation of the human mind and the human spirit. That is what investing is all about---frankly, being a part of companies that create new value. And that will continue to be true. But we go through these undulations in the process of discovery.
The bottom line---you have to be somewhat optimistic and know that the future will be better than the past.”
In light of Schwab's statement, we can deduce that the media should begin to report strategies for small business turnarounds and stories of jobs being saved. They need to encourage us by doing profiles on optimistic business leaders who have made things happen. We want to hear about people who represent the American spirit by being in the trenches, creatively finding ways to enjoy life in spite of the economic setbacks. Once President-elect Obama takes his seat, his early steps will be important.
I am sure that America’s economy will rise again. Our optimism will be key in helping us regain our groove. Change experts say that celebrating early victories is often an important part of building unity and momentum. The media helped get us into this mess. Now we need them to help Mr. Obama and his administration get us out!