If nothing else, disasters make for great learning opportunities. Stephen Archer writes an article full of British wit for Consultant-News about ten things we can take away from the scourge of the Great Recession.
Where We’ve Been, Where We’re Going
- The seven-year economic cycle is a dead concept.
- We should embrace and even name recessions.
- Beware the myth of continuous growth.
- Beware economic forecasters.
- We need to understand the new global order.
- Banks need to act sooner to mitigate risk.
- We need to understand why we are doing well.
- We need to look after the next generation.
- Debt is a very bad thing.
- Learning is a very good thing.
Economies are so interconnected now that global issues stemming not just from London or NYC can have unpredictable effects domestically, which means the seven-year model no longer applies. Archer recalls the humorous phrase, “When China sneezes the US catches a cold and the rest of the world feels sniffly.” On the whole, economists did a pretty poor job of predicting the recession or even being able to predict how the recession would proceed. Since it began with banks, Archer believes banks need to do more to insulate the consumer and businesses next time around.
He further says that naming recessions would be a good idea because it means we are acknowledging and talking about economic problems instead of denying their existence. And when things are going well again, resources should be spent to determine why everything is going so well, instead of just when everything is terrible. Recession debt devastated whole countries, not just businesses, so it is important to do as much as we can to prevent such things from happening again. That is why we need to keep learning. Learning is good stuff. You can read Archer’s original article here: http://www.consultant-news.com/article_display.aspx?p=adp&id=11105