Revolution Coaching

Are we there yet?

Today’s article in by Tim Colebatch in The Age (http://business.theage.com.au/business/recession-to-be-long-and-severe-20090416-a8w6.html)  reports that the IMF thinks the current financial crisis is going to be longer and deeper than “normal”.  This comes amid apparent optimism in the share market and voiced by Obama that the downturn could end soon.

So, who’s right? I guess it comes down to who has the loudest voice.

This crisis is almost entirely a state of mind. There is no less cash in the world. The only thing that has changed is the way we value things. Particularly, how those who control the large levers in the economy value things like assets, companies, currency, land, loans, etc.

Listen to the language the economists and journalists use. They talk about “confidence”, “market fears”, “glimmers of hope”, etc. These are all ways of thinking about things. The reality is that the value of something is determined entirely by the way we think about it.

Everyone knows that the value of the stock market rises and falls on the rumour mill. It’s all based on how anyone who wants to buy or sell thinks. The underlying data on a company is rarely factored in to the day to day trading of shares, but even when they are, it’s all a matter of opinion. IN my mind, a company is only “good value” if I think so. The relative value of a bank is determined principally on what  value is placed on its assets by those who want to buy the bank or have an interest in it. The value of a house or land is determined by the price any given person is willing to pay for it. If no one wants to pay the advertised price, then it’s not really worth that much, unless the person who owns it still thinks so, in which case they have effectively “bought” it for that price. It’s all a state of mind.

Why am I pressing this point? Because the work of this depression in terms of its effect on Gen Y is also about how people, especially Gen Y, thinks. I wrote in a previous blog about the need for this depression to have a particular effect. Based on the last time around (1929-33) the young adults and especially the emerging leaders of that day needed the shared experience of the pain of the Depression in order to form the skills that they then used to shape and begin building a new world. Shared experience – it’s about how they thought.

This depression needs to have the same impact on the current generation of foundation-layers (Gen Y). The depression isn’t over until we think it’s over. Obama could be right. So could the IMF. Last time around, the depression began to lift (yes I’m using language similar to that we’d use for a mental state of mind also called Depression) when FD Roosevelt started talking it up. An optimist in nature, Roosevelt literally talked the world out of its depression. Obama could do the same.

BUT, will this current depression have done its job by then for Gen Y? If my reading of Gen Y leadership right now is accurate, I don’t think it has.  There is still more painful insight to be had for them before those vital visionary skills emerge. I hope the IMF is right for now. We need more shared pain, if we are to get the long-term gain.

So, for now, I think the IMF will win the day and we’ll see much more pain. But soon, Obama will have his day. I reckon he will talk us out of it, just like Roosevelt did in the 30’s. Obama’s deep sense of values, understated optimism and hope, and oratorical ability will do the job – just not quite yet.