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Posts Tagged ‘economy’

From a recent essay by NN Taleb:

Then we will see an economic life closer to our biological environment: smaller companies, richer ecology, no leverage. A world in which entrepreneurs, not bankers, take the risks and companies are born and die every day without making the news.

My question is… do we actually need to establish these rules or is the “market” already enforcing them?  Media is a good example.  The media companies are getting smaller, more diverse and very little leverage compared to how it used to work just 10 years ago.

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This is a pretty useful data dump from Google’s CEO

Economic situation pretty dire. Combination of what we’ve seen does not appear to have a bottom. People are using the Internet more. Obviously will affect online ad market because our systems are so tightly tuned. It will eventually be reflected in CPC, CPM. We are not immune to this. We may be better positioned from ad perspective, but ultimately the real pain felt by companies worldwide will sometime translate to our world

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So, the question comes up more than once…

“What’s different about the changes that occurred in the 60’s and 70’s from the changes we are experiencing during our current crisis?”

There are not many parallels between the two times because they are as different as the 50 years apart that separates them. ALL the context is different. How could they possibly be similar?

First of all, we are just started the reaction and the responses to the last seven years and the 31 years leading up to this. It has just begun. You didn’t think it was some Palooka on Wall Street or in corporate America that made this happen, did you?

There are a lot of things that came together in the 60s and 70s that made them what they were and there are a lot of things that are converging now to make this what it will be. That is where the similarities probably end.

The 60s and 70s was the push back against repression, control, delayed gratification and isolation. The early 60s was a set of things in opposition to the status quo…. then other things came together, not by plan but by their own path and the confluence went POW!

Music was the medium like the Internet is today… But, no one had any idea what they were experiencing and it wasn’t because of the drugs or music.  Caesar didn’t realize what was going on either. It was just what was happening.

There were waves of change between the surfers-dudes and the button-down guys represented on the one hand by parents, Pat Boone, The Kingston Trio and, on the other, the Beach Boys, Bob Dylan and the Birds or Jefferson Airplane.

  • Drugs, sex and rock and roll
  • The pill
  • The war – the draft – the secrecy
  • The car
  • Woman’s liberation
  • The idealists

The “pill” represented freedoms never imagined as did the car. Both were escapes from mom and dad’s world… In a similar but opposing ways, Britney Spears music is devoid of any content relating to the world today as the Zits cartoon series is today.  The 60s and 70s had irreverent tunes and MAD magazine… Both ‘anti-now’.

But where is the VOICE of today? I don’t mean the Village Voice, which morphed into respectability and successfully collects ad revenue to support circulation of its coffee house rebels. I mean the “VOICE” of someone calling the ball on what has happened in America. That means accounting for losses as well as our mis-gotten “gains”. Whose voice is going to ring out to address America’s privatized profit but socializes risk, isolation from allies, might-makes-right arrogance and the branding of ‘Democracy’ through colonization?

We have untold messages yelling at us about losing allies, losing hope, losing dialogue, losing respect, losing trust and openness that is displaced with secrecy, fear and loathing of anyone different from us including our government and the other boss in the corner office.

What are you willing to give up? Cassias Clay was willing to lose everything. Martin Luther King Jr. did. Freedom riders, lunch counter activists and everything in between including those who were caught when the world changed on them like it has today for us.   You know who I am talking about; the cops that thought they were doing the right things, the governors, the FBI, the soldiers, the parents… they were All doing what they were told was right even if it was the opposite from what those they were repressing had been told.

If you have no answers, the next 12 years aren’t going to be a good time for you in America or Europe, or Japan or… You will end up sour and ailing because today you are witnessing the tree of entitlements being cut down. It will take years to grow another. What is the expression in business? “He is a dead man just looking for a place to lie down!”

So, where is the lightening rod for change from all this doom and gloom?   Where is that person going to come from? Come on; use that teraflop of processing power and your angry brain to generate something you like.

  • Is it the blogs?
  • The social communities?
  • The recipient paparazzi replacing investigative reporting?

