National Opinions

Can Americans be confident in the future? 'No one knows what the hell is going on'

No matter which direction the markets gyrate, no matter what the politicians have to say, one thing has become abundantly clear this summer: Confidence, the very lubricant of both politics and finance, has collapsed.

It's not just a collapse of public confidence in national politicians; it would be nice if the problem was confined to the Beltway. No, instead, it spreads from Washington to Wall Street, where debt and equity markets are connected to European markets, central banks and policymakers — who are, in turn, connected to others around the globe.

And not one of them knows, truthfully, what to do. The dirty little secret of our era is that a globalized economic and political order is so vast, contains so many variables and moving parts, that nobody really knows how it works. So, here's the answer, in a nutshell: It doesn't. And every day it is destroying the lives of everyday people.

We've done some private polling and found shocking levels of pessimism: 95 percent of a group of Americans over 50, with conservative political views, were pessimistic or very pessimistic about the outlook for job creation and economic growth.

Nearly 90 percent said they expect to be personally hurt by turmoil in the markets. But it doesn't stop there, even with that demographic.

Fifty-nine percent of all Americans lack confidence in the U.S. financial system, the lowest level of confidence in the banking sector in three years, according Rasmussen Reports. One-in-three worry that their money will be wiped out in a bank failure. And a similar number thinks the U.S. unemployment rate will be even higher in a year. The Rasmussen Consumer Index, which measures consumer confidence daily, recently fell to a two-year low. And while investors fret about a double-dip recession, most Americans don't believe the recession ever even ended.

Politicians — particularly in the United States — have triggered this collapse of confidence. A majority of Americans oppose the debt ceiling deal, according to the latest poll by The Washington Post, and eight in 10 are dissatisfied with the way the political system works. Nearly half of all Americans literally view Congress as corrupt, according to Rasmussen, which adds, "That's the highest finding to date." The debt ceiling debacle and deal proved so melodramatic and ultimately so much smoke-and-mirrors that it is hard to take either major political party seriously anymore. The notion that the Congress would abdicate the constitutional power of the purse to a "super committee" is somewhere between laughable and pathetic. One's political preference in this country essentially comes down to choosing a lesser of two evils.

But bankers and business leaders are now following suit; it is likely no accident that being a member of Congress now ranks as the lowest of professions — but only just below being a Fortune 500 CEO or a banker. The wild gyrations of the markets only underscore this point: Markets are crashing down and shooting up on every single piece of data because of increased volatility.

Which is a polite way of saying: No one knows what the hell is going on. Except for hedge funds, of course, and big institutional investors who are making a killing. One hedge fund, in particular, has been shorting European government debt instruments — waiting for the central banks to pump in more money — and then buying long and sitting pretty. In other words, the shrewd bankers are playing the panicky politicians.

And everyday people? Everyday people are selling low, watching their 401(k)s evaporate, to big smart, institutional investors.

This is not bulls versus bears; it is sharks against fur seals. And neither the bankers nor the politicians want to address the core points: the demographic in the United States and Europe is aging and consuming less, piled high with debt, public and private. Increased efficiency through technology suppresses job creation. On the other side of the world, China and India are growing like weeds. And a band of instability predicated on bad or unstable regimes, fluctuating oil prices and soaring food prices stretches around the middle of the Earth. Look at the Arab world alone.

So, how can we expect a citizen or individual to have confidence in the globalized economic and political order? It isn't just people who have a modest asset who have reason to stop believing in the system. Even younger people who don't have assets struggle to find work and watch their parents' life choices fail. Why should they have confidence in a system that is, after all, collapsing?

Parker is editor and president of Parker Media, where Flume is editorial director.