Tom Foreman | BIO
Reporter's Note: Like Don McLean once sang, “bad news on the doorstep.”
Dear Mr. President,
My eyes nearly popped from my skull when I saw this new report from the Federal Reserve Bank about how the accumulated wealth of American families dropped by 23 percent from 2007 to 2009. Wow! Is it just me, or does that seem like a Six-Flags-Wacky-Roller-Coaster plunge into the abyss? I realize that our economy is in trouble, but even for a cynical, skeptical reporter that is a pretty whopping nosedive to comprehend.
Related on CNNMoney.com: Household wealth down 23% in 2 years, according to Fed
The funny thing is, for some time I have been saying to family and friends that appearances are deceiving, and that they shouldn’t necessarily be fooled just because neighbors still have nice cars and wear decent clothing. But I had no idea how right I was. (Which is a nice change from being, as my wife often reminds me, more wrong than I even imagine.)
What I suspected, and what turns out to be true according to this report, is that many people have been cannibalizing their savings, running up their debt, and essentially trying really hard to live as if the economy is not beating them senseless. They are putting on a good show while backstage the theater is on fire.
So probably you are wondering: What Tom, with your Nostradamus-like vision, do you think the future will hold? Well, if these numbers from the Fed are correct, I suppose what we will see is a further cracking of the façade. People can hold up appearances only so long under such circumstances.
As the money runs lower and lower, unless there is a significant turn around to push up their salaries and savings, and tame their debt, more people will start showing their distress. More foreclosures. More three-car families becoming two-car families. Less spending. All of which will further impede the speed of the recovery, which will continue the struggles for those families, and on and on the whirlpool spins.
I know this is depressing news. But trust me, it is a lot more depressing for the folks who are living it. And it is why my faith in this recovery remains uncertain. I don’t doubt that the economy is improving; I just fear the road back to better days will be much, much longer and rockier than you or anyone else in Washington is letting on. Anyway, despite all that I hope your Friday goes well and that your weekend is enjoyable. Give me a buzz if you have a moment. I’ll be downtown today if you want me to stop by.
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