The BittersweetAmerican Year 2008
Americans are finishing the 2008 filled with a blend of as many worries as hopes.
When I asked a few of my American neighbors what 2008 was like for the United States, they answered:
Historical, because of Obama's selection as the next U.S. president; hard, because of the rapidly growing crisis; and crazy, because at first everyone was afraid of the top-level petrol prices and now, although they are exceptionally low, not many people are buoyant. At last someone suggested: bittersweet! This year has been bittersweet, strange and uncertain. Everyone agreed.
"Crisis" and "Obama" were the most popular words of 2008. One year ago nobody in America expected that the economic crisis would be so deep. Everyone said that the recession was coming, but they were optimistic. Americans have survived many recessions before. The plague of bad mortgage loans was worrying, but the optimistic news that those loans given on insane conditions comprised only 12 percent of all mortgage loans, was heard from every side. People were told that only the fools who took out such loans despite not being able to afford them and the greedy banks who were offering such services would be punished for their mistakes.
Everything turned out to be a lie. The recession is already deep (estimated 6-8 percent in the 4th quarter) and it is unknown how long it is going to last. The unemployment rate is 50 percent higher than 2007. The mortgage crisis has affected the whole financial system. All Americans have learnt the lesson.
Shock is not apocalypse
But those who say that the current crisis is a repeat of the Great Depression are talking rubbish. They have not even read one book about America of those days. Thousands of beggars on every street, picking berries and mushrooms in the countryside as the staple source of food, children attending classes every second day in the winter time, because they had to share their clothes with siblings.
The current crisis is surely painful, but America is approaching it from a totally different level. Although in Denver and Phoenix I saw streets where every third house was for sale because of the owners' mortgage problems, the majority of America resembles where I live. Only one elderly couple near me is moving out, apparently because their house was too big for them and the crisis has only accelerated the decision about moving to a smaller and less expensive house.
The American media are currently delighting in the information that the retail trade throughout the pre-Christmas period had fallen by 5-8 percent. But first: leaving out cars and petrol, it had fallen by 2-4 percent and on-line trade had probably not decreased at all. Second, even if this data is correct, what does it really mean?
A theoretical John Smith purchased 18-19 presents for his wife and children this year instead of 20 in 2007.
These numbers are not taken from nowhere. When we called our American friends on Christmas Day at 1 p.m., they were still unpacking and trying on dozens of presents (in the U.S. the presents are given on Dec. 25, not as in Poland, on Dec. 24). American houses are known for having closets cluttered with objects used once in two years and cellars with junk not used at all. Maybe, because of the crisis, this is going to be reduced.
I would not like to trivialize this crisis. The fact that in a year's time there could be 10 percent of unemployed people here, more than twice the rate in 2007, is a shock for this country. But it is only a shock, not apocalypse.
There are millions of Americans who move from houses to rented flats or to their parents' house because of bad mortgage loans. But there are also millions of young couples wondering if they should buy a house now or wait for a sharper price decline. And millions, just like my neighbors, for whom the most crucial question is: should I buy shares when Dow Jones is at 8,000-8,500 or wait until it drops to 7,500?
The European media's reports on America's irreversible downfall are understandable. Deriding America is our continental sport and in the passing year there were many more reasons for this. But why are the comparisons to the Great Depression so popular in American newspapers and on TV?
Eric Weiner, the author of the book “Geography of Bliss”, wrote a few days ago that not only the media's pessimism should be blamed ('good news is no news'). The blame is carried by human nature. Research is showing that we are far less happy if we win $100 in the lottery than we are worried if we lose $100. Especially if someone steals it from us. During the crisis, many feel this way. That we were deceived by the rich and mighty, Weiner writes.
The biggest faith in Obama
There are many Americans who feel that Bush's administration has deceived them: the first time by insufficient control of the financial institutions and the second time, when the chaotic and panic-stricken $700 billion bailout was offered.
Feeling betrayed, disappointed and even bored with Bush is common and in stark contrast to the expectations for the new president.
Obama's election is still probably the most important event of the year in the U.S. Two years ago the majority of Americans did not know who Obama was. One year ago he was still overshadowed by Hillary Clinton. Nowadays he is not only the president-elect, but also Americans' and the whole world's greatest hope.
Obama is a symbol. He attracts his compatriots' optimism and faith that the incompetent rule in America never lasts long, as my neighbor Phil said.
