The Financial Crisis: What Can You Do?

On Wednesday, one of our readers posted the following comment: “This website offers hope.  Is there a way readers can help the cause?”

I’ve been thinking about that ever since, and I don’t have a good answer. The key decisions are being made by the central bankers and ministers of finance (we call ours the Secretary of the Treasury) of about ten countries, and most of the decisions they make are at their own discretion.

But I can’t avoid noticing that here in the United States we are less than a month away from a general election, which is the principal mechanism by which the public can affect the policies of our government. I watched the presidential debate on Wednesday, intending to write about the candidate’s positions on the financial crisis, but frankly there was nothing to write about. The most newsworthy moment was when, asked if the economy would get much worse, both candidates said no – which was, let’s say, wishful thinking.

It would be a good thing if the thousands of politicians up for election in a few weeks would acknowledge that we already have a serious economic problem, and that the current credit crunch is making that economic problem bigger. It would be good if they could talk about how they will get the credit markets flowing again and, once that problem is solved, how they will limit the damage of falling housing prices and stimulate the real economy. And it would be good if they could identify the reasons why this crisis came about and talk about how our financial system should be modified or regulated in the future.

As a voter and a constituent, those are questions you can ask your elected representatives. I have no experience in electoral politics and am not asking you to call or email anyone. But if you are so inclined, those are some questions you might ask.

2 thoughts on “The Financial Crisis: What Can You Do?

  1. What to do? is a question we all face individually. Mr. Kwak is quite right that the electoral process in our country affords each citizen the opportunity every two years to express an opinion at the ballot box. Sure, but does my vote really amount to much? Of course it does, because in deciding how to cast that ballot each voter must become familiar with the candidates, the issues, and deal with the question of “which candidate do i trust?” There is, though, another action we can all contemplate and that is continued participation in the economy or, in a word, now is the time to spend. I believe that if the consumer sector remains strong, our financial leaders will begin to understand that the people of this country are doing their part to spark the economy. Sure, but does my $25 purchase really amount to much? Sure it does because in deciding to spend that money, every time we put our earned funds into the financial system, we are offering a vote of confidence in the system. So, for me, I do not intend to hoard my money, wait out the tsunami, or in general hunker down. If the politicians and the financiers and the media have failed, there is absolutely no reason to think that any of them, can devise a solution to the financial dysfunction. We economic citizens have to become the foot soldiers, the infantry, to win this war. I say: stay positive and spend.

  2. MJS, notwithstanding your good intentions, I could not disagree with you more, except for showing up at the ballot box.

    Who has the desire or money to spend? The rich has everything already. Their only desire now is either protecting their investments or bargain shopping. As magnanimous Warren Buffet seems to be, he is no messenger of eleemosynary vision. Goldman is cheap now… As to the poor and jobless? They can’t participate in this economy except via debt. And the middle class? I don’t believe they can relate to your statement of “hoarding money.” They have no (discretionary) money to speak of. Ask small business owners selling discretionary products/services…

    The current financial crisis is not war. Who is the enemy? Our own confidence to spend? That confidence led many to the land of speculative debts. Instead, it’s a “mess” caused by our leaders who exploited the foot soldiers you urge everyone to become. Our leaders (economic, political, etc.) worked the system for their own salvation, at your expense, mind you. As such, the only sensible thing to do now is to “vote” your conscience, and be “selfish” in your own way that our capitalistic system requires for lubrication – and that could be either spending or holding back.

    To me, we are only at the end of the beginning of difficult economic times ahead. If the administration’s $700B ($2000+ per every American) can’t solve the problem, certainly $25 from each of us won’t even make a dent. This is not to say “give up.” Instead, realize and accept the fact that our economic hangover is here to stay for a while.

    I appreciate your intention to be optimistic. I just feel we need more than that, especially from top-down.

    JR

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