President Barack Obama has quite a bit to tackle in his first term.
Paul Zane Pilzer, one of the world’s renowned economists and former White House economic adviser, spoke to a crowd gathered at the U on Tuesday night about five major problems he believes Obama’s administration will soon have to deal with.
Dressed in blue jeans, adidas running shoes and a baseball cap8212;an unusual outfit considering his résumé8212;Pilzer leveled with those in attendance to address the dire circumstances of the nation’s economy.
“Our banking system has completely collapsed,” Pilzer said. “We don’t have a bank now that works for us.”
Pilzer said there are major issues the federal government needs to immediately address: the banking system, negative interest rates, unemployment, home mortgages and the wealth gap.
The banking system, which was affected deeply by the economic collapse in September, has lost trust from investors, analysts and the American population in general, he said. In the face of such disaster, many Americans are now desperately saving in fear that the situation could get much worse.
“The consumer has a lot more disposable income than he had six months ago, because he’s scared to spend it,” Pilzer said. “In order to stimulate the economy, we need to start spending again.”
Alarming trends have developed since the collapse, including a 5 percent decrease in consumption of petroleum because of rising prices, a statistic that Pilzer said was terrifying.
During the summer, immediately prior to the beginning of the economic crisis, gas in Utah rose to nearly $4.20 per gallon, prompting many people to forego vacations and travel, further crippling the economy.
“All of these problems are definitely affecting our nation,” said James Carroll, a senior in marketing. “There is a significant portion of our population, near 20 percent, that live below or near the poverty line, and it makes people afraid.”
Pilzer responded to this concern by citing the book The Affluent Society, published in 1958 by Harvard economist John Kenneth Galbraith, which prompted serious discussion of the growing wealth gap in America. The issue, Pilzer said, is still relevant in today’s world.
“In The Affluent Society, there is no distinction made between what’s necessary and what’s luxury,” he said.
Although he presented many problems facing society, Pilzer was also quick to offer a positive side to the situation.
“When you think about the Great Depression, you think that everything just stopped, but everything still worked, just at 10, 20, 50 percent, so it’s not as bad as it seems,” he said.
Although times are bad, Pilzer said he is optimistic about the outcome, however long it might take or how hopeless the situation might seem.
“People ask, “How are we going to live through this?’ and I say, “Faith,'” Pilzer said. “I don’t know how, but I have the faith that we’ll find a way to get through this.”