schneiderism

Ahhhh… Optimism! The Future is Shiny.

Siting a recent McKinsey Quarterly survey, John Baldoni at HarvardBusiness.org optimistically offers that we may be close to the “bottom” of this economic crisis, and that we should prepare for the upturn. The operative word there is “may”. Actually, he qualifies this by saying whether or not we are approaching bottom, now is the best time to begin planning for an eventual upturn:

“Living through a downturn is not a process of grinning and bearing it; it is a matter of working the objectives toward your goals as well as planning for the good times that will occur someday. And if your organization does succumb, you will have learned valuable lessons that can be applied to future leadership roles.”

John Baldoni

Bottom? There’s No Bottom.

Then there’s the harsh reality offered by George Soros, that in the best case is merely the opposite end of optimism. Soros proclaims that the global economic crisis we are immersed in likely has no “bottom”, and therefore no signpost for signaling a return to happy times, and that this crisis is actually more severe than that experienced during the Great Depression, and analogous to the demise of the Soviet Union. He also offers this cheer:

“We witnessed the collapse of the financial system. It was placed on life support, and it’s still on life support. There’s no sign that we are anywhere near a bottom.”

George Soros

Collapse 2.0

Soros went there, drawing a connection between our situation and the demise of the Soviet Union. In a massively interesting presentation from way back in 2006, “Closing The Collapse Gap”, Dmitry Orlov tries to make the case that this is so, and recommends that we look to the unwinding of the Soviet Union for insights into the imminent collapse of the United States. Orlov’s perspective on this analogy:

“I anticipate that some people will react rather badly to having their country compared to the USSR. I would like to assure you that the Soviet people would have reacted similarly, had the United States collapsed first. Feelings aside, here are two 20th century superpowers, who wanted more or less the same things – things like technological progress, economic growth, full employment, and world domination – but they disagreed about the methods. And they obtained similar results – each had a good run, intimidated the whole planet, and kept the other scared. Each eventually went bankrupt.”

And this dark insight:

“Economic collapse is about the worst possible time for someone to suffer a nervous breakdown, yet this is what often happens. The people who are most at risk psychologically are successful middle-aged men. When their career is suddenly over, their savings are gone, and their property worthless, much of their sense of self-worth is gone as well. They tend to drink themselves to death and commit suicide in disproportionate numbers. Since they tend to be the most experienced and capable people, this is a staggering loss to society.”

Dmitry Orlov

Nothing like predictions of nervous breakdowns, rampant alcoholism, and mass suicide to instill confidence in us as we face these challenges. Given the range and diversity in opinions regarding the financial crisis I think it would be a safe bet to assume that everyone is both right, and wrong, and that nobody has a clear idea on how exactly to fix this mess. My advice?  Get busy and plan for both the bad and the good.

Thanks to @andrewkorf for pointing me to the Soros and Orlov articles.