By Daniel A. Mica - 04/01/08 05:20 PM EDT
These days, K Street has a new hurdle to face. The Treasury Department has called for an overhaul of the financial services industry, which is a major issue for our group, the Credit Union National Association .
The purpose of this column is not to discuss the merits of the Treasury proposal — that is an entirely separate discussion. But the effort illustrates a broader point: While doomsayers talk about a catastrophic meltdown or an economic disaster about to befall our country, if not the world, those of us on K Street need to take a deep breath and take stock of reality.
Certainly, whether you work for a private company, a not-for-profit trade association, a K Street firm or even the U.S. government, you must be prepared. There could indeed be severe and deep economic problems on the horizon, the type of problems that could be called “catastrophic.”
But we need to remember that the worst of the worst almost never happens. We have had only one Great Depression since World War I, and we have learned a lot since then about not letting things get that out of hand again. Since that time, we have seen a dozen recessions. And in each of these recessions, most Americans kept their jobs, Congress did not go away, the stock market remained open, the production of food, clothing, consumables and daily goods did not stop, and the regulators did not cease to regulate. There is much more reason to expect that this latest slowdown will be another recession rather than the second Great Depression.
This is not to downplay the great deal of suffering, financial loss and personal and emotional damage incurred during the Great Depression, much of which had a legacy bearing on future generations. But individuals, corporations and the government survived. And in the process, they found new and better ways to ensure against such downturns while building a better standard of living for our entire country.
The likely results of any serious downturn today will see the Congress operating, manufacturers producing, people working, small businesses reemerging and possibly even leading the way, and once-faltering institutions regaining their footing. Beyond the negative fallout, Congress will stay active in pursuing new rules and regulations that include transparency in financial services and corporate entities, safety and soundness in all financial and investment sectors, and endless proposals to prevent a repeat of what led to this current crisis.
And yes, regulators will also continue to call for a major push for new and better public policy, thoughtful industry input and constant oversight for actions that may have unintended consequences. The point here is that the world continues to operate, and the need for corporations and K Street to provide solutions is greater than ever.
All this said, an important caution to K Street and its audiences is not to overreact. Circling the wagons and shutting down everything in fear or paralysis will only exacerbate problems that might occur. This is the time for thoughtful leaders in all sectors to reach out, be creative and meet needs that address the concerns of our clients, customers and constituents, while meeting the test of good public policy that helps resolve the issues at hand.
One of the responsibilities of those of us in the K Street community will be to assure those we represent and those to whom we advocate that we can offer plausible solutions that are part of the meaningful debate. It will be more important than ever that level heads prevail, that inflammatory rhetoric be minimized, and that advocacy rise to the challenge of meeting not only the needs of its industry or interest, but the challenge of putting America back on track.
I do not believe that the worst of the worst will happen. But I do believe that whatever develops in the coming months, it will take an extraordinary effort on all our parts to keep America reassured. Reassurance, of course, means acting quickly when necessary, but also knowing when the problem will be solved not by legislation, but by American resilience.
Daniel A. Mica is the president and CEO of the Credit Union National Association (CUNA), which represents nearly 8,500 credit unions with 90 million members. Rep. Mica (D-Fla.) served in the House from 1979-89.