Wednesday, March 11, 2009

Economic Turbulence - A Message of Hope

I have been reading, studying and thinking about the current economic situation. I am not going to say crisis. For some people it is but for 40-50% of the people, they are better off this year than last. Anyone who makes a salary and even hourly people who did not make much overtime who makes the same (or only a bit less) this year as last can buy goods and services (and gas) for less than last year.

To some extent, this economy has greatly narrowed the gap between rich and poor. The wealthy people who owned stocks have all lost 40-60% of their net worth. After the stock market was already down, it still dropped 22% in the past 20 trading days. The wealthy also tend to be paid with more variable compensation - eg commission or profit sharing than lower paid people.

There is a great (but long) article in The Atlantic entitled "How the Crash will Reshape America" on how the current economic situation will impact people now and in the future.

The article suggests that our current times will shape a generation and the future. It may change us from a nation of entitlement and revitalize our work ethic.

People (and companies) who thrive in turbulence are those who are fast and flexible. They change their definition of who/what they are if need be. In some cases they change fields altogether. Flexibility is helped by willingness to experiment.

Now is the time for good old fashioned work ethic. The past decade created some complacency and dare I say laziness in some. Those with work ethic can still thrive. Work ethic is not only about hours but working while you are "at work".

Now is the time to be proactive. The phone will not ring as much so you need to dial it. Opportunities will not hit you in the face, you have to look harder for them.

Now is a good time to read and study. I am constantly amazed at people who figure they are out of school so no longer need to do this. Learners will win.

Debt is bad. Especially now. The current economy rewards the savers well.

Those who can delay gratification are rewarded now more than ever. Those who just have to have it now. Those who cannot put off their fun to study. Those who choose to play rather than work the extra will have great difficulty.

Now is a good time to be thankful. Yes thankful. List the things you can be thankful for. Gratitude rather than bitterness brings not only happiness but more future success.

And finally, people often ask me "when will this end" and "how bad is it". I suggest it is not as bad as the press says. And I think by the end of the year, things will begin to improve.

5 Comments:

At 7:42 AM, Blogger Gerhard said...

I agree with the fact that the economic condition is not as bad as the media makes it out to

 
At 2:25 PM, Anonymous Anonymous said...

I really liked this article! I like the idea that when things get tough, it's the hard-working and patient ones who prevail.

General Patton said once, “Success is how high you bounce when you hit the bottom.”

 
At 7:10 PM, Blogger Fred said...

Jim,
As usual, an insightful post. It's so true and I'm saying the same thing - but without the succinctness you have. You covered all the points that people miss, yet should rejoice in.

Low oil prices will alone add 1 trillion to spending for the 90+% who are still employed. And with the price of everything else going down (generally), lifestyles are improving (tax free too!).

And with the low, low interest rates, along with all the incentives and stimulous will get Canada going. And our neighbors to the south will too, albeit a little later.

In Canada, I think visibility will start to come after the first quarter and as you say will start to get better. The media tends to forget our timing is not the same as the U.S. as well.

The fast money will have lost much of it back, while the hard-working tortoises will be able to catch up. And more importantly, as you say everyone (esp the younger generation) will learn how it really is supposed to be.

Hope all the other CEOs and leaders out there are saying the same thing.

Fred.

 
At 9:16 PM, Anonymous Kevin said...

Great post Jim. I agree, in general people listen a bit too much to the media. I hope you're right that by the end of this year it starts to rebound. Not to say that this year won't be fun, yet challenging!
Opportunities are out there...we just need to find them!

 
At 12:51 AM, Anonymous Anonymous said...

I quite agree with your comments also, Jim. Lower paid workers (such as your sales reps and other non-managerial staff, warehouse people, etc.) are bound to do better for themselves and their families as a result of, for example, falling gas prices and interest rates. A good optimistic point of view. As a long-time business owner myself, I have long advocated a strong work ethic among all my staff, especially the lower paid ones. After all, they have the most to lose should we need to make an unforeseen staffing adjustment.

 

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