What to do and what not to do about our current economic malaise is all the news these days with lots analysis of the technical aspects of the economy at the forefront by most of the pundits. They are the matters that can be weighed, counted, sorted into data banks and then fed into computer models that some supposedly very bright person built in the “garage” but that we the great unwashed public are to deem to understand. Those data are important and it is very useful that they be discussed in even greater detail than they have been so far. We could use an informed debate about the mechanics and greasy parts of the economy. But people aren’t machines and as you all have learned they don’t always behave as you might expect, predict or want them to. Those animal spirits come to the fore often and people start doing things that no computer model will predict.
Mostly you can expect most of the people most of the time to behave rationally. History would bear you out in that assessment. There is no doubt that we have a true herd mentality and when we are sure what to do more often than not we will follow the flow of those around us. The examples of that behavior are numerous. If you are in a large crowd anywhere, a football game, theatre, mall or wherever and you notice a large number of people heading for the exits even if there is no alarm or other warning of any kind, it is very likely that you will head that way too. That behavior doesn’t make you a lemming blindly following others to any result. Your experience has taught you that something must be amiss or all those folks wouldn’t be heading for the high ground. It is not an irrational reaction but a cognitive one. The problem can be that sometimes the matter that started a group behavior came from an insignificant event or was mis-interpreted by the early observers.
If we notice a lot of people that are acting apprehensive then we become agitated ourselves more often than not even if we have not idea of what cause the apprehension in the first place–we want to find out. People can be very resilient and resourceful when challenged and especially with a little leadership. Our markets now are a morass of confusing messages and the ones that make the headlines mostly tell us to distrust anything to do with “business” even though business is what puts food on the table for all of us directly or indirectly. The Washington mantra for months has been a pounding of Wall Street and various sectors of the economy from health to autos to energy and banking, pharmaceuticals and insurance. Heck, even the tanning salons got slammed with a huge tax just because they were there. Icons like Coke and Fritos get banged along with MacDonald’s and others on a daily basis. With all that negative karma is it any wonder that the economy shows little life and more importantly little enthusiasm?
The attitude from Washington is that everyone but government is not but a heartless bunch of rapacious crooks and you better watch out for them. But not to worry if we give enough power to Washington they we take care of everything and everyone. They really don’t get it that a large chunk of the population doesn’t trust the very entity that they think is the 7th cavalry to the rescue. The people sense that something is not right in Denmark to paraphrase the Bard. They throw mud and venom at huge segments of our economy and think nothing will stick to them. The big problem is attitude. They clearly project an attitude that there is no confidence in any entity but government and then wonder why the economy is sluggish.
Even if all the data points and the computer models look positive there will be no groundswell of economic activity until “everyone” has a better attitude about the future; they need confidence that things will work if they try hard. Great leaders get people to do things that seemed impossible or beyond their capacity. They challenge them with the task and encourage them with the reward for a mission accomplished. Remember the Alamo? Those guys had 13 days before the final battle. Several groups of men both left the mission with messages and some came as reinforcements during that period. The fact is that many of them could well have escaped to fight another day but that would have seriously diminished the prospects for ultimate success in the fight for independence. Leadership made them stay. Attitude mattered. Read some of the true histories and autobiographies of the men captured by the Japs during the War. Learn of the incredible cruelty and hardships they faced and dealt with years. The suffering and torment seems beyond the ability of anyone to survive but about half of them did. Those survivors all say that attitude kept them alive. Many just lost heart and literally laid down and died.
We need positive messages from Washington but that isn’t likely to happen until there is a radical change at the WH and Congress regrettably. Merely having new leadership is place will lift the spirits. The attitude will change before they are all sworn in. If that doesn’t happen we are in a for a long period of stagnant growth and economic activity at best. The message from Washington now carries with it a hostile attitude toward the American dream of financial freedom and individual achievement; it is all about collective achievement and sharing the pain. The worry is that we might actually achieve what they want in Washington. That thought is depressing for many and accounts for the current wary and even hostile attitude to Washington.
“The handwriting on the wall” expression comes from Daniel in the Bible. It was Daniel who could read the mysterious handwriting on King Belshazzar’s wall which predicted doom. http://www.olcranky.wordpress.com