On September 15th, Fed Chairman Ben Bernanke uttered the words we’ve all been waiting for months and months (if not years) to hear. He said, “From a technical perspective, the recession is very likely over at this point.” Music to my ears! But…I believe that while things may have turned the corner, the economy won’t really get ticking again until lending and spending pick up. From a macroeconomic perspective, consumption is a major cornerstone of our economy. Spending is vital for our economic recovery. Our economy thrives when people spend. And when people feel insecure about where their next paycheck is coming from, they’re less likely to part with their pennies. Add to that banks that are shell-shocked and scared to loosen their purse strings and you’ve got a stalemate. An economy that won’t thrive no matter how much TARP money or tax cuts or federal work projects you throw at it. Spending and lending is the only way back to a thriving economy. That’s why government can’t fix this by itself. The private sector needs to take the reins and get spending and lending rolling again.

On the spending front I believe companies need to come up with creative ideas to make their products irresistible. A great example of a company thinking outside the box to encourage spending is the incentive program Hyundai announced in January; they’ll take your new car back if you lose your job within a year of buying it. It’s brilliant because it removes the fear factor. I’m more apt to buy a new car if I know I can get out of the financial obligation should I find myself unexpectedly unemployed. We need to see more of this kind of thing from companies.

On the lending front, we’ve got a serious problem because banks, particularly small banks that loan to small businesses, are stockpiling their cash, bracing for the day the toxic loans they’re holding on their books are defaulted on. As long as these banks are struggling under the pressure of these toxic loans, we’ll have a lending problem. This whole mess makes me wonder if the original idea of separating the toxic assets wasn’t such a bad idea after all!

So it’s up to us–we the people—to get this economy going again. As long as banks are afraid to loan, it’s up to individual investors who are willing to invest in private enterprise and lend others cash to take up the slack. Peer-to-peer lending will help provide some of the capital that’s lacking from the banks.

And at Zecco Trading, the online brokerage I founded three years ago to “democratize investing”, individual investors are putting their capital to work every day. By investing in corporate stocks and bonds, they are helping finance corporate (and thereby economic) growth, which will eventually translate into more jobs and more spending. And they’re doing it cheaper than ever before: 10 free stock trades per month with $25K minimum balance. $4.50 per trade otherwise.

With the combination of social lending and retail investing, you have a new financial dynamic, very far from the days when Pierpont Morgan had to personally spearhead a bailout of Wall Street in the early 1900s. It’s the democratization of the financial system. Power to the people!

Written by Jeroen Veth, CEO of Zecco Holdings