Regarding the economy of the United States on March 22, 2008

Regarding the economy of the United States on March 22, 2008.

I noticed that many people are reluctant, or "were" reluctant, to use the word recession as the economy spiraled down in 2007. Yet in my eyes the recession was late and it annoyed me when people denied it’s arrival. Stockdale suggests we don’t keep our head in the sand if we want to survive.

"Every good-to-great company embraced what we came to call the
Stockdale Paradox: You must maintain unwavering faith that you can and
will prevail in the end, regardless of the difficulties, AND at the
same time have the discipline to confront the most brutal facts of your
current reality, whatever they might be."

Good to Great, Jim Collins

The fact that the US economy is in a recession, and may go into a depression, isn’t rocket science. It is common sense.

You have malaise at best in America. From that previous link ArabNews says:

The United States remains the sole superpower, but its dominance is
challenged by an economic and cultural shift toward Asia and the impact
of globalization, which Americans do not yet fully comprehend.

Add to that a few more items. Oh I don’t know we can start with high energy prices. The debt and deficit growing. The irrational exuberance of the housing market dropping. Overdue. Baby boomers buying more meds on less money because they "spent their children’s inheritance" (so sayeth bumber sticker wisdom). And bought condos in Florida they can’t afford. A crazy unpopular war but no way out without breaking commitments to allies.

To continue, no universal health care, nor any in sight. In Texas we are seeing our
taxes go up under a "Republican" governor. And the cost of sending kids
to college
has gotten so high the "default" package proposed by
colleges to students proposes parents double the debt of their children
in education loans for them (read banks won’t loan kids enough to
actually attend many colleges). The fed is bailing out, or wiping out, wall street bankers who lack common sense. Poisonous goods from China bought to increase the trade deficit. The fall of the dollar.

The future of the US resides with the Millenials, the selfish generation. That is once the other selfish generation, the boomers, get done being divided as they have been since the 70’s. The Clinton’s and bushes being skull and bones rivals I suppose. And yes of course a cynical sardonic X-er is penning this post.

So this pretty much all points in the wrong direction. Pretty much.

And the feds solution is to pile on the national debt. Awesome.

Now pile on the psychological response of the individual to the stress of a recession/depression/time-of-uncertainty. We get sick more, make errors more often, have more car accidents. etc, etc. Basically people tend to fall apart more in difficult times which compounds the problems.

As an employer these elements make it very hard to create jobs.
And it makes it very hard to expand the business. Or give pay raises to
people who deeply deserve them at an emotional level, yet they like me
are having a hard time creating excess profits in a crappy economy,
profits used to increase pay.

Don’t get me wrong – the company is doing well, just emotionally I am not feeling any sense of cooperation from the economy as a whole. And it requires me to be cautious.

I see one element of hope that many have ascribed to. Perhaps
irrational. There is politician exuberance in the hope many feel in
Obama. This optimism is refreshing. Almost. Much like the joy you see in a child’s eye when they gobble down delicious ice cream. And you step back and think "wow, not sure that is really the key to happiness long term." And secondarily "gosh, I wish I could buy in at that level" but you can’t quite. You can’t quite get there. The brain-freeze hits you first.

If you look outside of politics, there is very little reason to see hope. And that is a bummer. We will get through this, we always do, but something has to change. If nothing changes I see no way we can avoid going into a economic depression.

Last thought:

"In a fight between a grizzly bear and an alligator, the terrain determines the winner." – unknown

All in favor of moving the fight into the Redwood Forest please say "Aye!"