Earn What You Spend

Make no mistake, this is a terrifying time.  It is unlike anything I’ve seen in my lifetime.  At the heart of it is a lack of confidence and a deep uncertainty about what will happen next.

The President addressed the nation this morning:

“The United States government is acting; we will continue to act to resolve this crisis and restore stability to our markets,” Bush said in an eight-and-a-half minute statement in the White House Rose Garden aimed at calming Americans’ growing fears.

“This uncertainty has led to anxiety among our people. And that is understandable, that anxiety can feed anxiety, and that can make it hard to see all that is being done to solve the problem,” Bush said.

It reminds me of former Treasury Secretary Robert Rubin’s excellent book, In An Uncertain World. Secretary Rubin writes that his greatest challenges in facing some of the economic disasters during the Clinton administration (Mexican Economic Crisis; the Asian Financial Crisis) was not figuring out the type of policy to implement.  Rather, it was how to restore confidence, to restore belief in what we’re doing.

Stocks continue to tank because of the uncertainty.  Restoring that is paramount to getting us back on the right track.

We thought the $700 billion bailout would be the boost we needed.  Now that feels like a lifetime ago.

Updated: I just came across Gallup’s Consumer Rating of the Economy:

Source: Gallup

As Gallup mentions, this is a record crisis of confidence.