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Am I Frightened or Encouraged?

August 16, 2010

Am I Frightened or Encouraged?

That is the question one of my highly enlightened museletter readers asked me after reading my last two editions – one filled with scary news of eminent financial collapse from the Aspen Ideas Festival and the other telling inspiring stories of good guys who give me hope.

Ever since I wrote those two chapters, I have been listening for opinions from some very smart people. I’ll try to give you a feel for what I have heard.

It’s Going to be a Long Slog

One sophisticated hedge fund operator actually called me to beg me to write a more alarming museletter. He said, “I manage money for lots of Christians and I believe they have no idea how bad it is going to be. Investors will be lucky to make 2% a year for the next five years. And most of them are going to get killed in the stock market.” Wow!

Another investment maven I make it a point to talk to each year in Aspen managed to capture almost the same point of view in seven words: “It’s going to be a long slog.” He told me two years ago that we were definitely heading into a new world that would last 25 years. Hmmmmm.

A Nasty Crawl

The best short analysis from one of the smartest people alive, David Brooks of The New York Times (July 29), puts it this way:

“We could be in for a long, slow decade. There’s a confluence of forces that are probably going to retard economic vitality.

“Consumers are still overindebted, and it will take years of curtailed spending before households are back on a sustainable path. Federal and state governments also will have to pull back. Labor markets were ill before the recession and are worse now.

“Our trading partners in Europe and Japan are stagnant or in peril. Banks in this country are not lending to small businesses and banks elsewhere have huge write-downs to endure. The psychological war between business and the Obama administration also is taking a toll. Business types think the administration is stuffed with clueless professors. Some administration officials think corporate honchos are free-market hypocrites prowling for corporate welfare.

“What we have is not just a cycle but a condition. We could look back on the period between 1980 and 2006 as the long boom and the period between 2007 and 2014 or so as the nasty crawl.”

I Refuse to Live in Fear

A North Dakota reader said, “Frightened or encouraged? I am neither one. I refuse to live in fear because the Lord is trustworthy in all conditions. If my trust was in the temporal, I would be scared out of my mind. I am not encouraged about the state of our nation. Economically, socially, and spiritually, we are in terrible shape … I have come to the conclusion that the most important investment for the tough times is in deep, meaningful relationships. If things turn out rosy, we still come out way ahead!!!

Resolutely Encouraged

This response was mirrored by one of the most energetic people I know, Pamela Hawley, a bright young person who is Founder and CEO of Universal Giving, who said, “I can see the fear if I want to. And yet, I am resolutely encouraged. Giving is being pushed down. It is no longer about the 50-year old who has it made and wants to give back. Giving is taking place at the age of 10. College students are using their spring vacation to build homes. Media stations are using their news stations to get people involved. Good people, good things, good partnerships are transpiring. Find them, see them, stoke them, cherish them. And goodness will begin to explode across the world in the most wonderful way. It already is.”

Unwavering faith that we will figure it out and do well

Every year I manage to have dinner with Jim Collins. This time was in Chicago. Collins is the most curious person I know. He and his team of “Chimps” have spent the last seven years doing what he calls “turbulence research.” He has a big book coming out. He said, “We need to understand what separates those who do well from those who don’t do well when the world spins completely out of our control. There is no New Normal. We are now dealing with a world that is going to be ferocious. The volatilities, the turbulence, the uncertainties of the world will probably define the second half of my life.”

But Collins is optimistic and a lot of that has to do with the young generation, a group of people I am still trying to figure out. Collins said this in an article from Inc magazine (April 2009) that I read on my flight back from Chicago:

“A general at West Point told me, “This is the most inspired and inspiring generation to come through West Point since 1945.” I see the same thing with the young people who come to work for me. They have a sense of responsibility and service and a lack of cynicism that is remarkable and wonderful. It’s an ethos, and it’s collective. That’s what’s really powerful. It’s connected technologically. It’s not grandiose, but there is a fundamental assumption of being part of a much larger world and a much larger set of aspirations. The world can be a really awful, brutal, turbulent place. And yet I’m hopeful precisely because of this generation of kids. I really think we ought to just give them the keys as soon as we can. Let them run it.”

The Giving Pledge

I was surprised that several readers – none of them well off – two of them leading nonprofit organizations and one with four kids, expressed a willingness to sign the Gates/Buffett Giving Pledge to give 50% of their net worth to charitable pursuits. Gates and Buffett, of course, define net worth in money terms for their billionaires.

