Have we all gone mad?

Those of us that can will have to re-start our economic engine and rebuild the wealth; but as long as we collectively believe that we are doomed, we will indeed live out a self-fulfilling prophecy…the sooner that we can focus on staking out the next frontier the faster we are going to get out of this.

The other day I learned a new phrase that was not part of my economics professor’s vocabulary: “the cascading economic downward spiral.”

What a profound way to describe our current economic condition. I leave it to your own imagination what exactly the term is trying to describe.

I’m not going to state the obvious, like the sense that our financial system is “de facto” bankrupt and other frightening information that the media are trying to pound into our brains, without any sense of perspective and any thought of the consequences that proliferating single pieces of negative information will have for the greater good of our nation.

Have we all gone mad? Mr. “Made-off” has, but the rest of us need to pause for a second and listen to our common sense.

Until we get out of the “mass hysteria” mindset that “rien ne va plus” (a French term used at roulette tables, indicating that all betting has to stop) indeed nothing good can come out of it.

Yes, the betting on Wall Street has come to an abrupt halt and maybe that is a good thing. It has robbed all of us of some wealth, because we all believed in it blindly for too long. Nouriel Roubini (Professor at the Sterns Business School) observed the following: “We were all involved in this. Households, companies, banks and the state are all overleveraged, meaning that we accumulated too much debt relative to the real value of the assets and our ability to repay.”

I think he has a point.

We live in a very interconnected world and the world economies are more interdependent than our foreign trade partners would like to concede. Our society seems more interwoven now than we were aware of before, because we can on a daily basis observe and feel the domino effect that the banking systems, the decline in real estate values and rising unemployment rates have on all of us.

This sudden downturn in the economy has caught many of us unprepared and has unfolded in such a rapid tempo that we had no reason to expect. Despite that and regardless of how bitter the taste of it may be, we have to get over it and start focusing on the positive. Now what are we going to do? Those of us that can will have to re-start our economic engine and rebuild the wealth; but as long as we collectively believe that we are doomed, we will indeed live out a self-fulfilling prophecy. In reality the world has not stopped to exist or to function, the demand and desire to live and prosper has not changed and the sooner that we can focus on staking out the next frontier the faster we are going to get out of this.

It is certainly not easy amid the dust that the “cascading spiral” has caused to see clearly what the future might hold. There are two questions to ponder: WHEN will things get better? To that end I only have one answer: The day we start believing in it! HOW will things get better? It is reasonable to assume that we will get back on our feet if (read my March column: Fundamentals matter on www.hiltonheadmonthly.com) and if at that point we can apply a more conservative income-to-debt ratio things will improve. In the meantime it will be a struggle, but acknowledging the problem, develop a positive attitude and come up with a step-by-step plan is a start in the right direction. It is one thing to feel less wealthy and less financially secure, but what I despise the most is that many of us have stopped believing that after the rain the sun will shine again.

How many more times do I have to hear that we live in unprecedented times?

First it is only true for those not old enough to have lived through the Great Depression, World War I and World War II.

Secondly, that is not an excuse for sitting on the sidelines and waiting for better times. Better times only will come once we are willing to create better times.

What we need now is not more commenting on how bad things are.

What I would like to hear is people talking about how they are going to turn things around, how they are going to achieve their piece of the “American Dream,” how they are going to use these difficult times to build a better foundation, a better way, a new way to look at their lives or to build things that will get us further along.

If you believe that your story is inspirational for the rest of us, please send us an e-mail so that we can pass along some good news.

Since we are revamping our whole thinking, we might as well throw out the old adage that “no news is good news” and replace it with the belief that “good news will create good news!” Onward!

CEO Marc Frey, Frey Media
marc@hiltonheadmonthly.com