Obama must calm the nation's fears
The president seems not to understand the anxiety gripping businesses and their customers, a psychological condition that is crippling the economy.
By Jim Cramer, TheStreet
Is it fear of fear itself? Is that what is happening? Are we bumming ourselves out too much?
Last night, Mickey Drexler, the CEO of J. Crew (JCG), talked about how negativity among consumers has rather suddenly made them tougher customers, or deferred customers or not costumers at all. Crew encourages its staff to become involved in customer decision making -- or the lack of decision making -- to find out what is behind their motivation. And again and again, Drexler said that since July, people have been worried and nervous and not making decisions as they were.
What struck me was the language he used. It was almost exactly the language that John Chambers, the CEO of Cisco (CSCO), used to describe the newfound behavior of his customers. I found myself thinking as I listened to the Crew call that I was in an echo chamber of John Chambers!
It was psychological more than frugal; it was macro worries, not micro concerns. The economic environment. It matters.
One reason I have spent more time in these columns, on the show and, yes, on Twitter talking about the problems the White House is having with the economy is that the problems are more psychological than, well, logical. The mood of the country has soured, and it shouldn't be this bad. The president seems insulated to the problems, when he was supposed to be a man of the people. You would think that he worked at Goldman Sachs (GS) or something, the way he's hiding from the bad publicity. It is unbecoming. And it is damaging psychologically.
Many people want to blame Bernanke, and because he is in Jackson Hole, whooping it up with the other big bankers, central or otherwise, the glare is on him. But I think he has done everything he can to get it right. Folks who believe the president has done everything he can to make people feel more confident to hire and to buy are just plain wrong. The president and Congress seem not to know the fear. Maybe people who work for government don't know it?
Whatever. Drexler senses consumers' fear, and Chambers knows the corporate fear. Obama needs to call them in, just a couple of people, and spend a couple of days, not hours, figuring out how he can instill confidence in the private sector and its customers and what it would take to get people hired.
I know he has met Drexler already in a bigger round-table format. Hey, I know that Michelle Obama wears J. Crew! Now we just need them to work together to figure out how to turn the psychology around. Because the malaise is gripping everything from stocks to computer equipment to clothes.
At the time of publication, Cramer was long CSCO.
P.S. Click here to learn how to follow Cramer's trades for his Charitable Trust.
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