Time to Get Creative

The Fed lowered their benchmark interest rate today to basically nothing which kicked off an immediate jump on Wall Street. If nothing else, this recession has caused lots of ordinary people like me to pay more attention to how the overall economy works. It's like a big wheel where every spoke feeds into the next spoke all the way around. Granted the banks and mortgage companies shot themselves in their collective feet by giving large mortgages to mostly well-meaning people that had no chance of paying them. Should the consumers have known better? Probably. But I remember when I bought my first house. I had stars in my eyes and thought that it was the most wonderful thing I could ever imagine which is what most of these people also thought I'm sure. The mortgage brokers fed into this and probably assured them that the $400,000 house they were buying today would easily be worth $800,000 in a couple of months. But to get back to my main point, consumers drive this economy. We buy cars, food, clothing, furniture, toys and we take vacations. However right now we're not buying much of anything because we either have already lost our jobs or are worried that we will lose our jobs. That's because if nobody buys anything then they don't need to make those products. So then the factories tell us they'll have to lay off thousands of people because nobody is buying their products or visiting their resort and restaurants. Is this the chicken and the egg or what? There are things that I personally would buy both for myself and others but I won't because I hear every day that it's going to get much worse. That's because the companies ran themselves into the ground with bad debt related to the mortgage stuff and other very creative "financial instruments" which is a term them all love. This had nothing to do with you or me. So now the Fed has lowered rates. They've given tons of money to banks that I thought were for loans to consumers. Maybe some of it has actually found its way to the consumers but I'm not seeing any mention of it. Maybe it was meant for businesses to help them get through this current situation and keep people employed, but every night it's a few thousand layoffs at this company, a few thousand layoffs at that company which puts more people out of work and more people worried about being out of work and fewer people spending any money. Maybe it's time to try something different. The modern version of the WPA will probably help to some degree and I hope the new administration has more ideas that hopefully won't take 15 months to put into motion. What's the answer? At this point I don't know. But I do know this: repeating the same action over and over hoping for a different result doesn't get it done. Anybody have any ideas? We can't afford not to listen.