Ghosts of the Economy-Quiet Casualties of this Silent War
Note from Art: I’ve moved dangerously close to some controversial territory in this post. I like that. While my daily dose of wild-eyed optimism is not visible here, my core premise is always that the glass is half full and the most difficult problems are capable of being solved. Our current and long-term economic challenges here in the U.S. are solvable, but as time moves on and critical missteps made, the solutions become increasingly difficult to conceive and implement.
Ghosts of the Economy
You’re to be forgiven if you’ve walked into a coffee shop, cafe, library or anyplace else where those “between jobs” congregate, and felt a chill run down your spine. It’s one of those feelings that we get when we sense that something is wrong but we can’t quite put our finger on it. Like the characters in Henry Miller’s The Turn of the Screw, it’s the flicker in the corner of our eye and the haunting sense that we just saw a ghost.
Most of us don’t know why we get that uneasy feeling as we look around at the tables filled with coffee drinkers busy reading, talking or pecking away at their laptops. Perhaps it has something to do with the time of day and the size of the crowd.
Why aren’t these people working?
The shops are filled with good, talented, motivated people used to going somewhere every day and feeling needed and part of something. They are the same Moms and Dads used to bringing home a paycheck, stashing some money in the college fund, paying the bills and using the extra for a vacation or a new car. That stuff is on hold for now.
You don’t notice it as much in the newly unemployed. Their emotions run from panic to anger to optimism. Some promise to “take a few weeks off” and enjoy the freedom from the rat race. Others get down to work quickly on their resumes and networking activities. Mostly, they meet for coffee with those in similar situations.
It’s the ones that have been out for a few months or longer that give you that strange sensation. There’s something different about them. They are the same formerly productive, needed, vibrant people reduced to shadows of their former confident selves. The strength is faded just a bit from the voice, the shoulders are just slightly slumped and the spark in the eyes doesn’t seem to burn with the intensity of prior days.
We’re watching as people are turning into ghosts of their formers selves. No, not the ghosts of myth. These ghosts still take up space and consume and breathe, but nonetheless they are noticeably transparent, moving through the ether with the rest of us, but not having the same impact on life and the physical environment.
The transformation accelerates as people take refuge from the cafes and coffee shops and begin to barricade themselves inside their homes, in front of the television or computer screen. CVs still get sent, but people are going through the emotions. After a lifetime of focus and purpose…sometimes no more than needing to be somewhere at a certain time to do their part…big or little, there is nothing.
The Ghosting of America
I doubt that my use of the word, “Ghosting” is accurate, but it feels right here. While critics of my commentary above will accurately highlight that unemployment is nowhere near levels of the Great Depression and that there are encouraging signs on the economic front, it’s hard to ignore the ghosts around us.
Some are waiting for the economic stimulus to kick in. We all hope that something works, but the confidence isn’t there, because there’s little substance behind it.
My own unofficial observation is that we are in serious danger here in America of becoming a nation with great roads to support the movement of everyone else’s goods. Roads everywhere are under construction and big orange signs proudly reference ‘We’re putting America to Work!” They credit one of the many trillion dollar recovery acts at work.
I like good roads. Our improved infrastructure will ensure that deliveries of non-U.S. goods get to us quickly and in good condition. Meanwhile, is one more factory being built to support the research, development and manufacture of something that someone is willing to pay for, or are we focusing for now on the roads?
Lenin was Right, Kind Of:
Instead of selling the rope to hang ourselves with, we sold the ability to know how to make the rope to someone else, so that we could buy the rope and metaphorically hang ourselves.
There’s a great deal of discussion recently in the business press about the sad discovery that as we deftly exported our manufacturing in the name of cost and competition, we successfully gave away something called the “Commons.” While the term is a bit abstract, it references all of the ancillary activities, technologies and know-how that surround core industries.
It starts with moving manufacturing offshore and ends up with not only the manufacturing and the suppliers, but the research and development and future “know how” that we’ve given up. The product begets companies improving the product and others seeking to leverage the know-how and innovations in other products. Soon, the place where the idea started is administering and no longer fostering and facilitating new idea generation.
After the ability to make is gone, the ability to create begins to fade.
A number of articles have been published showing that American firms in America cannot and could not manufacture the Kindle device that I read the Wall Street Journal on this morning. We don’t have the know-how, the access to the intellectual property and the physical facilities to produce.
Ooops, I just received an e-mail update on a new road construction project starting here in Illinois thanks to some nitwit’s belief that building roads will stimulate the economy. That’s good. We’ll have better roads to travel on and drive past the vacant retail stores in our communities.
In the words of Heinlein, “The Roads Must Roll.”
The Solutions:
There are no silver bullets, but there are some bullets that will make a dent!
- Incentives, not disincentives to research, develop and manufacture.
