Monday, February 23, 2009

Short Term Bad News, Long Term Good News - Applying Davidson's Doctrine

You've been laid off from your job or you have to give up your job to move where your spouse has taken a new position. That's bad news for you and your established career path. You can feel sorry for yourself because of it. You can try to find a new job as similar to your old one as possible (difficult in hard economic times). The third option is to take a personal inventory and possibly go off in an entirely different direction. Losing your job is traumatic to your ego, your wallet, and your family relationships. However, it can be an opportunity to take a new approach that will give you unimagined long term benefits. I know that for many years I felt that I was so busy overcoming the daily hurdles of my job that I didn't take enough time to think about what I wanted out of life. If you have lost your job, you suddenly have that time to think. Set aside your fears (not easy), and think about what you would make you satisfied more than what you had been doing. What skills from your past job or training would you like to use? Who in your business dealings network has a different job that you would like to try? What product or service did you purchase from a vendor that you could make or do better than them? Are you willing to invent a new job by going out on your own? Do you know someone else in a similar situation who would be a great partner in an independent startup effort? Do you have or are you able to get sufficient resources to sustain yourself while you try something new? Davidson's Doctrine as presented in my book, DECISION TIME! Better Decisions for a Better Life should be applied to your situation. Think of a possible new start direction, and assume that you have already decided to pursue it. Think about the necessary steps along that path, and take a few that don't require much effort or cost, such as printing business cards and letterhead. How does it feel to you? If you assume that you've decided on that direction, do you feel comfortable about it? Will you be bothered by what other people think of you for having gone that way? Do you start to see additional costs and difficulties that you hadn't realized would be involved?

You can take these first steps without declaring your new direction as a definite decision. Are you comfortable with it? Does it give you pleasure and/or an acceptable challenge? Does it promise economic or satisfaction rewards? If so, follow up those initial steps with an actual decision to go that way. If you are not comfortable with your assumed direction choice, discard it, and assume that you have decided on an alternate choice that appears promising to you. Take the first few steps and thoughts in that direction, and repeat the process until you have found an assumed career decision that is comfortable to you. It doesn't have to be ideal, just comfortable and satisfying to you. At some time in the future, you can always re-evaluate your outlook using the same approach if your initial direction doesn't turn out to be desirable for you in the long run. The Assumed Decision Process will tend to point you in a desirable direction in a shorter period of time than vacillating among all the possible alternatives or just trying to regain your original career situation in a bad economy.

Thursday, February 19, 2009

Living Within Your Means / Meaning Within Your Lives

One of the lessons we learn during a recession is that we have to identify items in our budgets that we can minimize or do without. Some items that are luxuries are easy candidates for cutting while others that we consider essential are more difficult to cut. The way to approach this process is to assign a priority to every item in your budget and restrict your spending to those items that are higher priority or to the higher priority portion of each qualifying item. During times when there is plenty of money for everything, you may not bother with priorities because there is plenty of money for everything with some left over. If you are smart, you assign priorities in both good times and bad. You may have enough money to buy everything you want, but you should examine your options carefully before you buy more than you need. Another result of bad times is that most of us assign higher priority to those aspects of our lives that define our relationships to each other and to God. Reinhold Neibuhr, in his Interpretation of Christian Ethics, stated that it doesn't matter very much what you believe in when everything is going well, but that you had better prepare yourself to have strong beliefs and meaning in your life when things go wrong, and they will go wrong at some time. Now that we're in that kind of period, it's a good time for intense self-examination.

Tuesday, February 17, 2009

Let the Tail Wag the Dog

I found myself feeling as though I was in the Twilight Zone recently when the government announced that due to the bad economy our international trade deficit for one month was only a record low of 39 billion dollars. Don't look now, folks, but that is pathetic. If we want to get our economic house in order, we should give priority to reducing our international trade deficit and not let it turn out to be whatever happens. The G7 trade ministers are putting pressure on countries not to respond to bad economic times by turning protectionist, i.e. telling their people to buy only their domestic products. They fear that protectionism will reduce the total amount of international trade and lead the world into a downward economic spiral. I have a modified plan to suggest. Let Americans buy anything they want from any country they want, but set a gradually decreasing international trade deficit target, and by law state that the trade deficit cannot exceed the monthly or annual benchmark. Once the difference between imports and exports exceeds that deficit, the only legal way to import more would be to export more. It would help the situation if Americans bought domestic goods, and it would also put pressure on foreign firms and countries to buy U.S. goods if they wanted to be allowed to increase their exports to the U.S.A. It's not protectionism. It's common sense.

Friday, February 13, 2009

Sexual Economics on Valentines Day

On every other day of the year except for February 14th (and a few days anticipating it), women do almost all of the shopping and most of the consumer buying. It all changes in the pre-Valentines Day period when men (in a spirit of self-preservation, if not romance) shop and purchase generously. I predict that we will see an economic pulse upward this week because of men realizing that it is time to buy for the sake of their relationships with women. It is even possible that in this year's tough economic environment some men (and women) will spend more on Valentines Day to add cheer to an otherwise bleak period. I was at the local Costco this morning, and during the first half hour an amazing number of people had already done their shopping and were checking out, 95% of them with at least one bouquet of flowers. We still pursue romance, and we still have optimism. Nurture those qualities well for an economic and spiritual rebound.

Monday, February 9, 2009

The Velocity of Money

The battle is being fought in Washington now about how huge the amount of money we should have in the Stimulus Package in order to get the economy back on the recovery track. Perhaps more important than the amount of money is the character of the projects we are going to tackle with this money. I'm not trying to nit-pick the specific projects; the politicians have already done that, and neither side is completely satisfied. What we have to study is whether we will be funding projects that get the money moving through the system rapidly. If you give me one dollar, and I put it into my savings account, the bank may lend it out in a few weeks to someone who might use the loan to make a down payment on a house a month later. In this example, the single dollar changes hands three times in a couple of months. The economy basically had three dollars pumped into circulation over two months. If, instead, you give me one dollar, and I use it to pay for groceries, and the store uses it to replace the item I bought, and the wholesaler uses it to pay his employee, and the employee uses it to pay for gasoline, and the gas station owner uses it to buy more gasoline to sell, the same dollar changes hands six times in a few days. There are effectively six dollars pumped into circulation in a few days, or potentially, more than one hundred dollars added to the circulation in the same two month period as before. If we want a rapid recovery from our economic malaise, we need to get the new money pumped into the economy in ways that make it circulate from person to person and company to company in a high-velocity fashion. The faster the money circulates, the more quickly we will recover. The problem right now is that people have stopped buying whenever possible. In a bad economy the velocity of money circulation slows to a crawl.