Wisdom from The Action Wisdom In Action

Why The 2008 Recession Will Be Deeper and Longer than Currently Expected

My MBA in Finance and years working in, and alongside, the banking industry hardly qualifies me as some economic guru or grand wizard of forecasting. However, my clients expect me to guide them as to business conditions and resulting strategies for attaining and sustaining market leadership. So...every day I am forced to try to make sense of business conditions, in markets across the country.



Now, let me start by saying that I wish I could be an optimist about the overall economy. I would be delighted to be able to join those who make the case for how things will bounce back as soon as a new President is in office. I respect those that want you to believe that much improved policy making will avoid anything like the Great Depression, a view recently widely reported as being espoused by Olivier Blanchard, the respected and very thoughful chief economist of the International Monetary Fund.



Such optimism seems kindly as it has the potential to bolster consumer and executive confidence. But, such optimism really can be quite cruel if people are not adjusting their business and/or personal strategies and tactics to reflect the evidence I see that this is going to be a deeper and longer recession than we all hope it might be.



I don’t know precisely how long the economic downturn will last. But, I do know that people who don’t trim their sails to prosper in a down economy are highly likely to experience a ton of pain.

Seems far better to position oneself to prosper in a tough economy than to keep running one's business and personal affairs as if we were still in the good times.

After all, keep in mind that if you trim your sails for tough times, you can always re-trim when good times eventually come back. And, they will eventually come back. Of that I am sure.



Please, please do not confuse my pessimism about prospects for the overall economy with my staunch belief that companies and people can prosper in tough times. Monetary fortunes have been made in past downturns and will be made in this downturn. And, at least for me, there is more to prosperity than just economic success. There are greater opportunities...than at any time in the last fifty years...for people to make a real difference in the lives of others, by being a beacon of light in these tough times.



Ivan Misner, in his terrific blog – Networking Now, recently captured what I believe to be the essence of the opportunity for those who believe in self-determination.” If you tell yourself, ‘I can’t succeed in this economic downturn,’ you’ll very likely prove yourself correct. But if, instead, you focus on specific solutions to the particular issues, challenges and opportunities of your business, your niche market, your current and prospective customers . . . you are very likely to enjoy more success than all the naysayers put together would have predicted.”



Although I see some people paralyzed by the fear that Misner talks about in his post, I see even more people who are delaying taking prudent steps out of their belief/hope that "this too will soon pass." And, that is why I want to share, over the coming week, six reasons why I believe the 2008 recession will extend well into 2009, and that tough times will last even longer.



My hope is that every reader will, at minimum, accept that some of my reasons have enough merit to suggest that is prudent to adjust strategies and tactics to reflect the likelihood that tough times will be with us for quite awhile. And, to reflect the likelihood that times will get worse before they start to get better.



Up Next: The first of the six reasons; The Hole is Much Deeper Than Currently Acknowledged. Follow this series all week as I lay out one of the six reasons every day.