Extreme Observations

It is no surprise to anyone that the current economic crisis dominates the conversations of everyone. Losing your job or losing half of your wealth merits more than a passing reflection.

But, I am surprised at how frequently people are describing the situation in extreme terms when it comes to the future of our economic system itself.

Over the past 4 weeks, I have talked to more than 200 people about the impact of the so-called "meltdown". At least one-third have made comments like:

• It's the end of the financial system as we know it
• We will see a new era of government-sponsored socialism
• Government is nationalizing industry
• It will all lead to Soviet and Chinese-style central planning
• The middle class will evaporate completely
• By exporting our manufacturing capability, we have lost our ability to create jobs in America
• We will see Weimar Republic-style hyperinflation in 3 years as the government continues to print money with reckless abandon

I have not heard this level of extremism in my 30+ years in business.

What do YOU think? Is this really the end of capitalism as we know it? Or, is it simply a natural readjustment that comes from cyclicality? And, perhaps of greater importance, what should we doing differently about it?

MT