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Tag: financial crisis

10 questions to get ready for moving past the financial crisis

In my rough-and-ready barometer of where we are in dealing with the financial crisis, I note that #occupylsx has got people talking.  That’s great. Instead of mumbling into our beer, we are talking.  That’s a far cry from doing, of course.

Using the denial, anger, bargaining, depression, adjustment cycle, I reckon we are up to bargaining. We still believe we are going to make this go away.

When we do get around to adjusting and getting on with life, we are going to need to be well informed about what we can do and whom we can do it with.  If you intend to be around when we get round to sorting things out, these questions might help disentangle the issues.

What do you feel, and what do others feel about these issues?

#1 Are people in the UK angry?

#2 Are all people in the UK angry to the same degree?  And if not, who is more or less angry and what has led us to that opinion that our levels of anger differ?

#3 Is everyone who is angry, angry about the same things?  And with the same people?

#4 Who is angry with you and how do you feel that some people are angry with you?

#5 Who many people in the UK are of working age? How many people in the UK work in banks and the financial services?  How many people do you know who work in these industries?

#6 How much money does our government need each year to run the schools, the hospitals, the roads, the police, the fire service, the army, the navy, the airforce?

#7 How much money do the banks and financial services kick-in to the cost of running our government?

#8 What are the various things we could “do” to the banks?  Which three seem to be the most popular?

#9  When we “do” these things to the banks, what jobs will be created and which will be lost?  Who will be the winners and losers?

#10 When we “do” these things to the banks, what will be the amount they kick-in to the cost of running the government?  Will that be more or less and if it is less, how can we make up the shortfall?


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See the financial crisis as a chess game with 4 pieces

Since the Northern Rock crash, when was it, 2007? I’ve been using the Kubler Ross Grief Cycle to track where we are in dealing with the financial crisis.

Kubler Ross Grief Cycle and the Financial Crisis

  • Denial took a looooong time. We got Lehman’s  in 2008.  I think people have got it now.  We know we are trouble.
  • Anger started kicking in when? At first we were vaguely angry with Lehmans. Then we muttered when our own incomes were affected.  And possibly we took our anger on targets as various as local corner shop and politicians.
  • Bargaining is next . . . if I do this, then . . . then the problem is going to go away.  A well-educated experienced American knowledge entrepreneur over here in UK looking for backing put the mind-set well.  “Promises were made”.  “The middle-class were promised . . .”  That is what bargaining means. We think we can still make the problem go away and with very little effort at that.
  • Depression should follow in this rough order of psychological states.  We might have thought that Western countries have been depressed for a long time with most people “sleep walking” through life, nursing a hangover and waiting for early retirement.   So I am not looking forward to seeing what that looks like in a more severe form.  At the rate we are going, next year maybe?
  • Adjustment  . .  and eventually we get sick of being depressed so we get out of bed one morning and decide to get on with it.

Being positive in the face of the worst financial crisis

Being an impatient soul, I’ve kept an eye out for simple models that can help people Act, Do, & Get On With It.

On Al Jazeera today, there is a blog by Mohamed A. El-Erian is CEO and co-CIO of PIMCO, and author of When Markets Collide.

El-Erian finishes his article reassuring us that we

need not be paralysed by uncertainty and anxiety. Instead, we can use this simple framework to monitor developments, learn from them, and adapt. Yes, there will still be volatility, unusual strains, and historically odd outcomes. But, remember, a global paradigm shift implies a significant change in opportunities, and not just risks.

A framework for understanding how the financial crisis will unfold

So what is the framework?  El-Erian suggests that each country, or large community, will decide for itself what it will do about four things.  Each community will make a move. Then we will watch  how it goes (and what everyone else does).  And then we will make another move.

We don’t know the outcome of our collective actions in advance but we can think of this as a game of chess with four pieces each (instead of 6) and many many players (not just 2).

The four pieces at each community’s disposal


We have overspent and “borrowed from the future”.  Whatever we cannot pay to the future, the future must write-off as a bad debt.  That’s the stark situation that we are in.

In a large community, we are going to divide up the bad debt between us.  The question is who should pay more and who should pay less.

Countries squabble at home about the formula for dividing up the debt, and the formula is important, but this squabble goes under a separate heading below.

First, the country as a whole must deleverage.  If we don’t take responsibility for our overspending (sins of the fathers visited on the sons etc), then our creditors will take charge of our assets.  This is called getting a bailout from the IMF.  If you have ever seen this in play, you don’t want to go there. Believe me.

Economic growth

OK, we got into debt because we were partying and spending more than we earn.  How are we going to earn more?

Sometimes the problem is structural. It is hard for me to get off my proverbial backside because I am locked into a system.  So what is locking down the energy in a country?  That is the question we ask.

