HOW HE SEES IT We need straight talk from our leaders

By ERIC PLANEY
SPECIAL TO THE VINDICATOR
Disconnection. That's the word that comes to mind when I think of many of our political leaders and their communication skills with the American people. These days, Congress seems to be in the news about everything except creating laws that actually impact the quality of life for Americans. The latest news concerns whether Republican House leader Tom DeLay was caught smoking a Cuban cigar. Fidel must be proud. This news follows headline after headline about the debate over new rules to be implemented regarding the ethics of our congressmen. Don't get me wrong, I'm all about ensuring that our political leaders follow a high ethical standard. But when did the need arise for such strict standards? When did the period occur that our leaders stopped focusing on telling the American people their opinion on where their country is heading?
Lately I have been reading and hearing good material from sincere economists and experts stating that the U.S. economy and our society needs some serious structural reforms. Our leaders should just explain the realities of our world, but should also to give us the needed advice on how we can do our part -- as FDR did in his fireside chats. Here are some of the things they might say:
ULets get out of debt.
The U.S. is one of the lowest saving nations in the industrialized world. Since the late 1950s, when this country was still riding on our post-World War II euphoria, we evolved into insatiable consumers. No longer did we purchase an item after saving for it, we flipped out the MasterCard and made so many "priceless" purchases. Now, as Fortune Magazine tells us, the average U.S. household has $9,200 in credit card debt (not to mention the car payments). The more debt we take on, the more we rely on foreign governments to finance it. Paying off our debts and saving more makes the balance sheet of the United States and its citizens stronger.
UDon't buy more than we can afford.
This applies in two major purchases: cars and homes. Low interest rates in the last five years meant people can buy more house with a relatively lower house payment. Because of that phenomena, 45 percent of U.S. homeowners are in variable rate mortgages. When rates will go up, and they will, those rate adjustments are going to hurt a lot of people. The current 20- and 30-year fixed rate mortgages are still low compared to historic norms. Locking in these rates now may increase your payments slightly, but it can still be better than the alternative in five years. Further, a rule of thumb for financing a car is that if you can't pay it off in five years, its probably too expensive for you. Paying off a car, and not having a payment for two or three years, means that you most likely can afford a bigger and better one next time around.
UThink twice about shopping at Wal-Mart.
On a recent episode of the informative PBS show "Frontline," a critic of Wal-Mart said it best: "Wal-Mart and China are a joint venture." Sam Walton envisioned a company that benefited the consumer by creating cost efficiencies when buying in mass quantity. I bet he never intended to create a retail juggernaut that forces its suppliers to lower its costs so much that its only alternative is to move to low-cost countries like China. Ask the executives of Rubbermaid, which had several factories in small towns in Ohio close because they couldn't squeeze any more costs to keep up with Wal-Mart's demands. Racking up credit card debt to buy home electronics, then making up for it by saving a few pennies on socks bought at Wal-Mart is doing this country a disservice. I am a believer in globalization. There certainly are benefits. But I do not believe one company should have had so much influence over job security in this country by dumbing-down America's buying power.
UParticipate in the debate over Social Security and health care reform.
Washington and Wall Street veteran Pete Peterson, in a recent speech, noted that true unfunded obligations of our government in these areas is approaching $70 trillion. Entitlement costs are getting more expensive for everybody these days. It does not help that these are issues so politically sensitive that politicians are not telling people how precarious the situation is. This is an area that everybody, including myself, should be researching this issue. When the baby boomer generation reaches retirement age, I am sure they will have a more enjoyable retirement playing with their grandkids, not giving them a bill for it.
I admired the way President Bush calmed and reassured the American people after 9/11. But I thought he missed a golden opportunity to lead the country by not encouraging saving and restraint as a matter of duty -- as FDR did in the 1940s. Small adjustments in our lifestyles now will allow us to smoke a cigar in celebration someday.
X Eric Planey, a Youngstown native, is assistant vice president, leveraged finance, in the Transaction Business Group of the Bank of Tokyo-Mitsubishi in New York City. The opinions he expresses are his, not necessarily those of the bank.