Getting Grounded: An Agenda for the Near Future
With the benefit of hindsight, we can see that we've been defying gravity for a long time. Probably since the days when Ronald Reagan and Margaret Thatcher lifted our spirits with passionate, well-delivered rhetoric extolling the benefits of deregulation, supply-side economics and the free marketplace.
In the span of my working life -- especially in the past decade, as I've come to run one of the largest multinational marketing communications companies in the world -- I've witnessed our economy rising to the highest heights. Largely on a bubble of credit, it turns out. Over the past six years, as I traveled the world and talked to CEOs and marketers in both developed and emerging countries, one assumption consistently prevailed: More is more.
In Dubai last month, the mood reminded me of a trip I made a few years ago to Cape Coral, Florida -- a poster child for the Florida real estate bust since even before the Florida market went bust. Who would have believed Dubai could be the new Cape Coral? "More is more" suddenly feels very yesterday, even in gold-plated Dubai.
The fact is that we largely lost the ability to differentiate between solid ground and pie in the sky. Rightly or wrongly, despite the aftermath of 9/11 and a quick blip following the dot-com meltdown, we grew comfortable at those extreme heights. In the U.S., we started to believe in our hopes and dreams to such a degree that we took them as absolute truths: Every individual can be a homeowner, whether he can afford it or not. A college education will better your life and buy you a ticket to a richer, more successful future. The stock market will rise. Interest rates are solid. Anything less than double-digit growth year-on-year is woeful underperformance.
The list of assumptions is startling in its naïveté -- and its optimism. Glass half full. Tomorrow is a brighter day. Good and plenty.
Now that the bubble has burst, our confidence is shot. Who among us knows what solid ground feels like? It's no wonder the outdoor industry is bullish. Trend analysts predict families will take their holiday by pitching tents at nearby campgrounds -- so they can literally stay close to home and down to earth. The symbolism is dramatic, and maybe even dreary, but the message is profound. None of our current leaders -- in government, business or elsewhere -- has faced a challenge of this magnitude before. No one of the current generation truly has the experience to say with certainty, "This is solid ground."
Today we are seeing the intimate, delicate interdependence of fundamentals and sentiment in the economy. The fundamentals are important; we need to seek out businesses that offer real value, companies with healthy cash reserves, etc. But it's clear that how people judge those fundamentals and how they value them is critically dependent upon sentiment. Sentiment reigns. Financial markets both reflect sentiment and drive it, in a volatile feedback loop.
Back before the subprime crisis hit in earnest, before the real estate market tanked, warnings were dismissed as doom-mongering. Naysayers were written off as quacks. My brother, a successful investment manager who often warned of a coming crisis, was the yang to my optimistic yin. Sentiment was blindly bullish. What a difference a quarter makes -- now, encouraging news is dismissed as whistling in the dark. Sentiment is determinedly doom-focused.
In this environment, public commentators and voices of authority face a serious challenge. They have to recognize the limits of their understanding; they must be real and realistic. This includes business leaders, academics and community organizers -- as well as bloggers, who have influence over a dedicated audience. We need to establish a clear divide between stream-of-consciousness speculation and informed conjecture.
Through today's media, everyone can broadcast their opinions. But in these delicate, anxious times, it's all too easy for rash opinions and hyped-up punditry to become part of the problem. Every dramatic word and image reinforces the fearful sentiment helping to drive this crisis. Regardless of who is to blame, it's profoundly unhelpful and potentially pernicious to use accusations as ammunition for ideological firefights.
The newest challenge is for each of us to understand when we can make a difference by adding to the dialogue. Words are weapons -- not as toxic as subprime mortgages but potentially destabilizing, or at the very least, annoying. One person's words of doom and gloom can ruin someone else's day, sapping confidence and nudging sentiment in the direction of depression. (Occasional gallows humor aside, extreme negativity is counterproductive and won't help anything improve or enable anyone to find lasting happiness.)
We need two interconnected things from the incoming Obama administration, as well as from leaders of other countries and bodies, such as the IMF and the United Nations, and leaders of the business community. We need levelheaded, timely competence and cooperation, and authoritative words and deeds that can calm sentiment and halt the panicky stampede. And from marketers, we need restraint and respect for the consuming public, who feels that right now, less is more. People are seeking fair prices from the brands and products with which they keep company, along with an appreciation for social values.
In all walks of life, people will increasingly want to tone down the rhetoric and dial into enlightened conversations. As noted by the BBC recently, it's the dawning of an age of smart talk, and perhaps a time when confidence can be re-inspired.
The hope is that the new year will bring three shifts: 1) More straightforward, articulate exchanges in the marketplace and between every one of us; 2) A greater responsibility throughout commerce, with fair play and respect permeating messaging and relationships, so that people feel genuinely connected to the companies they do business with; and 3) The end of the assumption that everyone has a right to instant gratification.