- A tax system that encourages not discourages business. We are dangerously close to having the highest corporate tax rates in the world, supplanting all major European countries. High corporate and personal taxes have proven fatal to economies for decades.
- Programs that train and educate and leverage the talent withering away in our communities on something other than road building.
- Programs that support basic and applied research on technologies that will dominate the future. The Romans mastered road building…we don’t need to bank on this ancient art as our salvation.
- Recognition and support for the development of the future Commons. There is no going backwards…what’s been lost is gone for good. It’s about inventing the future now.
But, this is tough stuff and it flies in the face of doing the things to get re-elected. It takes longer to translate into people having more to buy more, and it’s not bankable in November.
Oh well, who is John Galt?
Help Wanted: Great Leaders to Solve Vexing World Problems
This is what I describe as a boil-over post—short on useful advice and long on observations about the obvious. I usually shy away from commenting on the world scene, however, I’m breaking form today.
As is my habit on gorgeous Mid-Western U.S. mornings (that’s for all of you folks all over the globe that love to point out the temperature differentials to me in February!), I rise early, grab a quick cup of English Breakfast Tea, glance at the Wall Street Journal and then jump on my bicycle for my wake-up workout. I suppose this morning’s paper is not much different than every other paper for the last few months, but as I said, this is a boil-over post: it’s been simmering for a while. My positive spin on the over-abundance of miserable news is that this is a great time for leaders everywhere to ply their trade and show the world what they are made of.
Just a few of our very visible and very important “leadership” opportunities:
The Economy. The Federal Reserve Chairman, Ben Bernanke has perhaps the worst job on the planet right now. In what is looking more and more like a perfect storm, the Chairman must simultaneously deal with the still-unfolding housing crash, the implosion in mortgage financing, the wholesale failure of some of the planet’s alleged smartest financiers to do anything right (think Bear Sterns), record oil prices, a record low dollar value, the specter of inflation and general weakness in many U.S. and global markets. Perhaps the only thing more complicated than the macroeconomic environment is the weather. Oh yeah, if Chairman Bernanke’s daily dilemmas aren’t tough enough, spend a few minutes listening to the windbags in Congress posture while they attempt to blame him for everything, including the ’29 crash.
U.S Auto Manufacturers. The headline I want to see is: U.S. Auto Executives Fired En Masse for Arrogance, Idiocy and Forgetting to Diversify their Product Portfolios. What is galling to me is that these executives had clear visibility into competitor strategies as well as the bigger picture of energy and oil. Did they really expect to live on the profits from the SUVs and Trucks of the ’90′s forever? Killing an industry should be a crime punishable by ample jail time.
U.S. Airlines (except for Southwest). Most of my work is in the Chicago-area, so I’ve avoided flying for a while. A good friend of mine described his recent experience on a major carrier as: “something out of a movie shot in a third-world country.” In a bold stroke, most major U.S. carriers (except Southwest) have decided to bet their survival on making an already lousy experience miserable. I wonder what happened to the memo that said that if we serve our customers and give them great reasons to use our services, they will help us weather the storm. Jail time for these execs as well. It’s time for some fresh approaches from new leaders interested in running businesses that serve customers.
Iraq. Absolutely no joking here…U.S. soldiers and Iraqi civilians are losing their lives. This situation has serious repercussions for the U.S. and for the Middle East for years to come. The next President will be saddled with resolving (hopefully) this nightmare. There are encouraging signs, but it is a complex situation. Kudos to the military leaders on the ground and the brave citizens that are working towards a self-governing, democratic Iraq.
Iran. Hmmm, if this situation wasn’t complex enough, the leaders in this country seem to relish their ability to destabilize.
I could keep going, but I won’t. It’s time to stop, with just one other light by comparison leadership dilemma: Brett Favre. As I’m writing this, my oldest son is listening to ESPN reporting on the Brett Favre saga. Put yourself in the shoes of the Packer’s GM, Ted Thompson, who has to decide whether to fire this remarkable Wisconsin (via Mississippi) hero or bring him back and let him play in spite of having moved on once Brett announced his retirement a few months ago.
I do have some advice for Ted Thompson, and it is based on the track record of Jerry Krause, the former Chicago Bulls General Manager who once indicated that one of his major goals was to build a championship team without Michael Jordan. How did that work out, Jerry?
The End of the Rave For Now:
Tough times and challenging circumstances provide outstanding opportunities for leaders at all levels to test their mettle and gain valuable experience. There have been few times in recent history with this number of complex challenges staring at us in everything that we do. As individuals, we cannot solve these issues alone, but we can hold our leaders from local politicians to congress and the next President accountable. We can make good decisions with our finances, demand accountability from our elected officials and challenge the leaders in our businesses to do more than focus on the short-term. We can support our troops even if we disagree with the policies, and we can cast our vote this November. It’s a great time for leaders everywhere to stand up and be counted.
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