Doug Poretz

America's Multiple Choice Economy

How long do we keep saying "recovery from this recession is sluggish" until we start saying "this isn't a recovery at all"? If "recovery" is a synonym for "return," i do not think we are going to have a "recovery" because I do not think we are going back to what we had for at least a decade .... there have been too many cultural changes, including the accelerating (both in speed and impact) transition from a Manufacturing Economy to a global Knowledge Economy.

Markets Have Hit a Bottom, But Is It THE Bottom?

Your article is excellent but it is based virtually entirely on looking at the economic/market crisis as solely an economic/market crisis -- I don't think it is. I think this is primarily a cultural problem of widespread irrationality from all quarters (governments, individuals, institutions and the investment/finance community as a whole). As such, cultural change will be one of the results -- among the cultural changes will be a much more conservative consumer, and that will be important because the consumer accounted for somewhere around 70% of our economy at the peak. In addition, it is becoming increasingly clear that the world is on the precipice of major political issues -- take a look around the world (see this narrated, self-running PowerPoint for details: tinyurl.com/daaua9) -- what will happen to markets worldwide if any of the massive protests erupt into something more than just "ordinary" protests? If you missed it (which wouldn't be difficult given the US mainstream media virtually totally ignoring it), 3 million people protested throughout France last week -- and look for major events at the G20 meeting coming up. The threat is very real and growing as the recession spreads. Then there are the issues of a globally interconnected financial market. And there is also the turbulence that comes from the transition from a manufacturing to a knowledge economy. And volatility not only in the price volatility but the access to basic commodities such as oil and food. So, the analysis of whether we are at a bottom that is based on economic and capital markets issues is enlightening but too shallow. Personally, I am not worried about whether the market is at a bottom of not at this moment -- I am much more worried about non-economic news that could blow away the entire cocept of a bottom.

Glints of Hope Despite Economic Tailspin

Factor into "glints of hope" the prospect that protests of the middle/working class against governments (and other "establishment") are increasing throughout the world. If this economic crisis continues to morph into a social/cultural/politi... crisis, "glints" will turn to darkness -- tinyurl.com/daaua9

Global Markets in Review: Economy, Markets

Great post -- please consider factoring into your prognosis of things to come the likelihood of a rise in social/cutural/politic... turnmoil -- it is already happening around the world -- tinyurl.com/daaua9 -- if the evolution of protests continues, the prospect of a bottom and then some sort of recovery will be pushed off much more due to major and perhaps global political upheaval.

Searching for the Bottom: Are We There Yet?

The question that is being asked that is wrong is: how does this recession compare to other economic crises such as the Depression? That defines the current situation as simply an economic issue, but it isn't. It is a cultural/social/politi... issue and if you look closely at protest events around the world, you'll start asking a different question: how does the current situation compare to other episodes of cultural and political upheaval such as the French Revolution? If you address that question, you'll come up with a shocking answer. The news media, especially in the US, has missed the common denominator of protests from ALL parts of the world: the middle/working class is protesting with significant anger directed at their ruling governments and the upper classes whom they identify as having failed and exploited them. I have chronicled this with links to news stories, photos and videos in a very long but important article you can see for yourself here: tinyurl.com/ccsga4 -- My analysis, I believe, isn't so much a prediction or a theory, but a stunning iteration of a global political pattern that should be of major concern. Because if trends continue to go in the same direction, the bottom is very far away.

Searching for the Bottom: Are We There Yet?

The question that is being asked that is wrong is: how does this recession compare to other economic crises such as the Depression? That defines the current situation as simply an economic issue, but it isn't. It is a cultural/social/politi... issue and if you look closely at protest events around the world, you'll start asking a different question: how does the current situation compare to other episodes of cultural and political upheaval such as the French Revolution? If you address that question, you'll come up with a shocking answer. The news media, especially in the US, has missed the common denominator of protests from ALL parts of the world: the middle/working class is protesting with significant anger directed at their ruling governments and the upper classes whom they identify as having failed and exploited them. I have chronicled this with links to news stories, photos and videos in a very long but important article you can see for yourself here: tinyurl.com/ccsga4 -- My analysis, I believe, isn't so much a prediction or a theory, but a stunning iteration of a global political pattern that should be of major concern. Because if trends continue to go in the same direction, the bottom is very far away.

Searching for the Bottom: Are We There Yet?

