What to watch as we wait for the double-dip recession

Thunder Dolphin Roller Coaster by Freakazoid via FlickrDouble dip recession

The economy has stop plummeting.  I don’t even have to read the figures.  I know because pundits are worrying about a double-dip.

Will something something catastrophic happen that flips the economy down another slide?

People are worried about the amount of money the European governments are taking out of the economy.
People are worried about developers defaulting on commercial buildings.
People are worried about house prices flat lining.
Where will jobs and business opportunities come from?  Economies and jobs grow in a good year at 3%.  And jobs follow businesses?  How long will the recession take to clear?
More, to the point, where will growth happen?   Which sectors should energetic young men and women watch and prepare to join?

Will the double dip recession happen?

Not everyone thinks a double dip recession will happen.  Prieur du Plessis of Seeking Alpha is one and here is his excellent summary.

But in the summary is the very reason why a double dip recession might happen.

Companies are making money hand over fist. And hanging on to it.  Consumers are spending less.  Demand somewhere is dropping.

How did companies make the money?  And why aren’t they reinvesting it in productive activity?

du Plessis believes capital is like a dam.  Fill up the dam with money and it will find a productive activity to invest in.

Maybe.  I’ll watch.

What am I watching as we wait for a double dip recession?

While we wait to see if the weasel goes pop, I am watching the capital stacked up in western companies.

It’s supposed to signal productive activity.   Where will future productivity lie?

That is the question.

3 steps for citizen leadership during the financial crisis

Economic reports for the week

The news of the week is the growing fear of sovereign default in Mediterranean countries and the possibility of a double dip recession.  I spent the morning reading up the economic commentaries and turning them into plain English.  As far as I understand what I read, our way of life is in supreme danger of falling apart.

We cannot afford to carry on the way we are.  We don’t have the money.  And the price of borrowing is likely to go up unless we can show clearly how we will pay back what we want to borrow.

The politicians are in a conundrum.  They want to defend Britain’s triple AAA rating.   And to do that they must achieve two goals.

#1  They must show on paper that we can pay back the money we borrow.

#2 They must show money-lenders that the people are behind them and won’t erupt in open revolt.

We need a plan on paper but it matters naught if we do not stand together. It matters naught if we are each trying to position ourselves to win out during the inevitable decline. The money-lenders are watching us.  Our very division will be our downfall.

Finding the will to stand together

So as ever, the issue is neither financial nor economic.  It is social & political.  How can we find the will to stand together?  How can we keep our heads when others are losing theirs?  How can we develop the collective trust to work out how to get through the next ten years?

Positive psychology in hard times

This is just the kind of problem that positive psychology deals with.

We want to know how the ordinary person, you and me, can exercise personal leadership when we don’t have confidence that formal leaders will exercise the leadership we need.   We want to know how to act sensibily when we really have no idea how things will work out.  We certainly want to act in the common good without being totally irresponsible about our own futures and the futures of our families.

3 steps for citizen leadership during the financial crisis

I’ve tried to distill the advice of positive psychologists into three steps.  What do you think?

#1  Keep our eye on people we respect.  Fill our minds with what does work and not with what doesn’t.

#2  Tell the stories of what does work.  Bring the best of the past with us.

#3  Layout out the things we do understand so that other people can understand the issues.  And help others who do not have the skill to layout knowledge in their area.

Is this the way to live positively in times which seem to call out the negative, conniving and complacent?  Is this the foundation of citizen leadership?

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