What Americans Are Worried About

In today's economy, there are many things to be worried about. But one thing was clearly the priority in a recent CNN survey — jobs.

More than one-third of all respondents said unemployment was the most serious issue facing America today. As Paul Steinhauser observes for CNN, that is "almost three times higher than the 13% who felt the same way last April." The second-greatest concern, according to a comparatively sedate 20% of respondents, is inflation.

Small wonder. Nationally, unemployment — which stood at 8.1% when the latest figures were announced earlier this month (and which some experts predict will climb into double digits by the end of the year) — is higher than it has been in more than a quarter of a century.

In California, where the unemployment rate is already in double digits, approximately 10,000 people came to a recent job fair at Dodger Stadium.

With so many people looking for work, those who still have their jobs are, understandably, reluctant to spend their money as freely as they would in a stronger economy. Since consumer spending is the oil that lubricates the economic machine, this creates a perpetual downward spiral in which employers are more likely to cut jobs than add them, and many people wonder how we will ever reverse the trend.

All of which makes people angry when they see companies like AIG insisting on paying $165 million in bonuses and compensation after receiving more than $170 billion in bailout funds.

I can understand National Economic Council chairman Lawrence Summers' observation that AIG made these commitments before the economic meltdown. "We are a country of laws. There are contracts. The government cannot just abrogate contracts. Every legal step possible to limit those bonuses is being taken by Secretary Geithner and by the Federal Reserve system."

But I also understand what Fed chairman Ben Bernanke was talking about when he said, "It's absolutely unfair that taxpayer dollars are going to prop up a company that made these terrible bets, that was operating out of the sight of regulators, but which we have no choice but to stabilize, or else risk enormous impact, not just in the financial system, but on the whole U.S. economy."

In many ways, it strikes me as being similar to Citigroup's purchase of a new corporate jet after coming to Washington seeking bailout funds. In all fairness, I have no doubt that Citigroup placed the order for the jet before the recession began. But, as I pointed out a few months ago, the prudent thing to do in the current environment would be to cancel the contract and swallow any losses. Even so, Citigroup insisted on going through with it — and has been paying the price in terms of poor public relations.

AIG, it seems to me, has made a similar decision, choosing to go ahead and reward people as promised in spite of the economic conditions.

I understand the argument against regulation. In some industries, I can see regulation being too burdensome and too costly.

But doesn't today's economy prove that regulation is necessary in other areas — in both good times and bad?