The question that is being asked that is wrong is: how does this recession compare to other economic crises such as the Depression? That defines the current situation as simply an economic issue, but it isn't. It is a cultural/social/politi... issue and if you look closely at protest events around the world, you'll start asking a different question: how does the current situation compare to other episodes of cultural and political upheaval such as the French Revolution? If you address that question, you'll come up with a shocking answer. The news media, especially in the US, has missed the common denominator of protests from ALL parts of the world: the middle/working class is protesting with significant anger directed at their ruling governments and the upper classes whom they identify as having failed and exploited them. I have chronicled this with links to news stories, photos and videos in a very long but important article you can see for yourself here: tinyurl.com/ccsga4 -- My analysis, I believe, isn't so much a prediction or a theory, but a stunning iteration of a global political pattern that should be of major concern. Because if trends continue to go in the same direction, the bottom is very far away.

Global Markets in Review: Economy, Markets

Great analysis. But I am waiting for another analysis that I believe is more important and more alarming. How about an analysis of how close we are to the conditions that existed in France prior to the French Revolution? How about economic riots in Eastern Europe? How about protest marches in Japan by the "temp" workers who are losing their housing? How about the large and broad disatisfaction of the middle class? How about the increasing antagonistic divisiveness of hardsh language of class vs class? How would such a revolutiuon occur in the Internet age? Shouldn't we be worried about the prospects of a global economic class revolution where a new type of community can be created on line without regard for time, language., geography or other borders, requiring little money and some basic social media skills? I think it's time to start worrying about much more than an economic crisis -- as dire as that may be, it pales in comparison to what MIGHT be

Misunderstanding the Great Recession

Extremely good article. Of significance to me is this point: "And like an addict, America needed more and more credit for the country to function." The use of credit was an economic situation; the addiction to credit was a cultural/societal situation. I agree with Mr. Hansen's point: "The first step in problem solving is accurate definition of the problem. Without accurate definition, the chances of resolution of that problem are diminished." And I think it would be accurate to define this situation, at least in part and maybe mostly, to a cultural issue. If you do that, you will also be more sensitive to the cultural changes that will be part of the solution, whether deliberate or not, and whether we like them or not.

Look at the culture! The American public is in the first stages of becoming a completely different type of consumer (intellectual/informat... based, relying on the Internet for a major component of the buying decision) as opposed to the emotional consumer that existed until now (this is shockingly established by some important new polls). The American capital system is being somewhat (at least) nationalized. The Federal Government is launching an effort to do more than regulate, but also to set policy. We are beginning to see a surge in advocacy campaigns relating to government proposals that will rival the consumer campaigns that have dominated our culture since WW II. Without arguing whether this evolution is good or bad (productive or non-productive or counter-productive), we are certainly making a Hegelian shift away from Capitalism. And it is happening in a truly global economy, where people are networked and anyone has access to the media. We better be at least as sensitive and as focused on the cutlural changes as we are on the economic changes -- the consequences may be even more dramatic and long-lasting.

The Antidote to Economic Malaise: A Culture of Collective Mindfulness

I agree with the need for a culture change -- in fact, I believe we are beginning the process of a culture change, whether we like it or not. But I believe the "culture of collective mindfulness" is more like a tactic than an overall strategy. I think cultures are likely to change largely as a result of an evolutionary action rather than an attempt to put fingers in the dike when the flood of revolutionary forces is already upon us.

I'd like to make two general points.

1. Try thinking of the economic situation not as an economic situation that stands by itself as if it was some sort of cyclical event that we'll work through, but as a subsegment of a more significant situation. See it in the context of a cultural event. Certainly there are cyclical factors at work, but i believe the depth and breadth of this situation goes far beyond simple cyclical economic factors. At the same time we have major economic turmoil, we also are going through the transition from a manufacturing to a knowledge economy (which, on its own merits, will give rise to new business models) ... we are now living in a truly global economy (also requiring new models) ... we are seeing major political/demographic changes, including the eroision of the quality of life for the middle class ... there is incredible volatility as to both the availability and the price of essential commodities (food and fuel) ... and we have a population that has been swamped with "buy this" messages on a very forceful and constant basis since the post WW II expansion, which over the years has transformed "The American Dream" (which is really a World Dream) FROM one based on ideological beliefs and high standards for individual responsibility and opportunism TO one based on buy more, buy newer, buy bigger, buy more expensive, buy on credit what you cannot afford. That isn't just an economic situation. And thus, it won't be changed simply by economic changes -- expect to see some major cultural shifts. I think it is too early to predict those shifts, but it isn't too early to become concerned -- because these shifts are going to occur in a world where individuals can communicate (and coalesce into communities) online 24/7/365, unrestrained by time, geography and (moften) language. How would the French Revolution be conducted in the age of the Internet? You might want to start considering that question, and see if you find some answers emerging in 2009.

