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Alan M. Webber

Alan M. Webber

Alan Webber, a founding editor of Fast Company magazine, is an award-winning editor, author, and columnist. His most recent book is Rules of Thumb: 52 Truths for Winning at Business Without Losing Yourself.

The Teachable Moment that Wasn't

This is a teach-able moment--and unfortunately, our National Economic Teacher-In-Chief is otherwise occupied. And that's going to become a bigger problem as time goes on.

Goldman Sachs, JPMorgan, and the others making money isn't the problem. In fact, it's a good thing. Remember when they were losing billions? Did anyone think that was a good thing? If you're in favor of an end to the recession, if you want the economy to recover, if you'd like to see hiring pick up and jobs re-appear, please raise your hand.

So what is the problem?

The problem is the announcement of huge earnings on Wall Street was not accompanied by any story--except for the story that Goldman and the others were suddenly back in the business of rewarding themselves with business-as-usual bonuses. Good financial results, bad financial story.

So whose job is it to frame this change in economic fortunes? Certainly the Wall Streeters hold that responsibility: It's their earnings, their bonuses, so they need to get out in front of the news and tell us how they interpret the news, why they think the bonuses are a good idea--or what they intend to do in addition to awarding themselves big bonuses. Just having to tell the story might help them think through their decisions, the same way the auto chiefs might have acted differently if they'd thought about flying down to DC in their private planes.

But who do we really look to for a way to understand what's going on as the economy recovers? How about the president and his economic team! Because the truth is, nobody in America knows how to interpret what's happening in this next chapter of the uncharted global economic drama we're now witnessing.

What should the recovery look like? Should it come to Main Street before Wall Street? Is that even a reasonable expectation? If the Wall Street firms start make record profits, how will that play in the president's plans for economic reform? Will it change his call for new regulatory measures--and if so, how?

The president has used his bully pulpit to call on executives in all kinds of industries to behave in certain ways: to be good citizens, to accept certain public responsibilities, to recognize the hardships of ordinary Americans. His job, as we navigate through these uncharted economic waters, is to provide a running commentary.

He needs to tell us where we are, whether what we're experiencing is what he and his team expected, how it fits into the context of a larger story of economic recovery and financial reconstruction. But in this case, the silence from the White House and the larger economic team was deafening. Too busy with health care reform? Or too unsure whether to get in front of an angry American public, whose indignation was fanned by faux-populists and outraged Web-based commentators?

I think the recovery is beginning--and the truly sad part of the modestly good news is, we're going to have a recovery that is not only short on jobs, but even shorter on real lessons learned.

By Alan M. Webber

 |  July 21, 2009; 10:54 AM ET
Category:  Economic crisis Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati  
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We are going to build new computer systems in Detroit. So what's the problem now? Dude you're getting a DOSS. The Chinese computers are now all obsolete. The grave is a perfect republic. Socialize the cemeteries and undertakers. We can all have public funerals too.

Posted by: Dermitt | July 30, 2009 8:36 AM
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"So what is the problem?"

Mass ignorance.

I learned in college that "employment is always a lagging indicator in a recession." Translation - people go back to work after the recession is over and perhaps forgotten.

But the only place I see that is in editorial cartoons that try to mock it. It is always something said by the "nut case." That is the best propaganda trick - put forth the best argument of the other side in a matter that makes it seems stupid.

But why do so many people worry about employment when all the other numbers are better? What reason do they have to "talk down the economy?"

Or do they express profound personal beliefs? I hope not.

Can't never could.

Not even from the "Can Not" News network.

Posted by: GaryEMasters | July 27, 2009 10:45 AM
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Mr. Webber is one of many American managers who suffer under the delusion that all you need to do is put the right spin on the news, and all will be well. Well, it turns out that you can't run from reality forever. At some point it catches up. The game the Federal Reserve has been playing for many years, in collusion with the likes of Goldman Sachs and their ilk, was to pump up the money supply - to borrow ourselves out of our debt - is going to run out. The markets won't buy it. This recession is far from over.

Posted by: LeszX | July 27, 2009 10:14 AM
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First, Obama and Summers and Romer and Bernstein and Orszag and Goolsby and oh yes, Biden HAVE NO IDEA where the economy is headed, other than business cycles are business cycles, and a rebound is going to happen whether we had "stimulus" or not.

We are in the beginning stages of the rebound. BUT, at least this vaunted team of superbrains learned from their ridiculous prediction that unemployment would not go above 8% that making predictions on the economy is fine when you are in the private sector and yakking away on CNBC, but very dangerous when you are in the government.

People expect you to be right. And there are consequences for being wrong. "Read my lips."

The next big spin machine product you'll see is when the mid year budget update is issued, and the deficts become even scarier than had been predicted.

Posted by: Curmudgeon10 | July 26, 2009 4:24 PM
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I am pretty sure that all of CA's 11.6% unemployed losts their jobs in the last 6 months. I am also sure that if Obama fixes Ca's employment problem the other 49 states will be okay with that. Is Ca's governor a republican? Have the Republicans suggested anything other than tax cuts? No, they continue to say that Kennedy and Reagan cut taxes and government revenues increased, so it will work again. Bush cut taxes and left us in a hole, about $1.3 trillion worth. Why didn't the largest tax cut in our histoty keep the ecocomy humming?