Three-quarters of Americans are proud that they have chosen the first non-white president. But not only because of his race. In many areas Obama is still mysterious, his decisions in the key economic and international issues not yet revealed. But Americans like his cool.
They also like that word "package" and the amount in checks: at least $700 billion, are the only things similar to Bush's proposals. Bush has spent the money on rescuing banks. Billions were allocated for an unknown purpose. Obama intends to earmark at least three-quarters of his package for investments in roads, Internet and health care. Although the package is controversial, two-thirds of Americans support it. Just like the two-thirds claiming that Bush's package was catastrophic.
It is similar when it comes to the foreign policy. Just before the elections one of Obama's advisors was explaining to me:
-We are aware that we must not repeat the Bush mistake: hubris. We know that we are going to receive people's trust, something that the Bush's administration dramatically lacked, even when they had good ideas. But we do not know what kind of challenges we are going to face, what our priority would be and what kind of tools we are going to be vested with.
Now Obama's team knows much more. And although the challenges are massive and they do not reveal how to face them, the confidence in USA's foreign policy has been growing for the last months. Partially because, quite simply, Obama is not Bush. Partially because he has announced centrists and 'high-caliber' politicians the key members of his team:
Hillary Clinton - the Secretary of State, General James Jones - the National Security Adviser, and he kept Robert Gates as the Secretary of Defense.
Robert Samuelson, Washington Post's skilled economic journalist, claimed:
"We know that 2008, much like 1932 or 1980, marks a dividing line for the American economy and society. But what lies on the other side is hazy at best. The great lesson of the past year is how little we understand and can control the economy.
"Much depends on whether the frantic policies to combat the recession succeed. Probably they will, but there are no guarantees. Our ignorance is humbling."
Nevertheless, to paraphrase Mark Twain, the rumors of America’s death are greatly exaggerated.
To quote my neighbor Phil:
There are still millions of people, both Mexican workers and scientists from Asia and Europe, who are trying hard to come and work in the U.S. In case of any crisis in the world, everyone is turning for help to Washington. As long as it does not change, I will not believe in the U.S.'s downfall.
When I asked a few of my American neighbors what 2008 was like for the United States, they answered:
Historical, because of Obama's selection as the next U.S. president; hard, because of the rapidly growing crisis; and crazy, because at first everyone was afraid of the top-level petrol prices and now, although they are exceptionally low, not many people are buoyant. At last someone suggested: bittersweet! This year has been bittersweet, strange and uncertain. Everyone agreed.
"Crisis" and "Obama" were the most popular words of 2008. One year ago nobody in America expected that the economic crisis would be so deep. Everyone said that the recession was coming, but they were optimistic. Americans have survived many recessions before. The plague of bad mortgage loans was worrying, but the optimistic news that those loans given on insane conditions comprised only 12 percent of all mortgage loans, was heard from every side. People were told that only the fools who took out such loans despite not being able to afford them and the greedy banks who were offering such services would be punished for their mistakes.
Everything turned out to be a lie. The recession is already deep (estimated 6-8 percent in the 4th quarter) and it is unknown how long it is going to last. The unemployment rate is 50 percent higher than 2007. The mortgage crisis has affected the whole financial system. All Americans have learnt the lesson.
Shock is not apocalypse
But those who say that the current crisis is a repeat of the Great Depression are talking rubbish. They have not even read one book about America of those days. Thousands of beggars on every street, picking berries and mushrooms in the countryside as the staple source of food, children attending classes every second day in the winter time, because they had to share their clothes with siblings.
The current crisis is surely painful, but America is approaching it from a totally different level. Although in Denver and Phoenix I saw streets where every third house was for sale because of the owners' mortgage problems, the majority of America resembles where I live. Only one elderly couple near me is moving out, apparently because their house was too big for them and the crisis has only accelerated the decision about moving to a smaller and less expensive house.
The American media are currently delighting in the information that the retail trade throughout the pre-Christmas period had fallen by 5-8 percent. But first: leaving out cars and petrol, it had fallen by 2-4 percent and on-line trade had probably not decreased at all. Second, even if this data is correct, what does it really mean?
A theoretical John Smith purchased 18-19 presents for his wife and children this year instead of 20 in 2007.
These numbers are not taken from nowhere. When we called our American friends on Christmas Day at 1 p.m., they were still unpacking and trying on dozens of presents (in the U.S. the presents are given on Dec. 25, not as in Poland, on Dec. 24). American houses are known for having closets cluttered with objects used once in two years and cellars with junk not used at all. Maybe, because of the crisis, this is going to be reduced.
