Mary Goodman
December 18, 2008
Our world has changed. It’s no longer business as usual.
The economic meltdown is rocking our world and will destroy us if we don’t react responsibly.
I believe that “we ain’t seen nothin’ yet!” In 1930, a full year after ‘Black Tuesday’ and the start of the Great Depression, unemployment was at 8.7%. It wasn’t until 1933 that it hit 24.9%. I’m not predicting that is where we are headed, only pointing out that economic waves take time to hit the opposite shore.
Where we can draw a comparison is that the Great Depression happened because people bought into companies with NO UNDERLYING VALUE. The dot-com bust happened because people bought into companies with NO UNDERLYING VALUE. The residential real estate crisis happened because people bought into properties with NOT ENOUGH UNDERLYING VALUE. The mortgage market collapsed as dramatically as the Twin Towers because banks bought and sold mortgages with NO UNDERLYING VALUE. Then investors created Derivatives that seduced investors into buying all of this garbage with NO UNDERLYING VALUE. We are starting to see hedge funds on their knees. It is frightening to think that the Madoff Ponzi scheme may be more an exemplar than an anomaly. What will be next? What trap doors lie ahead?
To make matters worse, our government has injected us with heroin by printing more money. Give the addict more dope and there’s no problem – right? Wrong: You can’t have a strong economy with a weak dollar.
Does anyone really know what happened to the seven hundred billion dollars?
We have become addicted to debt and, like all drugs, the high is immediately gratifying and fundamentally destructive. We have become bloated, fat, complacent and greedy.
It will become worse before getting better – that’s for sure. We are being thrown back into the primordial ocean. Who among us will grow legs and what shape will they take?
Babylon, Mesopotamia, Maya, and the Roman Empire – It’s not hard to see history repeating itself. The stages of civilization are the same. They are:
Stage 1: Cooperation – We depend on each other to survive.
Stage 2: Competition – We depend on each other to challenge us to become better.
Stage 3: Corruption – The end justifies the means.
Stage 4: Collapse – The end really didn’t justify the means.
I think we are seeing the collapse phase. We are being thrown into the evolutionary quagmire, swimming in chaos and crisis. Many businesses will drown in either arrogance or fear.
Even those that survive will be affected. They will crawl out of this weakened and nee help. In the emerging economic ecosystem, we will re-enter the cooperation stage.
It’s survival of the fittest. It always has been and it always will be. With every cycle of adversity, there is opportunity. We evolve by solving problems. We can no longer expect to survive by solving our problems at the expense or disregard of others. Those who will thrive will do so by creating solutions that benefit their stockholders, suppliers, employees, customers, and their communities.
The fittest won’t be the biggest or baddest. They won’t even be the strongest or the stealthiest. They will, simply and humbly, be those companies that offer UNDERLYING VALUE. They will be committed to cooperation, providing value for each of the stakeholder groups.
Giving and receiving is the same: Not giving and taking.
