Feed & Care of the Recession

We're hardscaping the backyard; our neighbor is short-selling. Are we feeding the recession with our own fears?

Whether you think the recent influx of Monopoly money into our economic system is a good thing, or a bad thing, it's ultimate purpose is, at least, understandable.

If you're old enough to remember the 50's, you'll remember that the U.S. was the world's largest creditor - and consumer. We were the Ultimate Consumer Nation. Every other country that had a "middle class" focused citizens' attention on "saving." The U.S., on the other hand, realized that, if people spent lots of money, businesses would have to create products and services to meet their demands, which, in turn, would force businesses to hire more employees, thus generating new income, which would generate new spending - and the wheels of commerce would be slick with the greased palms of the American consumer and his greenbacks.

Because of this philosophy, our country's financial institutions (with the government's blessing) began modifying its lending policies, and began extending massive amounts of credit to businesses and consumers, in order to "feed the economic machine." Now, some may say "How did the government "bless" this philosophy? One simple example: Remember when consumer debt (finance charges and interest payments) was tax deductible? Say no more....

But what happens when individuals, like you and me, decide they need to stop spending? Welcome to a Brave New World.

Today we're the world's largest debtor nation - and our title of the Kings of Consumerism is quickly eroding, as countries like China and India feed an explosively growing middle class. And now, those same financial institutions that foisted this "own today, pay tomorrow" philosophy on us, are now saying, "Sorry, we're not going to lend you money any more."

So the influx of capital is aimed at loosening the death grip our financial institutions have on their assets, so they will, once again, be happy to lend Joe and Jane Middle America enough money to buy that new GM SUV they've been drooling over. And to allow my neighbor to refinance, so the family doesn't have to be uprooted from their home.

Of course, we're all going to have to pay for this down the road. And the end of the road is a lot closer than it was two years ago. Our money is being diluted with this influx of capital (which, if you're not aware, comes from, yes, thin air). But, in the near term, there is a fix. If you and I kiss off the naysayers (read "the mainstream media"), and are willing to become consumers once again, products and services will again have to be provided, businesses will have to ramp up to meet the demand, employment will increase, and our economic engine will, once again, begin chugging forward. Not like it did in the 50's, mind you; but this "recession" will sting far less and for a far shorter time if we once again open our wallets and start passing around a few greenbacks.

Though I wouldn't recommend that new GM SUV. That's what got us in trouble in the first place....

Are We "Linkedin," or actually Isolated?

With access to a vast assortment of New Media clients, including Social Network sites, it's easy to feel like you're connected to the world, while remaining essentially isolated. But those of us who live (and die) by word of mouth and referral know the value of human contact. My business got started because of someone who knew me - and appreciated my work - at my previous employer. He called me when he found I was no longer there. It was my first freelance job, and it started me down a business path centered around developing personal relationships -- a path that continues more than 25 years later.

Without becoming an active member of outside organizations that thrive on face to face, I would have never been able to build the multitude of valuable contacts I now have. Some are clients, some are referral sources, some are mentors, some are information providers, but most importantly, all of them I consider my friends. So, my advice? Keep using the Social Networks, but make sure you spend more of your time "face to face."