New leaders can inspire us with pragmatic optimism, demonstrated by what they do and how they live. Discussing good works is fine, but what counts will be values-driven decision-making that puts the communal good, good works and good results at the top of the agenda.
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Us hard working, bill paying, not living above our means Americans, who saw this coming when the "experts" didn't see, know what solid ground feels like.
Its funny to see sooooooo many of you incompetents joining us.
There's no McMansions with manicured landscaping, but at least the rug won't be pulled out from under you down here.
Sorry to say, but we also need some serious punishment for wrongdoers. I would guess that if those who were implicated in the Savings and Loan Crisis were all sitting in prison with their assets seized and auctioned off, those in positions of great financial responsibility would have thought things through more carefully over the last years.
Until we are willing to punish financial wrongdoing as thoroughly as we punish our poor and minority criminals, I doubt that we are going to make much progress out of this ideology. This appears to be the only way to get the old guard out of here and let some new ideas, some creativity back into our economic, political, and cultural life of our country.
It is ironic that most informed people know that the world can produce enough food to feed its inhabitants and that starvation is a problem of distribution. But these same people find it hard to accept that there is enough economic prosperity in this world and that economic deprivation is also a problem of distribution. They continue to accept the notion of losses in economic markets as though somehow money has been burned in a bonfire. Money isn't lost. It just changes hands. There is the same amount of money in the world today as there was yesterday. it's just in different hands. Guess whose hands? The UN reports that the 2 per cent of the wealthiest people in the world own more than 50 per cent of its wealth. On the other hand, the poorest 50 per cent own just 1 per cent. If the real job of government was to ensure that the rich get richer and the poor get poorer they couldn't be doing a better job ot it. Anything short of changing that dynamic is not real change in America or anywhere else.
It took the bubbles (IT, housing, credit) to create now. It took experience to create the sentiment. A desire to organize the economy around the idea of greed as self-regulating moral compass regarding handling large sums of public money is proving unsustainable. So too will any desire to quell the depressing or negative voice, or to disparage or belittle the positive uplifting voice. These opposite-end-of-the-spectrum voices exist because of experience and they are not mutually exclusive. A daily rah-rah session loses its' ability to inspire, its' credibility, in the face of a daily onslaught of sobering news, facts, and realizations. A daily descent into the maelstrom of doom and gloom can leave you heavy and disheartened. What do we know of inescapable reality, of the burning building? What do we make of Ms. Huffington’s article where she asks, “Who could have known?” Truth -- is it positive or negative or a combination of both. If both, which should you focus on towards solving problems? I have written about the water in the glass. It is not half-empty or half full. There is water in it and if one is thirsty, one will drink, and be satisfied or not. From that drink, may come an assessment, good or bad, but it all pertains to water in the glass. Throw out the assessment of good or bad and you are left with water. It seems the nature of water is crucial to assessment.
Bob Jeffrey states "Who among us knows what solid ground feels like?" WHAT?? He may have some gad-fly writers view of the world, but most people actually thought the SEC and Treasurery had actual JOBS. The message to the future holders of those jobs is - You comitt treason when you allow the core of the job go to zero positive attention. You can be political in publicity, but you are required to be focused on THE PEOPLE in doing the job. Read the Constitution. You work for me. Simply put, anything else is the definition of treason.
"we started to believe in our hopes and dreams to such a degree that we took them as absolute truths"
Nope....SORRY ........There never was a thing wrong with our "hopes and dreams" .......still isn't.....
"How did we get here?"
I submit that it has precious little to do with hopes and dreams except for their manipulation......
In service to the interests of a minority at the expense of everyone and everything else....including cherished value systems and social compacts refined over the course of centuries......and the very planet we inhabit.
What we were COERCED into accepting, whether we "believed" or not.....
was a bill of goods fabricated by that minority for thier own base and greedy motives......
A minority that clearly knew this system they had so artfully devised was both morally wrong and unsustainable............
This is clearly evidenced by their corruption of the political and finacial system AT ALL LEVELS in order to safeguard their new system of privatizing all profit....and socializing all losses.
The President-elect has a great opportunity...and a great responsibility and very LONG odds on success as he (and "we") have defined it.
Probably his HIGHEST hurdle is that captains of industry, members of all three branches, and vast swaths of the media are now presumed to be LYING for their own gain whenever they suggest what is good for us.....for the excellent reason that all now know they have been doing so for most of our lives.
tm
The only things that will count will be jump-starting economic growth again, so that jobs can be created and some semblance of economic normalcy can return to the American middle class. If Obama is seen by the middle class to have "saved" them, they will support more "progressive" goals, like helping the poor and unemployable. But the first order of business is "saving" the employable middle class, because if Obama fails at THAT, he will simply destroy himself and take down any hope of progressivism with him. Everyone should be focused on saving the economy for the middle class. That totally outweighs EVERYTHING now, including global warming. If Obama can creates green jobs, great. But the color of the jobs matters a lot less to Joe the Plumber than the existence of the jobs at all.
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