Americans have always been an outstanding example of an energetic and optimistic people. The vastness of the American landscape and the attraction of being able to make it big with a lot of hard work and a little luck attracted the restless and disenfranchised from around the world. Despite imperfections America was, and remains, an energetic mix of one ethnic group after another in pursuit of their own personalised American dream.
That restless spirit imported to and bred in America likes and expects fast results, not only from their own efforts but from their politicians and government. Long term solutions to problems of any sort are not favoured in America. Americas want, even demand, that problems, no matter how complex, be fixed fast. Like right now.
As evidence of the American fixation on fast results just look at the Obama government’s effort to fix the economy. An economic system that has imploded due to the use of excessive debt and financial leverage by the public as well as the private sector, is being primed for a quick fix by adding even more debt and leverage. Probably some short term improvement will occur in some areas at the expense of greater than necessary pain - read disaster - in the future. Looks like it will be a classic Long Crisis .
Most mainstream economists are still predicting a V-shape recovery, others a U-shape recovery. The prospect of a long crisis and an L-shaped depression, similar to the path experienced by Japan, is a minority view. It is a view that few Americans can accept and certainly prepare for. After all, isn’t the US government on the case? Are they not spending trillions and trillions of dollars to “save” our economy and the American way of wasteful life?
Indeed they are, and that is adding to the breakdown of the world’s financial system. A financial system, of course, built on the premise that debt is money, does not function well when the debt burden becomes so large that it can no longer be repaid. The typical American is hopeful that any crisis will be short lived, but they are not stupid. They realise that they have reached the point where savings and paying down debt is a far wiser course than continuing to spend money they don’t have.
The deflationary forces of the depression aka Long Crisis that we are in now, however, are so great that for many Americans the reduction in wealth caused by tanking real estate values, a stock market that even with a fantastic March rally is still 40% plus off its high, and an end to easy credit, is leading to record bankruptcy rates.
Most Americans are still not willing to believe that the crisis could and probably will go on for many years. Their natural optimism leads them to believe that by the end of this year, certainly in early 2010, happy motoring days will be here again.
Even those who believe that we have to rebuild our financial system from the ground up and that the process will take many years before the economy will fully recover, cannot imagine an America where living standards are reduced by up to 50%. Americans are not prepared to work through a long crisis even when it is becoming increasingly obvious that unfortunately is what we are faced with, and that the cheap energy days upon which American wealth was built are forever gone.
The collapse of the commercial real estate market and the closing of large regional malls will be a horrible shock to Americans. The spread of shanty towns across the nation and the sad plight of former middle class people who are now homeless will be poison to the American mindset. The frustration and anger that will follow will be a danger to every politician at the local, state, and federal level.
The long crisis will bring many changes within America that we are absolutely not prepared for. In the event of the almost certain Long Crisis that we are headed for, there are going to be many upheavals and in general, the average person will be worse off.