I would not like to trivialize this crisis. The fact that in a year's time there could be 10 percent of unemployed people here, more than twice the rate in 2007, is a shock for this country. But it is only a shock, not apocalypse.
There are millions of Americans who move from houses to rented flats or to their parents' house because of bad mortgage loans. But there are also millions of young couples wondering if they should buy a house now or wait for a sharper price decline. And millions, just like my neighbors, for whom the most crucial question is: should I buy shares when Dow Jones is at 8,000-8,500 or wait until it drops to 7,500?
The European media's reports on America's irreversible downfall are understandable. Deriding America is our continental sport and in the passing year there were many more reasons for this. But why are the comparisons to the Great Depression so popular in American newspapers and on TV?
Eric Weiner, the author of the book “Geography of Bliss”, wrote a few days ago that not only the media's pessimism should be blamed ('good news is no news'). The blame is carried by human nature. Research is showing that we are far less happy if we win $100 in the lottery than we are worried if we lose $100. Especially if someone steals it from us. During the crisis, many feel this way. That we were deceived by the rich and mighty, Weiner writes.
The biggest faith in Obama
There are many Americans who feel that Bush's administration has deceived them: the first time by insufficient control of the financial institutions and the second time, when the chaotic and panic-stricken $700 billion bailout was offered.
Feeling betrayed, disappointed and even bored with Bush is common and in stark contrast to the expectations for the new president.
Obama's election is still probably the most important event of the year in the U.S. Two years ago the majority of Americans did not know who Obama was. One year ago he was still overshadowed by Hillary Clinton. Nowadays he is not only the president-elect, but also Americans' and the whole world's greatest hope.
Obama is a symbol. He attracts his compatriots' optimism and faith that the incompetent rule in America never lasts long, as my neighbor Phil said.
Three-quarters of Americans are proud that they have chosen the first non-white president. But not only because of his race. In many areas Obama is still mysterious, his decisions in the key economic and international issues not yet revealed. But Americans like his cool.
They also like that word "package" and the amount in checks: at least $700 billion, are the only things similar to Bush's proposals. Bush has spent the money on rescuing banks. Billions were allocated for an unknown purpose. Obama intends to earmark at least three-quarters of his package for investments in roads, Internet and health care. Although the package is controversial, two-thirds of Americans support it. Just like the two-thirds claiming that Bush's package was catastrophic.
It is similar when it comes to the foreign policy. Just before the elections one of Obama's advisors was explaining to me:
-We are aware that we must not repeat the Bush mistake: hubris. We know that we are going to receive people's trust, something that the Bush's administration dramatically lacked, even when they had good ideas. But we do not know what kind of challenges we are going to face, what our priority would be and what kind of tools we are going to be vested with.
Now Obama's team knows much more. And although the challenges are massive and they do not reveal how to face them, the confidence in USA's foreign policy has been growing for the last months. Partially because, quite simply, Obama is not Bush. Partially because he has announced centrists and 'high-caliber' politicians the key members of his team:
Hillary Clinton - the Secretary of State, General James Jones - the National Security Adviser, and he kept Robert Gates as the Secretary of Defense.
Robert Samuelson, Washington Post's skilled economic journalist, claimed:
"We know that 2008, much like 1932 or 1980, marks a dividing line for the American economy and society. But what lies on the other side is hazy at best. The great lesson of the past year is how little we understand and can control the economy.
"Much depends on whether the frantic policies to combat the recession succeed. Probably they will, but there are no guarantees. Our ignorance is humbling."
Nevertheless, to paraphrase Mark Twain, the rumors of America’s death are greatly exaggerated.
To quote my neighbor Phil:
There are still millions of people, both Mexican workers and scientists from Asia and Europe, who are trying hard to come and work in the U.S. In case of any crisis in the world, everyone is turning for help to Washington. As long as it does not change, I will not believe in the U.S.'s downfall.
interesting article.
as an american I see things somewhat different.
this is the chickens coming home to roost.
reagan econmics and wars for profits have cost the americans dearly.
now it will be of interest to see how americans respond.
so far the response has been more of the same.
as far as millions wanting to move here most are from third world countries.
very bias report.
this is a decline of wealth of a nation being sold as a recession.
america is in denial right now and few understand what their mega military industrial complex really costs them.
and many still hang on to reagan economics as a godsend in spite of the damage it has done to america. this is classic paradigm paralysis in action.