When we emerge out of this recession, this nation will be a changed place, according to Joe Nocera, a business columnist for the New York Times
Nocera spoke Thursday evening as part of the Arthur M. Blank Family Foundation Speaker Series, exploring issues important in today’s society.
Nocera provided his views on the current economic downturn as well as his thoughts on where we’ll succeed and where we’ll fall short.
“The crisis will change behavior,” Nocera said. “If it doesn’t, we are all in trouble.”
A whole new generation that has not experienced a major recession is now having to learn how to become more risk averse. Nocera talked about the generation that lived through the Great Depression and how they were sure to try to pay for goods with cash.
“In the 1970s, our generation discovered the joys of debt,” said Nocera, adding that this economic downturn has exposed the problems of being too leveraged. “Hopefully people have been scared enough, and we will have the next generation being a little bit more risk averse.”
Debt was not a problem limited to individuals. It’s debt that “got us into this” economic recession.
“The entire country was living beyond its means on every level,” Nocera said.
And we’re still paying the price. Nocera said in his talk that General Motors likely will declare bankruptcy by May 31, and the question will be whether GM will make cars that people want to buy.
Nocera also disputed some notions.
“This is not a depression. In fact, it’s not even close,” Nocera said. He then compared unemployment and foreclosures in the 1930s to the current day numbers to prove his point.
“We are not there, and I don’t believe we will get there,” Nocera said. One big difference is that since the depression, several safety nets have been put in place; and the current government is being proactive to make sure the banking system doesn’t collapse and that the economy receives plenty of stimulous funds.
Nocera said the economy and finance are not President Barack Obama’s strong suits.
“He didn’t run for the presidency to managing a financial crisis,” Nocera said, adding that the president had hoped to have an environmental and social agenda. But he said Obama is “ruthlessly pragmatic,” and that he is learning on the job by relying on experts.
Nocera did say that the kind of regulations that will come out of this recession likely will not be sufficient or appropriate. He said that what is needed is a thorough, non-partisan investigation on what went wrong and how best to fix it.
“What I fear is that without a true investigation of what went wrong and some deep thought about how to get it done,” this country will not properly address the root causes of what’s wrong with the economic system, he said.
Lastly, Nocera did reserve his harshest words for Congress: “If we get through this in one piece, it will be inspite of Congress, not because of it.”