Amidst all the panic and uncertainty on trading floors from Tokyo to London this week came the reassuring news that the American consumer is still king in the world market.
As concerns heightened about a 2008 recession here, one school of thought held that the dampening effect of such a development would be more than offset on foreign exchanges by the continued robust growth in places like China and India. Wrong!
As one economist noted yesterday, when the U.S. sneezes, the world still catches a cold. And the mere thought of Americans cutting back on their purchases due to worry about their jobs, the value of their homes and the cost of gasoline was enough to send those foreign stock markets into a two-day tailspin.
Of course, confirmation that they are still held in high esteem by investors overseas comes as cold comfort to the average American. The wobbly stock market has many worrying about the value of their retirement portfolios; and heaven help those who were figuring on the sale of their home to help finance a more relaxed lifestyle in a warmer climate. Meanwhile, families struggle to pay for the basics - food, shelter, medical care - without breaking the bank.
Yesterday the White House, Congress and the Federal Reserve Bank moved quickly to try to restore consumer and investor confidence.
The Fed reduced a key interest rate by three-quarters of a percentage point before the New York Stock Exchange opened for business yesterday morning. And within hours Treasury Secretary Henry Paulson was promising action "long before winter turns to spring."
President Bush and the Democratic leadership in Congress should by all means move quickly to devise a plan to get the economy moving in the right direction again. But the emphasis should be on encouraging investment and job creation over the long term rather than throwing everyone a few hundred dollars so they can run out and buy another big-screen TV.
Indeed, the crisis we face today is in large measure the result of whimsical spending practices and high tolerance for debt on the part of both government and the American consumer. Those habits have got to change lest the day comes that the U.S. economy tanks and nobody notices.
As concerns heightened about a 2008 recession here, one school of thought held that the dampening effect of such a development would be more than offset on foreign exchanges by the continued robust growth in places like China and India. Wrong!
As one economist noted yesterday, when the U.S. sneezes, the world still catches a cold. And the mere thought of Americans cutting back on their purchases due to worry about their jobs, the value of their homes and the cost of gasoline was enough to send those foreign stock markets into a two-day tailspin.
Of course, confirmation that they are still held in high esteem by investors overseas comes as cold comfort to the average American. The wobbly stock market has many worrying about the value of their retirement portfolios; and heaven help those who were figuring on the sale of their home to help finance a more relaxed lifestyle in a warmer climate. Meanwhile, families struggle to pay for the basics - food, shelter, medical care - without breaking the bank.
Yesterday the White House, Congress and the Federal Reserve Bank moved quickly to try to restore consumer and investor confidence.
The Fed reduced a key interest rate by three-quarters of a percentage point before the New York Stock Exchange opened for business yesterday morning. And within hours Treasury Secretary Henry Paulson was promising action "long before winter turns to spring."
President Bush and the Democratic leadership in Congress should by all means move quickly to devise a plan to get the economy moving in the right direction again. But the emphasis should be on encouraging investment and job creation over the long term rather than throwing everyone a few hundred dollars so they can run out and buy another big-screen TV.
Indeed, the crisis we face today is in large measure the result of whimsical spending practices and high tolerance for debt on the part of both government and the American consumer. Those habits have got to change lest the day comes that the U.S. economy tanks and nobody notices.
