I would like to touch briefly touch on a subject, if I may. This is a highly complex issue that one could write numerous books on, and many have. The economy. I however, intend to give some brief comments based loosely on fact but primarily on what most individuals in this country seem to be basing their opinion, perception.
Reports from the Labor Department the beginning of April showed that employers across the nation add 230,000 jobs and caused the unemployment rate to drop from 8.9 to 8.8 percent, the lowest rate in two years. In terms of percentage, that seems like a insignificant drop, and that may be the case. The vast majority of economists agree that after a downturn in the economy, unemployment will be one of the last portions of the measured economy to rebound. We will likely be seeing a high unemployment rate for the next few years, but the economy is improving. The market is up, consumer spending has rebounded, and firms are hiring despite the show rate. However, in regards to American perception, this matters little. A CNN poll conducted recently showed that 58% of Americans who partook in the poll do not see the economy improving.
What is the reason that such a large number of Americans have no faith that the economy in improving despite all the “experts” telling them otherwise? The reasons are numerous, but let just say even people with full-time jobs has been negatively effected by the recession. People see all these negative effects and have a hard time believing there is any improvement. This view is egocentric. Now I'm not trying to come down on the millions who have lost their jobs, had hours or pay cut. However, it shows that people don't see the economy as the collective trade between millions of people and dozens of nations. They, understandably, see it as their bank account, their unmanageable credit, or their foreclosed home. It will be some time before perception on this subject will see wide improvement.
So why families are still suffering, many are still looking for who to blame and who they feel should fix the problem. Seemingly, a considerable amount of citizens in this nation look toward the government for both parts of the question. And why not? The government is a massive face of this nation and has been charged with protecting and serving many aspects of our lives. However, the government only shares a portion of the blame for this great recession.
Again, perception. It is perception of this nation that seems them as the problem and demand that they are responsible for the fix. We still live in a free market society, this crash was caused by a very complex housing market. I will not going into specifics because again, books could be written on the topic. But ultimately there was a wide issue of acceptance when it came to shady business practices and putting people in homes they simply could not afford. And it can not just be blame at the greedy, fat-cat Wall Street level. It happen from Bank of America executives packaging up horribly bad investments with virtually not value and selling them for absurd prices, to the smallest broker shop raising a borrower's income 20% on the application.
Did this industry do this because everyone who sold mortgages around 2006 was a terrible, greedy person? No, I believe that most people do what they perceive to be right, but I equate the actions of the industry to the collective internet community. Have you ever downloaded a movie or song without paying a dime? If you said no, you're lying, so ultimately most of us are guilty of a pretty serious crime. This is exactly the mindset that ran rampant through the housing market. It became “well everyone else is doing it and it is helping their business, so it must be an accepted practice” or “if I don't fudge this borrower's income, the bank down the street will”.
That's exactly the problem with placing blame in this situation, there is way to much to be spread around, and no one wants to blame a free market that we cherish. So, in turn, it became easy to blame the government, they're usually the bad guy anyway right? Now, some have pointed to the fact that the government came up with the “stated income” loan that caused much of this problem. That would be similar to suing Volkswagen after you took your Jetta offroading. The product was designed for consumers such as newly self-employed borrowers who had massive earning potential but little to no income documentation, not for a construction worker with years of consistent W2s. State income products were intended to about 2% of the population and used on about 40%.
In this I am not defending Obama's or attacking Bush's economic policies. Because Bush is largely not to blame for the downturn and Obama is not to be praised for the recovery, at least not on the whole. I believe in a free market, but like everything else, it is not perfect. It makes mistake and when those mistakes people of that free market should not resort to scapegoating.
http://www.bls.gov/news.release/empsit.nr0.htm
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