Thursday, Oct. 17, 2002 | 8:10 a.m.
THE RIPPLE EFFECT can cripple us where it hurts the most.
Now that President George W. Bush has signed the Joint Resolution of Congress authorizing a war with Iraq, he can turn his attention to the United Nations where he has made his intentions known. That is, either the United Nations steps up to the table and produces a resolution that leads to the disarming of Saddam Hussein or the United States will do the job itself.
That's a pretty simple task in a very complicated world, which means that the end result may not resemble what the president has in mind. To say that the situation is fluid is an understatement, so we will all have to wait to see what is in store for us.
Meanwhile, back on the home front, there are significant dangers lurking about which do have consequences that are much easier to discern. And they all have something to do with the economy.
This sniper thing back East has so many people on edge that, for a respite from the daily doses of tragedy, some of us have returned to CNBC and the dire economic news that depresses Americans on an hourly basis. Next to bombings in Bali and ship attacks in the Persian Gulf, a little more bad economic news seems tame by comparison.
At least that's what I would like to think because on the one hand it is only our economic lives at stake. But, looked at from another point of view, it is a matter of real life and death. A far more immediate threat to our well-being.
Like it or not, it is still the economy that determines so much about the way we conduct our lives and set our national and international priorities. Just like in our personal lives, if we are financially strong there is very little we cannot and will not do to better the circumstances of those around us. When the economic noose tightens around our own throats, we are less inclined to reach out to others. And it is the American desire to reach out to others that determines, to a great extent, the quality of life for millions around the world.
But let's not talk about other countries today. Let's talk about our own and the difficulties that lie ahead if we cannot find a way to fix our sputtering economy and, with it, the lives and fortunes of millions of ordinary people.
We know from recent news reports that tens of millions of Americans have seen their IRAs disappear, their 401(k)s whither away and their other retirement nest eggs get crushed under the weight of an economic slowdown and a Wall Street meltdown that promises no timely end to the financial carnage. Trillions of dollars of value have been sucked out of our economy, and with that money goes the hopes and dreams of so many people that to consider the enormity of the problem is to live on the edge of a very depressive state. Now that President Bush has what he wants on the war front, perhaps we will see some decisive action here at home before matters get well beyond repair.
To find an example of the crippling nature of the ripple effect, we need look no further than our extensive world of philanthropy and the charities that benefit from the giving hearts of America.
News accounts have recorded millions and billions of dollars of charitable contributions pledged by some of the wealthiest members of society. The gifts are staggering, both in their numbers and the significant amount of help they will provide to the community-enhancing endeavors the recipient charities perform.
Once made, these pledges have been a virtual certainty, which means that the charities can act as if they have already received the funds. That's because not only do those who have made the pledges have the money to make good but they also have had the ethical bearing that demanded of them that they keep their words.
Today's economy has affected those people -- large and small -- in two very significant ways. First, the money they thought would be there to give away has disappeared as our deficits have returned and the markets have headed south. And, secondly, the character trait that demanded fulfillment of a pledge regardless of the circumstances seems to have been discarded in direct proportion to the down days of the Dow.
If our charities cannot perform their good works in our communities -- which they will not be able to if people either don't support them or refuse to make good on their sunnier day pledges -- then the job will fall to government. And we all know what that means. Governments at all levels in this country are desperate for dollars and they cannot get them. That means that discretionary spending, like the kind that fulfills community needs that charities impact, will not be approved. And that means that the fabric of our communities will deteriorate further, sometimes beyond repair. And let's not even mention the psychological and societal impact of people not living up to their promises.
This is just one -- albeit a very important one -- of the downsides to an economy sliding out of control. There are many other aspects, many of them far worse, that will result if we don't get our fiscal house in order.
President Bush needs to get a grip on what ails our financial lives and he needs to do it now. The good news is that with the country firmly united on Iraq, he now has the time to focus on that effort. Our financial security and, hence, our security as the world's economic superpower, depends on how well he does that job.
Whoever said it the first time was right. It is still the economy.
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