Davos and Trust
One of the themes of this year’s World Economic Forum in Davos was “Trust”. The participants felt they needed to build up the people’s trust in business, in the stock market, in banks and in the economy generally so investors and consumers would return to buying.
I think that ship has sailed.
It took the stock market 25 years to return to the levels seen before the 1929 crash. Twenty five years. That’s a lot. That’s … a generation. So a whole new generation had to grow up, a generation that didn’t remember losing their money in ‘29 and in the depression, a generation willing to trust the economic system, a generation that hadn’t been burned. As for consumers, my grandparents never got that trust back. After the depression they never returned to the kind of spending they did before the depression years.
Now people who have lost half their savings in 401Ks or stock market funds have learned never to put their money in the stock market again. The rich have learned not to put their money in hedge funds or investment funds run by Bernie Madoff or Stanford or anyone but themselves.
I don’t think trust is coming back for some people, not for as long as they live.
~~~~~~~~
To comment email alllie at alllie@newsgarden.org
~~~~~~~~~
© Alllie 2009
Distribution: This article is copyrighted by Alllie, but permission is granted for reprint in print, email, or web media so long as this link is attached, http://newsgarden.org/chatters/homepages/alllie/alllieblog/ .