Confidence is key as the President addresses Congress on jobs
August 30, 2011
"The only thing we have to fear is fear itself."
In the midst of the Great Depression, Franklin D. Roosevelt signaled the tone he would set in his presidency with that statement during his first inaugural address. Can President Obama summon a similarly stirring message when he addresses a joint session of Congress on jobs Thursday night?
A matter of confidence
Confidence is the key to the current situation. Overall, corporations and consumers are in better financial health than they were three years ago, but the economy is caught in a catch-22. As long as no one believes the recovery will last, consumers won't spend and business executives won't hire. If those things don't happen, the recovery really is doomed.
A shot of confidence would go a long way towards addressing this problem. President Obama's address is an opportunity to start rebuilding confidence, but unfortunately, the government's role so far has been to destroy confidence rather than inspire it.
Both the debt ceiling negotiation and the budget deal that followed it created serious doubts about the ability of this President and this Congress to govern together. Both parties need a better performance on job initiatives.
Are they capable of that? So far the signs are mixed. Some Republican leaders are identifying areas of common ground with the President, but other members of their party are already abdicating the responsibility to govern by announcing plans to skip tomorrow night's address.
CD, savings, and money market rates reflect bank confidence
Savings accounts and other deposits also have a stake in the jobs discussion. Low CD, savings and money market rates reflect low levels of confidence by banking executives. They are not confident they can lend profitably or find attractive investment opportunities in the current economic environment. Absent the need for capital, they are not willing to pay higher interest rates for deposits.
A great deal is riding on the discussion that tomorrow's address will initiate. It may turn out that the only thing we have to fear is partisan bickering; unfortunately, that has turned into a pretty scary force in American politics.
