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Posts Tagged ‘economy’

We All Have to Learn to Flex

Thursday, January 27th, 2011

If we want to thrive personally, corporately, and as a nation, we need to learn to change quickly.

Today’s headlines announced that the national debt will top $1.5 trillion by the end of 2011. That’s $1,500,000,000,000.  There’s a lot of finger pointing about that number, but at it’s core, it’s the same problem that keeps our kids from excelling in school and our businesses from outpacing the competition in the global marketplace.

The problem at the bottom of all of this? We have become very inept at change. The President can talk all day and all night about innovation, but until we–individually, corporately, and nationally–get used to the idea that you can’t make progress without letting go of what we’re already doing, we’re not going to get anywhere.

We need to get used to the idea that what we have going needs to go. GM seems to finally have figured this out with cars. They are poised to take back their spot as the best selling car maker  in America (from Toyota) as a result.

But how about the rest of us? When we insist that we get our same health care the same way, that’s not a personal right. That’s an unwillingness to explore a better way. When we insist that companies provide health care as part of employment, that’s not workers’ right, that’s just plain stupid. We tie our employers to expenses that other countries’ workers cover through different channels and then wonder why we can’t compete with the cost of our products.

Even when you insist that you should be able to go to the same grocery store, use the same bus route, or get the same service from the same public agency the same way, you are guilty of being part of this problem.

And this problem is THE problem. Entitlements come from expecting things to stay a certain way. Outrageous union contracts that are killing the entity in which they are employed expect they should keep getting their share the way it’s always been even if reality has become drastically different. (And some of the worst offending unions of late have been police and fire brotherhoods.)

Critical legislation remains undone because too many vocal sissies were unwilling to accept that things have changed and their pet projects have to go for the sake of the greater good. City and county budgets get shredded because “I’ve got mine and I’m keeping it” out shouts “How can we get through this with a united effort?”

There’s nothing in the Declaration of Independence that guarantees anyone the right to have things stay the same. There’s nothing that says because things were nice for you–or me or anyone–they are going to stay that way for the rest of that lifetime. Life has a lot of curves. Insisting that things be kept the same for your comfort is like pretending the next curve isn’t there.  That’s a sure recipe for a massive wreck.

We need to learn to flex–to let go of what we’ve had for the sake of dealing with what’s happening effectively. Every time we lack the courage to do that, we make this horrendous problem worse.

Mary Lloyd is a speaker and consultant and author of Supercharged Retirement: Ditch the Rocking Chair, Trash the Remote and Do What You Love. Her website is http://www.mining-silver.com

Bailouts — When Not to Help

Tuesday, December 9th, 2008

We are in interesting economic times, to be sure.  But it’s when we get into the tight spots and near the edge like this that we learn the most–both about how to deal with the difficulty and about what we are made of.

With more and more of the big companies standing in line for government help–which basically is going to come from all us little guys–the question eventually has be posed:  Who do you help and who do you deny?  This can’t be decided on politics.  And it can’t be decided by who does the smoothest job with the sales pitch to senators and members of the House.  Handing money to the wrong people is just going to prolong their agony and drain our respective wallets.  We need to be smarter about it than just saying “Well, there are a lot of people who will be out of work if this happens.”

Those who do stupid things should be left to deal with the consequences of those decisions.  How else will they learn not to do those same stupid things–or new ones–in the future?  If these were teenagers who broke curfew, that would work.  If these were individuals who broke specific laws, it would work.  But these bailout decisions are far more complex than that.  Or so those close to the negotiations are quick to tell us.

GM says we need to help them so that all those well paid union auto workers keep their jobs.  There is no guarantee that will happen if we keep them afloat.  In fact, if they are paying attention to the sales forecasts, some of those folks will get pink slips anyway.  Then they will be using the money we lent them to pay the union not to work.   Agreeing to that was pretty stupid.  While we’re at it, requiring an employer to agree to that was also pretty stupid on the part of the union.  Just where did you think they’d get that money?

Some of the people laid off will be at the auto dealerships.  Some of the companies will even go under.  This is called the bottom of the economic cycle.  It’s Economic Darwinism–an essential part of a robust economy.    When the strong survive, the economy rebounds and thrives.  When we run around trying to keep the weak outfits in business, we all lose.

Those who have come to the marketplace since the recently-departed nice long bull market started have the naive impression that downturns are not supposed to happen.  And that if they do, somebody else is supposed to fix it. Nope.  It is survival of the fittest at its best.  And if the fittest are headquartered in Japan and Korea, perhaps it’s time to develop a new strain of US automakers.

If Chrysler whines about the economy and blames that instead of their own calcified thinking for the mess they are in, are we helping anyone by letting them continue that delusion?  And if Ford can make it “but it will be close,”  then make it, dammit.  Put your hand back on your pocket.

I personally don’t want to give the maker of the Hummer two cents  It was a travesty to offer that gas hog in the first place.  Nice of you to blame the consumer now that the market for it has soured.  But you bet on what that consumer was going to want.  You  lost track of one indisputable fact.  Consumers are fickle. You bet way too much money on announcing affluence and far too little on building good cars.

In tough economic times, the small business owner has a lot to teach the high paid executives.  You don’t lament the problem and go on spending money.  You cut every expense you can.  You renegotiate with suppliers.  You “make do.”  You lay people off if you have to.  You go to the employees and say “Either we figure out how to make us competitive together or the company seeks bankruptcy and you will have concessions forced on you.”  Can you imagine the mom and pop store on the corner going to the mayor and saying “We can’t make ends meet.  Give us money to do it.”?

This disaster is the result of a long series of short-sighted executive decisions.  Boards of Directors paid those executives handsomely for such decisions.  The house of cards has fallen apart and still you refuse to face reality.   Yes, good people will be affected.  The economy might worsen.  But if we give you the easy way out on this, you aren’t going to learn a thing.  Then it’s just a matter of time before we live this disaster again.