We must counteract a downward spiral of consumer confidence. What good is a bank rescue if consumers are too scared to borrow and banks too scared to lend? What good is rescuing a car company if consumers are too concerned about losing their jobs to buy cars?
New York, NY (PRWEB) February 20, 2009
Yesterday, the first day of trading after the unveiling of Obama's mortgage relief plan, it would appear the market continued to vote "no confidence", as it did for the Recovery Act and TARP 2.0. In a last-ditch effort, one man is lobbying to redirect the stimulus package to favor consumers.
"Ever since Obama called for a national day of service on January 19th, I kept wondering what we could do to speed the economic recovery, to prevent the need for more food kitchens, unemployment lines and shelters - chilling reminders of the great depression," explains Bert Holland, founder of Consumer Stimulus .org.
"I am calling on our leaders to redirect the stimulus package. We need to target the consumer to address their most immediate fears and with specific incentives to spend," adds Holland. "It is highly doubtful whether huge government spending programs, rescuing banks and car companies, preventing some of the foreclosures, or a $13 per week tax reduction is going to get the general public to start spending again."
It is the consumer who holds back from purchasing goods and services in bad times; it is the consumer whose spending must resume for good times to return.
Rescue the Consumer First
The US is a consumer economy, 70% of all business is consumer spending. Spending that is now slowing down. It is a vicious cycle which puts more and more businesses and people out of work.
"We must rescue the consumer first," writes Holland in his e-mail and letter-writing campaign. "We must counteract a downward spiral of consumer confidence. What good is a bank rescue if consumers are too scared to borrow and banks too scared to lend? What good is rescuing a car company if consumers are too concerned about losing their jobs to buy cars?"
Run Government like an Enlightened Business
"It is the psychology of the buying public which determines what happens in the world today. If we want to avert an economic catastrophe and build a better, more sustainable world for our children, we must run government like an enlightened business serving the customer," observes Holland.
Holland exhorts lawmakers and the administration to apply the modern tools of customer-focused business to this new challenge. "We need to implement specific ideas which motivate and support the consumer, which have specific measurable goals and timetables. This is more effective and cheaper than the broad government spending programs in the current stimulus package."
Holland founded ConsumerStimulus.org to advocate consumer-oriented stimulus actions with measurable goals, i.e. to boost consumer spending, consumer confidence, re-energize home improvement, increase consumer and small-business lending, retain jobs, transform existing businesses, create new small businesses etc.
What You can Do for your Country
Holland encourages others to join the effort, suggesting people submit ideas to redirect the stimulus package to Share Ideas - Consumer Stimulus and write to their representatives.
"Better late than never," Holland adds. "At this point the money is approved and allocated, but not spent. There is still time to redirect the stimulus package. Your children will thank you."
Jump-start the Consumer, and you Jump-start the Economy
According to the website, consumers will spend again:
1. If consumers are not worried sick about losing their jobs. Example: Hyundai's "you owe nothing" financing guarantee if the customer loses his source of income. If a private company can insure that, why can't the government?
2. If consumers feel they will get a discount, a rebate, a limited-time offer or a tax credit for specific spending. Example: Germany's high-tech "green" building industry is the result of generous tax incentives for energy saving for homes and businesses. If the Germans can do it, why can't we?
Banks will lend again:
1. If banks don't have to worry so much whether the consumer can pay. Example: Most new mortgages are now government-insured FHA loans. If it has worked for 74 years for houses, why not for major appliances, home energy saving and automobiles - at least long enough to get things moving again?
2. If banks have to commit to lending quotas in order to receive government rescue funds and loan guaranties. Example: Car companies have to meet quotas for emissions. If we can set quotas for cars, why not loan quotas for banks receiving TARP funds?
Consumers confidence will rebound:
1. If consumers observe that government, industry and finance are working together to build business competitiveness and prevent job loss. Example: In Japan, industrial advisory boards helped turn a disastrous recession into an economic powerhouse over the last several years. If Japan can do it, why can't we?
2. If consumers are incentivized to start small businesses with insurance, tax and sustainability policies. Example: A new program in France eliminates taxes for business start-ups. If France can do it, why can't we?
For more ideas see Ideas - Consumer Stimulus .org.
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