As I frequently teach in my Business Mastery System, we must constantly assess the entire situation and do our best to make sense of it, make the appropriate adjustments and improve our outcomes.
The recent economic debacle in the U.S. and around the world, coupled with the recent congressional results reminds me of the arguments I loved to have with my Economics professors at the University of Washington.
What I Learned In School
They were teaching the simple notion of supply and demand and how government policies were used to provide various incentives and disincentives for the public good. I insisted government simply interfered with the natural order of things usually with awful results. I “knew” they were communists and I now know I was a libertarian at heart.
But, in the end it did not matter. I was able to figure out what they wanted as answers on the exams, table my disagreements, and graduate with my Economics degree.
The great lesson for me was not the goofy economics they were promoting, but how to properly assess situations and adjust my behavior accordingly. I realized the real goal is not to understand “why”—I was not going to change it anyway. Rather focus on “what” is happening—I was in a position to change my actions in response.
I didn’t learn as much at school after that, but I did go from being a C student to an A student as a result.
It has been awhile since the promoters of big government controlled all aspects of government—the 1970s. Simply stated the situation then included:
- 70% income taxes
- 20% plus interest rates
- Lots of tax incentives and rebates
- Continuously falling stock prices
Many complained. The companies I was with prospered.
It would be easy, as many will say, to project a repeat of that time. We may be in a rerun of those times, I don’t know.
Here’s what I do know and what I suggest you do.
An Example Of How To Look At The Situation
The government interferes with the natural order of things. It will not be business as usual. It is never business as usual. It is always business conducted in the environment created by the government. We always get a decent lead time about government intentions and we can make adjustments.
Here’s an illustration to consider.
Imagine what you might do if you could buy $100,000 of Google stock at 100% financing. Tempting? Should be, Google has been going up for years and has great prospects. Even better, the term will be 30 years. Like that? Let’s improve the deal by giving you interest only for the first 5 years.
How about that?
Can’t qualify for a loan because you don’t have a job, have no assets, no real income and bad credit? Don’t let that stop you, there is a special program for people like you. What if the stock value falls and you don’t like the deal any more? Just walk away and this deal will simply take the Google stock back.
Of course no real business would offer a deal like that. But, they did (the recent mortgage debacle) and will (lots of “special” government programs are and will be available).
None of us are in a position to do anything to change the current situation on a macro basis. What we all need to do is to understand situations, determine what impact circumstances will have on our businesses and ourselves and make the appropriate changes.
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