With all the complexity, technology, information, misinformation and confusion…what we’ve done in the past isn’t going to be what we do in the future.    Some prognostications:

  1. More suffering as the financial stuff sinks in and new things will rise out of the ashes.

Hard times are going to drive a new of barter or “in-kind” exchange. Will it be a cottage industry economy? Will it be a network community sensitive to exchange and barter… a Woot.com for product and services grow up? I am guessing it will be those types of things.

That will result in the middle man being taken out of the formula for commence more and more.  That is unemployment and that leads to some heart ache but change.  If it didn’t we’d be using buggy whips today…

2.   Having a black President is a lightening rod! Having a President with a vision will draw the volts    and colts as needed.

    Now the insurgents in our own country will be running for the caves. And when they come out we, the people, have to meet them. We have to find our cohones and get them in the game.  You don’t need to change them; just participate.  After the election we’re going to hear and see some nasty stuff. If anything happens to the President there are going to be riots for all sorts of reasons and it won’t be only if our black president is gone.

    This all sucks you know… it sucks because it is not COMPLEX. It sucks because we have to experience it to grow.

    All the money and power falls apart at our feet without the slightest bit of introspection. We’ve had no introspection and we all are the greedy ones living outside our means.

    For them and for us, it’s all about the race, the chase, the game for positions and status. Trouble is, once you’ve arrived, where are you? We are rudderless now.  Our experiences will put us on a course with a world view rather than a mirror view.

    It is as reported to be for us and for our government?   Power corrupts and absolute power corrupts absolutely.

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    We know that behavior is not simple but there are simple behavioral components that keep getting ignored. Relative to what we all experience in life like conflicts in the Dan Ariely remarks below and in a previous blog on this site.… we recognize his statements on habits, good and bad, etc.  Yet there is a second component that comes to be more easily considered as well.  Follow along…

    Dan Ariely: ….(on the October Bailout, politicians, Wall Street, etc.)

    The second thing is that nothing has changed much in the short term living of people. In some sense, this is smaller than the effect of the increasing gas prices.

    Greer: Yeah.

    Ariely: What is happening? Basically the thing is we are creatures of habit, if you think about it. The best predictor of what we will do tomorrow is what we did today. That is it. Habits are good and bad. They are good because they help us save energy. We don’t have to think about it. We don’t have to contemplate every cup of coffee if it is worth it or not. As a consequence, we get into habits.

    When we lose 50 or 500 interactive habits all at once via an earthquake, hurricane, family death, financial threats, loneliness, fall from grace, rejection…etc. (you get the idea) we have nothing to replace those ‘habits’ that are the products of conditioning shaped by consequences over years. We don’t have any behavior to replace those lost dynamic relationships with… literally!. We have to figure it out all over again. Sometimes it is too much to handle.

    Take the following stories bunched together from Associated Press just today…10/7/08

    Tuesday, October 7th 2008, 11:31 AM

    AP/The Courier-Journal

    LOUISVILLE, Ky. – A deputy coroner confirmed Tuesday that Hope Orwick stabbed her two children to death and then shot herself.

    Deputy Jefferson County Coroner Bob Jones said Emily Orwick, 9, and Lindsey Orwick, 8, were stabbed multiple times, though he could not say how many. He said Hope Orwick, 35, shot herself in the head.

    RELATED: FATHER KILLS SELF, FAMILY IN MURDER-SUICIDE DRIVEN BY FINANCIAL PROBLEMS

    Louisville Metro Police spokeswoman Alicia Smiley said a family member stopped by the house just before 7:30 p.m. EDT Monday and found the bodies.

    Jones said he hasn’t been able to pinpoint when the girls died, and police were trying to determine a motive for the killings.

    Crisis counselors will be available at the girls’ elementary school Wednesday, said Jefferson County Public Schools spokeswoman Lauren Roberts, who would not say which school they attended. Public schools in Louisville were closed Tuesday for parent-teacher conferences.