On health care, the health care industry has not addressed this problem for 60 years. They make huge profits on the existing system, especially if they can cancel and deny coverage to those who costs the most. After Clinton's attempt was torpedoed, the subject has not been given a serious reform effort. If everyone can see the problem, why didn't the Republican Congress address it for the 6 years they were in control? Do you really believe they want to? Please listen to their solutions now and review how much money they get from the health care industry. Question if there is an apparent connection.

Posted by: concerned13 | July 25, 2009 9:20 AM
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I believe Obama is too busy trying to scare the public into believing the government must take over health care in addition to banks and the auto industry. Once he has jammed socialism down our throats it will be too late for anyone to notice that they ruined the economy in the process of turning us into a socialist state. Sad. As one of California's 11.6% who are unemployed I see no hope for the future - at least not while the Democrats are in charge.

Posted by: conservativegirl

-With all due respect our economy imploded before Obama took office. He's slowing our descent, but for a reversal of course we have to get over the pipe dream that we can stock this country with store clerks and burger builders and expect the economy to hum. Poor people can't buy many things and thanks to our obsession with cheap goods neither can the labor pools who are now making plastic crap world wide. Everybody loses while we pile up the goods waiting to be purchased.

CA has some big problems within. Start there before looking at the Feds.

Posted by: theobserver4 | July 22, 2009 5:29 PM
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You can only teach those who are humble enough to think they need to learn.

Those whom think they know it all or are the "best and brightest" have no need to learn anything and will continue to see themselves as above the rest of us.

They will merely see us as minons to do their bidding and as those from which they can spring board off of.

History has proven this over and over again. They are called the elitists. They rule by placing themselves above the "populist" and they operate by a sparate set of rules and are accountable only to their own choose leader.

Posted by: DianaRay19 | July 21, 2009 4:06 PM
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Its remarkable that a presumption that there are lessons to be learned enters the forum at all. The due bills having been paid to Wall Street by the 'do gooders' for universal cheap housing now resides in the proper hands to be reloaned for the next fiasco. Welcome to universal health care and its political charged money mill global warming. The financing of such wrongheadedness to make a sophmoric argument work at any cost is the only truth you need to apprehend. The government, such as it is, furthers the evidence that it is woefully ingnorant of whats going on and what costs they rack up thinking the public will suck it up indefinately.

Posted by: Zhaosen | July 21, 2009 2:40 PM
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What do say they everytime you fly, in case of an emergency, put your own mask on before assisting others. I wouldn't expect Wall St. to work any differently. As for bonuses, Wall St. is the king of rewarding for performance and rewarding for retention (potential performance). This most recent stumble (or face-plant) changes nothing. As for job cuts, it's all for the bottom line. Cut expenses so that profit can exist, so the stock improves. When enough cash is available, hire back the workers. Not new lessons, not pretty ones, just ones we haven't had to deal with for awhile.

Posted by: scottNV | July 21, 2009 2:34 PM
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"others making money isn't the problem. In fact, it's a good thing. Remember when they were losing billions? "

Mr. Webber confuses money with wealth. There might be two or three trillion actual US greenbacks and coins (specie) in the world: all the rest is what people think things are worth.
As Cecil Adams writes: "If everybody decided to take what they had coming out of their accounts and bury it in the garden, the financial system would collapse, civilization would end, and we'd all go back to being hunter-gatherers. The modern world is made possible by the trust and sheeplike predictability of millions of depositors. (Deposit insurance makes it less of a crapshoot than it once was.)"
(go to http://www.straightdope.com/columns/read/719/how-much-money-is-there for the best brief explanation of the financial "system")

Posted by: princeton67 | July 21, 2009 2:23 PM
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I believe Obama is too busy trying to scare the public into believing the government must take over health care in addition to banks and the auto industry. Once he has jammed socialism down our throats it will be too late for anyone to notice that they ruined the economy in the process of turning us into a socialist state. Sad. As one of California's 11.6% who are unemployed I see no hope for the future - at least not while the Democrats are in charge.

Posted by: conservativegirl | July 21, 2009 2:19 PM
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Congress and Obama are about to cut the legs out from under any new manufacturing in this country with the famous yet idiotic cap and tax policy. What company in their right mind would open a manufacturing plant in the US with such onerous legislation?

Posted by: NO-bama | July 21, 2009 2:15 PM
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Until we get this Green Energy or any other sort of manufacturing policy off the ground we will continue to lose jobs. Companies and Wall St. will resume profits of course, but will they need to hire another 20,000 people to shuffle paper around? Of course NOT.

The idea of a service economy was a pipe dream and if we don't have the middle class to buy things we will continue to implode. The majority of Americans can't support our multinationals with a salary flipping burgers or being a clerk at Wal Mart. So let's get building again so we can resume REAL growth.

Posted by: theobserver4 | July 21, 2009 12:01 PM
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