The local face of the financial crisis

The media and politicians have painted the past year’s financial crisis as a dance among giants.   We read about banks that are too big to fail, trillion dollar government deficits, enormous TARP and stimulus packages, bailouts (or government takeovers) of pivotal industries.  And now we are assured that the medicine is working, the economy is improving, and the banking system has stabilized (except for Greece).  The debate has moved to the margins: bonuses, taxes, legislation, regulation.

What struck me on my recent visit to the US is how out-of-step that is with individual experiences.

Local news sources report the struggles that communities are having as they try to continue funding basic citizen services.  Villages are governed by town councils: a manager and aldermen from neighborhoods, local businessmen and engaged citizens. Their budgets are being pinched as investment returns dwindle, rainy day funds are depleted, and business and homeowner tax payments shrink.  I credit these people with trying to act responsibly within the limited budget they have.  As a result, they increasingly outsource police services, close parks, and lay off school teachers.  

Local citizens are struggling to cope with the effects of these cuts.   Most still pay taxes, even though their  jobs are threatened, they may be struggling to meet a mortgage on a house that is losing value, their investment and retirement accounts are diminished.  But their constant dollars paid-in are yielding less and less return in public services.

So town meetings have become angry microscopic face-offs between non-professionals trying to manage a dwindling tax base  and citizens who want value for their tax money.  And, at this level, its all very personal: school programs, safety, libraries,  potholes are all up for argument

Thus, village politics and economics are becoming victims of the huge impersonal banking and governmental forces playing out above them.  And I don’t hear anybody at the government or banking level talking about how to help. 

The big-picture theorists simply don’t appreciate the lasting damage being done to citizen confidence and cohesion at the local level, the impact on people’s perception of a fair and stable social fabric.