On being ... reset
I’ve been pretty amazed at how often the economy has come up in my everyday social conversations the past couple of months. And all these conversations are pretty similar: they usually start with someone mentioning a new factoid that they’ve heard or read about the economy, then someone else jumps in with some other fact or new (uncomfortably big) number for something (unemployment, dollars their portfolio has dropped, number of pensions that are under-funded, etc.), the next person chimes in with another disturbing statistic, and so on. Invariably the discussions are peppered with lots of “it’s unbelievable”, “how is that possible?”, and “I just don’t understand”.
The other common feature of the conversations is that they seem to focus on the uncertainty about what lies ahead -- for the economy as a whole and for individuals. Proof of the heightened anxiety can be found in the simplest things, like toasts for 2009. Though wishing someone good health and prosperity for the New Year is traditional, I’ve noticed many toasts have been more specific, direct, and heartfelt -- with wishes for good health, good economic fortune, continued employment, and even wishes for the ability to withstand the economic storm that’s brewing.
The other day I heard what I think is the most insightful comment about the economic situation we’re facing. Jeff Immelt, CEO of GE, was quoted as saying: “This economic crisis … doesn’t represent a cycle. It represents a reset.”
When I first heard that statement, I didn’t know in what context it was made or how Immelt meant it – but on its face, it makes perfect sense to me. Indeed, it succinctly addresses my main source of uneasiness: the fact that I don’t think that this is just a phase the economy is going through and that if we can just ride it out long enough, things will go back to the way they were before. It’s not just that I think the problems are so fundamental, profound, and widespread that solutions that worked in the past won’t work. It’s more that I think that we should not expect -- or want -- things to return to the way they were.
When terrorism reared its head in the west and governments took steps to enhance their country’s physical security, people learned to adapt to “the new normal”. I’ll bet the likes of Jules Vern wouldn’t have imagined that one day you wouldn’t be able to board a plane without taking off your shoes first. And, though we may not like it, we have come to accept some loss of freedom and more government gathering of information about us. Even though these changes to our lifestyle have been made in the name of the war on terror – I think most people realize it’s not a war where there’ll eventually be a winner and after which life will return to the way things were. To put it another way: in the name of collective security, our view of the level of unfettered freedom we’re entitled to has certainly been reset.
If we simply accept that the economy has a natural cycle and therefore we draw comparisons and do things (like implement stimulus packages, works programs, tax cuts, etc.) that worked in the past in hopes of eventually recovering much of the ground that we’ve lost, then we’ve also got to accept the fact that eventually we’ll go through this again. I know, if my house were in foreclosure, or I lost my job, or the fixed income I live on dropped precipitously, I might not be so open to the idea of taking time to reflect on the fundamental changes that might be needed, much less time to let certain things play themselves out. But deep down I think most people, if given the choice, would willingly trade the highs and lows of what amounts to a feast or famine rollercoaster ride for a steadier, more level one, even if it is at a lower, more down-to-earth level.
After hearing about Immelt’s comment, I was curious to hear what else he might have said. Interestingly, in that same speech, Immelt went on to predict that those who understand that the crisis represents a reset rather than just a phase in a cycle will prosper and that those who don’t will get left behind. Though the speech was delivered at a conference on corporate social responsibility to an audience of corporate leaders, the comments seem equally relevant to individuals.
I realize mere talk about the economy is stressful to many these days and that the idea that we might have to accept many fundamental changes to the way we carry on may be difficult. But, I also see this time as offering a tremendous opportunity to re-define success and aim for a prosperity that is both sustainable and universal. If we do this both individually and collectively, the discomfort and suffering we will go through will be well worth it.
So, as this is the last column for the year, my wish for you all in 2009 is good health and prosperity -- but not necessarily the type of prosperity we’ve coveted in the past.
© 2008 Ingrid Sapona