    RELATED: MOM KEPT DAUGHTERS’ REMAINS IN THE FREEZER

    Along the quiet, well-kept southwest Jefferson County street where the family lived, children played in their yards Tuesday. All was quiet at the family’s modest, ranch-style house, where there were no signs of activity.

    Two chaplains were at the scene Monday night, and Smiley said 15 or so family members gathered there. Police talked to relatives to see if they could help explain what may have led to the deaths.

    Neighbor Mechelle Rockey, 48, told The Courier-Journal that she has lived across the street from the family for about six months. She said the two girls often played outside.

    Contingencies around us control our behavior. We give them other ‘causes’ but as you can see it is contingencies that have all the power, be you the Pope, the President or the paparazzi… all the people above lost what they saw as options on what to do. Ariely and the others represent the loss (of behavior) on how to cope, what strategies to use, what methods to embrace, etc. They lost their behavior.

    What contingencies control your behavior and generates your ‘habits’ that define who you are and what you’d do in your crisis?

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    Someone asked me tonight to write about Bear Stearns and the ripples – the behaviors, the consequences.  This was the 4th person asking for perspective on Bear Stearns.

    Hmmm….

    Bear Stearns situation is probably an intervening variable, not primarily an event generating more behavior.

    The news of Bear Stearns serves as a reinforcer for those in investment or looking to large investors as guidance.  It serves as a consequence for those spending their money with them…

    For most of us it is yet another data point jumbled in with the more real costs of gas, milk, produce, and pretty much everything else.

    People responding to the economic issues for the first time based on Bear Stearns “sign of the times” type news likely have a less hand to mouth experience with our economy.  No judgment in that, just that it takes consequences at all spectrums to raise awareness of the total breakdown of the economy.

    ~R

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    Economic Help?

    I can’t say I’m surprised by media and governments narrow-minded approach to re-energizing the economy.

    Normally, I wouldn’t post on this subject, except that I think media plays a big part in reinforcing attitudes the public carries about our economic situation.

    We never seem to get beyond the basic economic indicators to explain the situation in government nor the media.  It’s pretty inaccurate to report only on and issue policies on employment numbers, consumer sentiment, consumer product spending and sub prime housing.  Worse, if you are basing any of your personnel micro economic decisions on those metrics, you’re doing yourself a disservice.

    let’s consider:

    • the largest expense in a person’s budget is HOUSING (whether renting or mortgage paying)
    • the second largest expense in a family budget and elderly budget is HEALTH CARE
    • the third largest expense in working family budgets is CHILD CARE (it becomes education for college people and post graduates)

    Food, transportation, entertainment, and connectivity are all distant runner ups.  Thus most of our analysis and policy deals with our least costly expenses.  Really, think about it.

    So now the economic stimulus package is going to give us $1600 back.  As if that makes EVEN A DENT in any of our major expenses.  Spare us the paper work and IRS work of issuing credits.  Fix Health Care costs via transparency or single payer or vouchers or tougher enforcement of fair practices.  Allow the importing of pharmaceuticals to reduce costs of medicine. Raise minimum wages and provide better laws for maternity/paternity leave to reduce dependence on child care. Don’t reduce school budgets for afterschool programs and more teachers as all it does it put pressure on the family to make up the difference. Stop nailing people on property taxes (which forces landlords to jack up rents and homeowners to not save) – yes we can replace those taxes with other taxes that don’t have such trickle down consequences.

    and so on.

    I don’t have the answers, no one does.  Neither the media nor policy makers are asking the right questions, so there’s no chance to find good solutions.

    Bloggers, News outlets, papers, magazines – report on the big economic factors in our lives, not the mice nuts.  The price of consumer gas is a mice nut. the unemployment rate is a mice nut.  Consumer sentiment and spending is a super mice nut.

    Actually, there’s no point in moralizing.  I’m trying more to deliver analysis.  Media, government, the public, academic instuitions, corps all reinforce each other.  if we want the behavior of the economic “system” to change, we have to change the reinforcers.  Our economy is in trouble because non of us have enough money to spend? or we’re just spending it on things that don’t give back? (health care! over priced housing! replacement child care! expensive secondary education)

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