I personally believe the Giving Pledge is applicable to anyone. What they are giving might be whatever is most valuable to them – their money, their time invested to serve others, and frequently their executive skills. Someone needs to pick up the banner on this idea for the rest of us non-billionaire folks. Jim Collins’ favorite Social Entrepreneur of this decade is Wendy Kopp, Teach for America, who began as a student in Princeton. Teach for America had 46,000 applications this past year. Tom Tierney’s Bridgespan (consulting for nonprofits) had 2,500 applications for 25 slots. Tierney and Kopp represent two people with talent and energy who started their enterprises from scratch.

My own conclusion

I would have to join those who say I am both/and. I really believe all the stuff I am hearing about the world being totally unpredictable. Two years ago, we had $50 trillion worth of asset value being supported by $25 trillion worth of debt. Today, according to the calculation of another of my money mavens, we have $25 trillion worth of assets being supported by $25 trillion worth of debt. The country feels like we are deeply committed to becoming European welfare state. But as one other reader said, “The level of energy among leaders like those you described in your second letter is incredibly high. I feel compelled to believe ‘we will get there’ – almost as a matter of faith.”

And finally, in the words of reader from Arizona, “Only because I know where I am going when this earth ends, I am encouraged.” It is probably the only certainty that those of us who know Christ have in a world defined by instability.

So What about You? — Are you encouraged, scared, or both?

3 Comments leave one →
  1. August 17, 2010 10:42 AM

    Hi everyone!

    In terms of what is happening people are panicking because they do not know that what is happening is a normal cycle of history with one exception which I explain below.

    First, the end of the last decade and the beginning of this decade saw the convergence of multiple trends, economic, cultural, social that were on separate tracks that were birthed in the 1910s (Progressive movement), watered during the 1930s (New Deal) and blossomed in the 1960s (Great Society). That is why it seems we have multiple crisis as once. Before they were ignored, but could be kept separate. Not any more.

    Second, going back to 1500 you can see a historical trend where the economic, social and political structure for the new century is birthed in the second decade of the new century while the first decade of the new century is the petering out of the past century. 2000 – 2010 looks like a petering out of the 20th century and this decade is shaping up to birth the new century. These decades have always been turbulent and it appears the same is going to be said for 2010 – 2020 as death and birth are never easy.

    Third, in American history we have undergone fundamental economic transformation three times all almost 70 years apart, 1790s, 1860s, 1930s. First were yeoman farmers versus mercantile capitalism (Jefferson versus Hamilton), second was agriculture capitalism (slavery) versus industrial capitalism (wages), third was small entrepreneurial business versus big business (big won). So, it appears this decade is also seeing this transformation happen again (coming a little late due to all the policies out of Washington, DC, state governments and those who have a vested interest in keeping the status quo propping up the past) What you will see in 2010 – 2020 is the end of big as technology has made big obsolete because big can’t change and respond fast enough. However, the death of big won’t be pretty.

    Therefore, for the first time we are seeing the birth of a century line up with the economic transformation of our country (and maybe the world) which is really adding to the uncertainty. There is no doubt 2010 – 2020 will be one of the most historical decades ever!

    So what do to? First, trust that the Father and Jesus are in control. What will stay the same are the bedrock principles that always remain constant and effective, honesty, integrity, faith, hope, love, charity, etc. To weather this storm an individual has to get back to basics, love God, love others, be personably responsible, etc.

    Anyway, if one knows that all this change and turbulence is expected given historical precedent they can accept what is to come, get on their surf boards and ride the waves secure in Jesus! It is going to be a wild ride!

    Sincerely, Paul Bruno

  2. August 17, 2010 10:56 AM

    As a college professor in one of the areas of the U.S. that is mired in deep, concentrated poverty-I tend to be extremely hopeful. Each day I see bright, articulate, focused, hard-working and entrepreneurial students, most are first generation Americans, almost all are the first in their families to attend college: and they are in my program, planning for careers in the community-benefit sector (formerly nonprofit.) This generation is already making changes in how they communicate, insisting on transparency, demanding authenticity and unwilling to join any “old boys” clubs just to accomplish their goals. They are not the “driven” MBA types of the 90’s, but passionate evangelists for making positive change that will benefit their communities. Jim Collins may point to Wendy Kopp, but I can point to hundreds of young people who don’t have the advantages of Wendy, but who are still driving/creating/growing game-changing organizations right here at ground level.
    Honestly, I am more concerned with the direction of the American church than I am with the American economy.

  3. August 18, 2010 10:47 AM

    I am encouraged. That being said, we need to be cautious. We can be aware, careful, and informed of our situation and circumstances without being fearful. Also, we can be prepared to take action, if needed, when situations and circumstances change, whether for the good or for the bad.

    I have been told that the most frequent command issued in the Bible is “Fear not”. It is stated over 360 times. We would be well advised to heed that command.

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