Panic — What Some (A Lot of!) People Feel in this Economic Climate

A childhood memory.  I loved comic books.  And I liked the ads in the back nearly as much as the comic books themselves.  Look like Charles Atlas; buy x-ray specs; sell Grit.  I wish the world could be filled with only Grit articles.  This is from an early editorial, (yes, I found this on Wikipedia):
Always keep Grit from being pessimistic. Avoid printing those things which distort the minds of readers or make them feel at odds with the world. Avoid showing the wrong side of things, or making people feel discontented. Do nothing that will encourage fear, worry, or temptation… Wherever possible, suggest peace and good will toward men. Give our readers courage and strength for their daily tasks. Put happy thoughts, cheer, and contentment into their hearts.

Well — it’s a nice thought.  A newspaper with only good news.  A world with only good news.  But that’s a little tough in these days.  The news is nearly all bad — and the news may be worse than we thought.  Consider these words from No Return to Normal:  Why the economic crisis, and its solution, are bigger than you think, by James K. Galbraith from the Washington Monthly:  The deepest belief of the modern economist is that the economy is a self-stabilizing system. This means that, even if nothing is done, normal rates of employment and production will someday return. Practically all modern economists believe this, often without thinking much about it. (Federal Reserve Chairman Ben Bernanke said it reflexively in a major speech in London in January: “The global economy will recover.” He did not say how he knew.) Galbraith goes on to argue that the economy is not a self-stabilizing system, and we are not even close to digging out of this danger.

Karl and I are choosing books with the current climate in mind for the April First Friday Book Synopsis.  Karl will present the new book by Ram Charan, Leadership in the Era of Economic Uncertainty:  The New Rules for Getting the Right Things Done in Difficult Times.  I have chosen Panic:  The Story of Modern Finanacial Insanity, edited by the terrific writer Michael Lewis.    (By the way, the book is worth the price for the Dave Barry essay on Real Estate).

Lewis opens the book with the broad equal-opportunity declaration that everybody has suffered from the fallout:  “The striking thing about the seemingly endless collapse of the sub-prime mortgage market is how egalitarian it has been.  It’s nearly impossible to draw a demographic line between the victims and the perps.”

Here’s my current read of the situation:  we are still in the “assign blame” phase.  We almost welcomed the side-story, which was legitimately stirring our populist anger, about the bonuses given to AIG executives.  But at some point, we have to get down to the business of writing new chapters for companies in distress.  How do we build a successful company in this era of cutbacks and panic?  I suspect that soon, book titles will make this transition from “what went wrong” to “where do we go from here?”

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