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RE-OPENING The ECONOMY: This Time It’s Different, Personal Responsibility is THE KEY!

Updated: Jun 6

As a specialist in consumer credit and debt (author of CREDIT CARD NATION [2000]), one of the earliest forecasters of the 2008 Financial Crisis (see IN DEBT WE TRUST documentary [2006]),  and advisor to many members of US Congress and Senate (see enactment of 2009 CARD Act), I vividly remember the empty malls and general malaise of American society during this period.  The sharp fall in consumer sentiment was understandable following the scandals of Wall Street, the lack of vigorous enforcement of illicit financial schemes, the abrupt collapse of the housing market, and the overnight contraction of available consumer credit.  Confidence in the US economy plummeted as home foreclosures, unemployment, and bankruptcies soared while major corporations received billion dollar subsidies and their senior executives  received million dollar severance packages.


Although the Obama Administration pursued a pro-business policy agenda, as highlighted by its bank recapitalization policies (eg, TARP), it sought to appease the progressive wing of the Democratic Party with its more stringent regulatory policies toward “Too Big to Fail” financial institutions. This was codified by the passage of the Dodd-Frank Act of 2010. The US economic recovery, which fueled the global economy with its enormous debt-based consumption/growth, proceeded with an understanding that American families and consumers required much greater protections such as the establishment of the Consumer Financial Protection Bureau (CFPB)—the brainchild of Senator Elizabeth Warren. US consumers responded with more confidence as job growth and consumer credit fueled the economic recovery.


Today, the situation in America could not be more different. The Trump Administration’s systematic dismantling of pro-family/worker/consumer rights along with environmental protections and regressive tax policies have undermined the path for a rapid US economic recovery. Not only are these policies exposed by OSHA’s failure to enforce Covid-19 protections for “front-line” workers (eg, lack of face masks in hospitals, meat cutting plants, retirement homes) but by the Trump Administration’s proposals to immunize businesses (but not workers) with liability “shields” for more rapidly resuming economic activities. And, by rejecting the world’s leading scientific guidance on the Coronavirus, such as policies to limit its spread, US workers and consumers are very wary to resume normal social and economic activities.

The situation has been exacerbated by the failure of the Trump Administration to swiftly respond to the Covid-19 pandemic based on recommendations of infectious disease experts. This lack of national leadership has resulted in a patchwork of state governors’ policies with early opening of local economies, uneven enforcement of social distancing and face mask requirements, and chaotic virus testing programs. And, with multiracial/cultural/immigrant Black Lives Matter (BLB) protests, sparked by the public murder of George Floyd by four Minneapolis police officers, the continued spread of COVID-19 is expected. Furthermore, President Trump’s refusal to wear a PPE face mask in public has been viewed as a macho, political statement that has been emulated by his most ardent supporters. The result is an inchoate set of national policies that foreshadow a potentially virulent “Second Wave” in the Fall and Winter.


As the US and the rest of the world transition to phased-in social and economic “normalcy,” the key—like consumer sentiment—is the exercise of personal/social responsibility. As state and local governments implement new policies, it is the responsibility of individuals to respect and appropriately respond to these new protocols. The importance of social responsibility is underscored by the consequences of individuals who selfishly fail to adhere to these new rules and their personal responsibility. For example, a single hair salon employee in Missouri was found to have directly infected 82 patrons after she returned to work last month.


An instructive international example is the recent experience of the Indonesian LION AIR which also includes Batik Air and Wings Air. It began slowly by reintroducing short-haul flight routes on May 10. But, the company announced that all routes have been again suspended as of June 5th. This is due to the widespread resistance of passengers to properly observe coronavirus-related rules such as social distancing and health disclosures. According to the company, "many prospective passengers were not permitted to travel because they did not complete the required documents and conditions during the Covid-19 pandemic alert period."


The Jakarta-based airline had taken steps to ensure on-board customer safety, such as restricting use of middle seats, deep-cleaning planes and replacing HEPA filters on aircraft where any passenger had been suspected of illness. In announcing the decision, Lion Air specifically cited its concern for employees' health, especially cabin crew at risk of contracting the coronavirus from travelers. The few international flights offered by the airline also have been canceled.


The LION AIR example illustrates that the magic wand of restoring consumer confidence must be balanced by promoting personal/social responsibility. Like the successful national savings campaigns during WWII, the acceleration of the resumption of US economic activities will depend on consistent and effective national-state-local message campaigns that urge the patriotic duty of all Americans to STAY SAFE… STOP THE SPREAD… KILL THE VIRUS… Until President Trump makes a policy statement by publicly wearing a PPE face mask and promoting personal responsibility, the likelihood of an uneven and weak economic recovery will remain America’s current reality.



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 FIGHT THE SPREAD!  KILL THE VIRUS!!  STAY SAFE!!!!