We Believe in America

As the stock market heads for an eventual major crash, which I predicted for the past year or more, we can still be comforted in an American Dream that still exists.

Don't get me wrong. The inevitable is coming to fruition. The protesters have finally turned out to say the banking system and Wall Street not only own the government but serve as the major reason why the Federal government could not fix the Financial Crisis of 2008. Despite Ben Bernanke's efforts to throw printed money at the problem, greed kept the economy down--as expected. Basel Three forces banks to hold more capital. Credit remains tight for the people who need it most and the ones who don't need it, don't want it.

The stagnant economy should last for as long as banks dream that home valuations--and commercial real estate values--will rise to the loan levels of that 2006 fantasyland. Because the banks did not learn from their mistakes and made them over and over (the definition of insanity), we wait and watch for a devastating stock market crash that could happen as soon as tomorrow and likely before the end of the year.

All that said, we can take heed in Franklin Delano Roosevelt's illustrious line, "We have nothing to fear but fear itself." Because we're the kids in America. Now, if we were the kids in Europe--or Greece--that's another story. But we're the kids in America and the Who knew what they were singing when they said that "The Kids Are Alright." America will, indeed, persevere. Here's why.

There is always an American Dream, an individual's opportunity to better oneself simply by living in this country. When the crash happens, people will wake up and realize that money itself has never been the answer to happiness. A new house is not happiness. A new car is not happiness. The real key to happiness is in our health and relationships with others.

Once we realize that without health, we have nothing, and without others, we have nothing. I have one great friend in my life--and a few other good friends, but that's better than no friends and it sustains me. They have been there for me through my addictions just like the United States taxpayers have been there for Wall Street's gambling addiction.

I'll get to how we solve unemployment in a moment, but let's not fool ourselves. Unemployment at 9.1 percent or higher is here to stay. The part-timers who want to be full time are at over 16 percent and here to stay for probably the rest of the decade.

But, if we understand these primary foundations of health and relationships, we can build from there. A house can be part of the American Dream--it is AN American Dream but not THE American Dream. Still, homeownership preservation is necessary to rebuild the economy. If homeowners can by any means stay in their homes and pay their mortgages, then banks should make every effort reasonable to keep those borrowers in their homes. If they cannot pay the mortgage, then buyers can become renters until they become buyers again. If they do not rent their home, then they are destined for apartment living. But, before real buyers and homeowners come out of the woodwork, they need to trust the system. Until then, investors will buy up the houses at foreclosure auctions and the United States will remain stagnant.

The mortgage industry--the housing market--must regain consumer trust through education. Financial literacy is a secondary school lesson waiting to be taught. Only through education and counseling can the housing market regenerate itself into a viable economic idea for the future.

Everyone needs a car at one point in time or another, so the auto market is not going away. That said, everyone needs food and gas, but look at how those commodities have risen? And don't tell me about gas prices falling. Every yutz with ears knows gas prices are still too high.

Clothes, food, gas have not fallen in the long term--they've been flat at best and rising. So, consumers are saving their money for the basics to feed and clothe their children. They try to keep a roof over their heads. Those are the basic building blocks for middle-class families today.

The dwindling middle class either lives in fear of losing their home, their job or all of the above. The jobs overseas are not coming back. The future jobs are not here because CEOs hesitate to hire in a land of uncertainty. But years of uncertainty translate to a double-dip recession and if we are not in one now...well, we are in one now.

While Wall Street plays the house and traders roll the dice, so many families are struggling to make ends meet. While Bernanke's Fed prints Monopoly money for banks to stay in business, college students leave school thousands of dollars in debt. That's why Wall Street investment bankers look down from their office suites to see a re-creation of 1970s protestors--topless women and all.

To me, however, this country is becoming much less divisive. We are realizing at this point that it is time to figure out the bad banks from the good banks and divide out the bad loans from the good loans. The accounting illusion must fade into a new, normal reality. Some banks are going to fail, not for the sake of capitalism but for the sake of America's soul.

At worst, another bank acquires them. At best, private equity acquires the banks at cost if necessary. But public equity has already bailed out enough financial institutions. When the crash eventually happens, this economic maneuver will be the beginning of a new reconstruction period for America. Only with free-flowing credit can we enter into a true green economy with new production and more jobs for all types of workers.

And, when that day comes when America prospers once again--probably about 10 years down the road--we will need to heavily tax the companies that buy cheap labor overseas. At worst, they will need to find cheap labor right here in the U.S., for the struggling unemployed willing to work their way up once again. Because, by that time, the basics will become the perks in society.

At that point, when we fully trade in materialism and ill-gotten gains for a good day's work, well-earned pay and the simple pleasures in living life, can all of us say, "We believe in America."

Robert Michaels