Welcome, Mr. President. The people of America have a lot riding on your success, and we wish you well. Sure, there will be debate about your specific plans to fix the economy, but we are united in hoping you succeed.
We recognize you face a huge, unprecedented challenge. Last year, global stock markets lost an estimated $30 trillion, not to mention the trillions more lost in housing values and commercial real estate. Or the multi-trillion dollar bubble of now-worthless derivatives on bank balance sheets. Add it all up, and it's probably $60 trillion down the drain. (And don't forget the $50 billion lost by Madoff investors.)
Even the release of the remaining $350 billion from TARP is a pittance against those huge global losses. And even with the Fed and the Treasury now buying mortgage securities, and investing in banks and auto companies, and guaranteeing debt of public companies, your stimulus plan will still swim against a huge tide of write-offs.(
We know from history that stimulus plans don't have a good track record of success. Even after the stimulus plans of the 1930s, we know that the unemployment numbers were twice as high at the end of that decade. In the 1990s, we watched Japan create several waves of massive stimulus plans, only to remain mired in deep recession for more than 10 years.
We know all this for a fact. And yet at this very moment, the entire world is hoping that you can turn that tide, return the American and global economies to prosperity, and make financial sense of our future. It's a bit past the season, but today you are viewed as the global Santa Claus, capable of being everywhere, doing everything and granting all sincere requests.
A letter to Santa:
It would be presumptuous to give you advice -- especially since you've chosen an outstanding group of economic experts to advise you. But since we're all in such a hopeful mood, would you be willing to look at a simple "wish list" from the American public?
Consider it as a child's letter to Santa. We're old enough to know the truth about Santa, and the economy. But still we want to believe. In that spirit, here's our list of economic benefits our hearts desire.
1. Please don't get into big political fights, especially with your own party. And the other guys, too. We can't be the only kids wishing their parents would stop fighting and start acting like grownups should.
2. Please figure out how to really help people with their mortgages. Don't just give us another toll-free number to call. We've tried and simply can't get through. And don't work through those government agencies, Fannie and Freddie, which are still headed by people worried about their own jobs and bonuses.
3. Please remind Congress that it's
money they're handing out. We have children, and they'll have children. How can they possibly repay what we're spending? Please don't sacrifice our future by postponing the bills to pay for your plan.
4. Please remember that America was built by entrepreneurs, who believe in the free-enterprise system. We don't work to pay taxes. We're really working for our take-home pay, and there's too little left after taxes already.
5. Please fix health care. We simply don't know who is to blame for this mess. Yes, it would be great to get everything computerized. But it would be better to figure out how to give everyone basic health care, without having the government run the system. (If Washington couldn't handle TARP, we don't want you messing with our doctors.)
6. Please keep our country safe. But also, please don't sacrifice the lives of our sons and daughters unless we're sure it will contribute to making the world a safer, better place.
7. Please restore our faith in the essential fair application of our laws. Whether it's civil justice or military tribunals, whether it's business executives or impoverished teens, please demand equal justice throughout the land.
Well, that's a pretty presumptuous wish list. Readers are invited to add to the list at my
. But if you can get our economy back to work, we're willing to work hard as well. And we will also realistically understand that there is a cost we must pay for the mistakes of the past.
For Santa, we leave milk and cookies. For you, we send our tax dollars and our prayers.
Americans, and most of the world, are celebrating with you this week. Like Santa, we're hoping you can grant our wishes. And that's The Savage Truth.
Terry Savage is an expert on personal finance and also appears as a commentator on national television on issues related to investing and the financial markets. Savage's personal finance column in the Chicago Sun-Times is nationally syndicated. She was the first woman trader on the Chicago Board Options Exchange and is a registered investment adviser for stocks and futures. Savage currently serves as a director of the Chicago Mercantile Exchange Corp.