Shortening the long recovery

I grew up thinking I was truly working class, far more farm-and-trailer-park than diploma-and-white collar.

One grandfather was literally a dust bowl farmer. The other was a back office accounts clerk for Safeway who spent a lot of hard years hopping trains.

My dad worked his way through law school tending hogs and managing wheat harvests across the Midwest.

But when my mom started researching our family’s history a few years ago, we learned something interesting.

Before the body blow of the Great Depression, many of our ancestors were professional people, well educated and affluent — including a prominent doctor.

Then came the Crash and the crucible of the 1930s, wiping out our family’s grip on wealth and security.

It took us a couple of hardscrabble generations to recover.

I worry that the same downdraft is brewing now, a wealth-and-opportunity devouring cycle that might set families back in ways we don’t yet understand.

Consider the new Pew study, released March 25th, showing just how many people’s lives have already been scarred.

Half of Americans say they’ve lost a job or had a family member or close friend lose a job due to the financial crisis.

More than half have lost some or all of their savings.

For most Americans, our homes are our single largest assets, the source of most of our financial leverage.

But now, according to a separate study, nearly a quarter of us owe more on our homes than they are actually worth.

Whole lifetimes of wealth building, work and investment have been erased.

I’m no doomsayer. I’m convinced that American ingenuity and drive will push the economy out of the doldrums faster than most pundits think.

And I think the big systemic problems with our government — the Federal deficits, looming red ink in our social entitlement programs — can and will be fixed.

But it’s time to start thinking about how we can prevent families from falling off the cliff, the way mine did during the first Great Depression.

To create new wealth and opportunity, the first goal is to make sure that our fragile Middle Class doesn’t backslide even further.

To the extent that the government feels a need to launch new stimulus programs, the money should be targeted there: at the people who, once back on their feet, will generate our next wave of prosperity.

The second goal has to be creating new safeguards in our financial system, so that we can feel confident again.

That same Pew survey found that 74% of Americans believe there’s an even chance that we’ll experience another financial crisis in the next three years.

Sixty percent of respondents put financial sector reform at the top of their wish list, even above health care, immigration, and the Afghanistan war.

Americans are tougher and smarter than we’re given credit for.

But it’s hard to stand up and dust ourselves off and take new risks when we think the bottom might fall out again.

Your thoughts? Comment below.