2. New Models -- I have some experience here because i have co-founded and helped build a communications firm (as in PR/advertising/interac... al) that has a radical new model, starting with the way we bill: we do not keep time sheets and we do not bill by the hour -- that is a basic difference that sets us apart (our growth and margins also sets us apart). Anyhow, I've written at my blog on the specific issues of extablishing a new model (tinyurl.com/8dvk8g). The suggestion that you should have a mistake-focused culture when dealing with a new model isn't "advice" -- it is an a priori truth. That is because new models have new mistakes. And unlike old mistakes that have become recognizable and defineable over the years, along with the remedy that more or less works, NEW mistakes are not recognizeable and there vare no precedents for what works as solutions. You only see them after they have bit you. That's when you say: "what happened?" Then, it isn't simply an issue of identifying it as a mistake, but you have to define it accurately (and that usually doesn't happen on Try One), and after you define it, you have to develop a remedy (and that usually doesn't happen on Try One either). So, the cutlure of "collective mindfulness" is a great phrase and a very difficult and time-consuming reality, often setting off (by necessity) a whole bunch of new mistakes in its wake. Another thing I have learned is that as you encounter new mistakes, you have to develop new solutions consistent with the core fundamentals of the new model (that is, you cannot use old remedies for an old model to solve new problems in a new model) -- as you do that, your new solutions make your enterprise more and more unique -- so you are going to run into even more mistakes that you won't know are mistakes (again) until AFTER they have hit you. This gives rise to a cultural phenomenon that isn't very nice -- you are correct in that you have to have a culture where everyone looks for mistakes, and that can be a good thing, but it also means that people stay focused on "what's wrong" and that becomes a problem if at the same time you fail to revel in your model, despite everything that is (and will be) wrong about it.

I applaud the effort to point the finger of blame at something bigger than "lax regulation" or "greed of Wall Street," etc. -- It is much bigger yet. It is, in my opinion, cultural -- but still, much bigger than a culture that lacks collective mindfulness. I think this is going to be a much bigger "correction" (or whatever it is called) than anyone currently envisions. And that concerns me. I think, all too soon, if I am correct, that phenomenon will concern us all.

The Current Economic Crisis: Hell, Meet Handbasket

I agree with much of this article ... except I would urge the importance of thinking to "the next step." I believe that whereas we can point to a number of specific "triggers" for the economic situation, ultimately the situation is attributable to a cultural issue.

Since World War II, people have been innundated with "buy this" messages. The benefits for increasing the efficiency and effectiveness of such messages were obvious, and so more effective communications tools and techniques were developed. I was struck recently by the news over a survey that showed that teenagers who are exposed to more sex on TV are more likely to have sex. That's shocking? Consider what hour after hour, day after day, decade after decade of "buy this" messages have had on our culture as a whole. Over the years, the impact of these messages translated into the culture that led to people over-stretching for their homes, realtors more than happy to craft that deal, mortgage companies willing to finance it, and a retailer out there willing to sell the new furniture on some really great terms ... Hey, let's get a new car for the new garage and go out for a great dinner, we'll put it on the credit card. Etc.

The death of the consumer economy that is upon us will drive many of those who push the "buy this" messages to cut their budgets and find more efficient distribution channels. This will accelerate the trend to rely more heavily on interactive and digital communications (or "new media"). At the same time, with a new political environment in Washington and a new White House promising to "hit the ground running" plus an energized and supportive electorate focused on "change" and a one-party Congress for all practical purposes, there is going to be a surge in "support this" messages from special interest groups of all ilks, sizes, persuasions and motivations. The proposed changes will be way too significant and fundamental for the special interest groups to sit on their hands.

If you look closely you can already see it happening: have you noticed the new TV campaigns for the AMA and for the chemistry industry, for example? When is the last time you saw them advertising? It's the tip of the iceberg.

As this happens -- that is, as the consumer becomes "the supporter," we should expect a major cultural change. If anyone is interested, I write about that sort of thing (from the perspective of a 4-decades long career in communications) at my blog, which is linked above.

Talk of a Real Estate Bottom Already Is a Waste of Breath

The residential real estate market is a food chain. There are no buyers of luxury homes if there aren't sellers of first-move-up homes. Like all food chains, the last market to go away is the highend, and the part of the chain that has to start the food chain is the small fish, or the first time homebuyer. Want to get the residential real estate market moving very fast and make political points? Propose that the federal government immediately launch a first-time home buyers plan, with some help with down payments and/or bought-down interest rates provided by the federal government. Want to really make points? Give an even steeper benefit to people in certain jobs such as teachers, firemen, police, nurses, etc.