July 17, 2008

Senator Phil Gramm, you’ve taken a lot of flack this week about the comments you made on July 9^th to the Washington Times.  You called us a nation of “whiners” who suffer from a non-existent “mental recession.”  Well, while you’ve got the mood right,  you’ve also got a case of hoof-in-mouth disease.

It’s not “whiners” – your word, not mine – that are the problem.  The problem is, despite a really good economy for most of the last twenty years, many people, all over the world, are scared and worried and they have a right to be.

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Long before the current housing debacle, financial institutions crises, stock markets slide into bear territory, soaring costs of oil and food…when, in fact, unemployment was below 5 percent and the GDP was growing at a healthy 3-4 percent, house prices were increasing and shares were rising…80 percent of the news stories about the economy were bleakly negative.

Headlines and lead stories were about massive layoffs and repetitive downsizing.  India, China and Russia replaced Japan as the economic enemy that would triumph over us and transform us into sheep to their slaughter. But the media only reinforced the Psychological Recession which was already the mind-set of about 50 percent of Americans as well as large populations overseas.

While the Psychological Recession is in the mind, it is also a real thing with very real consequences.  It is the long-term sense that things are lousy today and tomorrow will be even worse.  It is a very prolonged feeling that things are happening that are so huge that there’s no way you can gain control.  Your best efforts will no longer protect you from frightening events like losing your job, your house, your health insurance and your pension.

These depressed and anxious feelings are compounded by the feeling that you’re out there alone, and no one knows or cares that you’re hanging by the shred of a rope in a cold, hard wind.  There is no help:  not from manufacturing unions, or corporate executives, or political leaders.  There is no appropriate 21^st Century Safety Net for a borderless world.  This is potentially dangerous to the nation; it is conceivable that employee militancy could replace fear and our political boat could then be headed onto rocks.

The Psychological Recession, dear Phil, may only be in people’s minds but it matters.  Like all mind-sets it feeds on itself and grows ever bleaker and darker as people with this view seek out and remember all the awful stories of America on the defensive. Scared, depressed people do not work well; they are not committed to their organization and they are not engaged in their work because fear and self-preservation drive everything else out.

Everyone knows people who were downsized, laid off, replaced by part-timers on hourly pay with no benefits or by people who live far away and work for much less money.  While the economy as a whole has generally prospered over the last twenty years, individual industries, companies and employees have become much more vulnerable to economic disaster than was true before the growth of the global economy.

Human nature makes our moods traverse in very wide arcs:  a bubble becomes “a new economy” in which old rules are thrown out in a wave of euphoria that sweeps reason and facts before it.  But when the bubble breaks exactly the reverse occurs and dank depression and anxiety race to fill the void.

At the heart of many people’s Psychological Recession is the conviction that they, who were once considered valuable assets to their organization, are now viewed, instead, merely as costs to be cut.  When large groups of people feel economically and psychologically vulnerable and unprotected, chronically scared and worried, then the nation and their organizations suffer because those people don’t have the psychological or physical energy to be enthusiastic, to innovate and solve problems…to give a damn.

What is at risk, Phil, is “The American Dream.”  That’s the promise of better futures for us and our children that has welded this land of diverse immigrants into one nation; it’s the reason we’ve never had real class warfare.

In short, instead of complaining about “the whiners,” the leadership of our major institutions need to become aware of and need to address the issue of the widespread and debilitating Psychological Recession. 

We simply cannot afford to lose the bedrock of American optimism.