Sadly sometimes, lack of growth is not economic. It is psychological. A tweet went the rounds this morning:  nothing will happen while we hope to become members of the billionaire club.  When the easy life is the focus, we ain’t going to be growing.  If our goal is early retirement – enough said?

So let’s hear from the economists. And while they have their arguments, the rest of us can focus relentlessly on what can be done and work with people who want to work.  And I mean focus relentlessly.  It is so easy to get distracted.

Social justice

Now the biggie.  Social justice has declined in the west. And there we were selling democracy to whoever would buy. So the Occupy movement use as their catch phrase: we are the 99%.

The real issue is still economic.  In my naïve economic take, the issue is how do we accumulate capital and what do we use it for?

When a government makes good free schooling available for a child from year 5 to year 16, we are investing our savings in that child.  And we expect a return. When they are older, not only will they join in sophisticated businesses that already exist, they will invent new businesses and keep the show on the road when we are old and are slowing down.  Education is just capital accumulation one person at a time.

Much of the problem in the west is that money has gone into partying at all levels.   Money accumulates were it isn’t doing the work of capital – by which I mean taking from the present to invest in the future.  We’ve been doing it backwards.  Leaving money doing very little while we borrow from the future to pay for today’s party.

The talk  is presently of who gets what. That is still partying.  We must put our shared capital where it can make a difference.  Education and health are no brainers.  We also have to look at all our assumptions about where we invest and why.  Simply, if you underpay a parent,  you are stripping them of capital. So don’t talk in the next breath talk about investing in early childhood education. You are frankly talking nonsense. Why not create the problem in the first place?  Personally, I’d look at all the laws that help keep workers insufficiently paid.  The simple test is could you run a household on the same income.  Could you?  If not you are running down the capital base of the country.

But the problem seems to be large and the real key seems to be to start to move forward somewhere.  The #occupy movement is people beginning to unravel the mess.  As El-Erain says, watch them. And don’t feel powerless. Make your choices.  Where ever Occupy ends, it is part of this piece on the board: Social Justice.


The fourth piece that we have to play with is leadership.  We complain endlessly about our politicians. El-Erain doesn’t say much in his blog. Maybe he talks about them more in his book.

Personally, is suspect that our leaders are not the piece. It is our attitude to leaders that is the piece.  I believe our leaders reflect us. Maybe when people become more accustomed to being politically active, then we will get better leaders.  OK. You tell me.

So if you are impatient waiting for people to move through the grief cycle, try seeing the world as chequer board with 4 pieces and many many players.  Track the apparent confusion and perhaps we can see what is happening, what is going to happen and what we can help make happen.


Denial, anger, depression, bargaining, adjustment: put the banking crisis behind us

Ladies and gentlemen, where are we are the path of psychological recovery after learning, not only that our country is not only flat broke, but that our prosperity in the last ten years was a house built on sand?






Denial about the banking crisis is over

I believe we are out of denial.  Do you agree?  Not everyone understands the extent of our financial woes, or the rate that they are getting worse, but we have grasped that when we wake up in the morning, the problem will still be with us.

Anger about the banking crisis . . . still with us?

Much of the citizenry is still very angry about the financial crisis.  We are still looking for someone to blame and somebody to hurt back in return for the hurt we have suffered?

Am I right so far?

Depression . . . the politicians are depressed about the crisis?

Politicians, to a man and woman, seem depressed about the crisis.  They are busy having meetings and telephone conference calls.  But by-and-large, they are being busy.  Of course, they are busy. They are ‘shaking the tree’ or in the parlance of a domestic household, looking down the sofa for small change to pay the rent.  That doesn’t put anyone in a good mood.  But their gloom is the result of more than penny-pinching and cash flow management.

Do you think they are acting with a positive sense of the future or just getting-by?

Bargaining  . . . what does bargaining look like?

What does bargaining look like anyway?  I don’t really know.

In other countries and other crises, I have seen people protest a country’s position ‘between a rock and a hard place’ by going on ‘fasts’ (not, hunger strikes, ‘fasts’ or ‘pacts with God’).  The country didn’t move forward very much but the fasters did get very slim and they learned to get up early in the morning.  I can say that for their methods.  Whether their lives improved in other ways, I doubt.  Unsurprisingly, they did very little work.  Their electronic diaries were pristine with the exception of their prayer schedules.

The secular equivalent of keeping one’s head down can be just as dangerous, by-the-way.   It normally involves being very busy doing-the-boss’-bidding while he or she sits out of harm’s way- a bit as Carne Ross described in talk at LSE this week on life as British diplomat.

Does satire play the role of bargaining?  Does laughing about ‘their idiocy’ without taking action not perform the same function of reducing emotional concerns without moving forward?  Resignation rather than adjustment which is really a form of bargaining?  If I laugh, then it will be alright?

Is writing this post a form of bargaining?  I guess it is.  I am being an observer of ‘them’.

Adjustment . . . is it possible?  Can we just adjust and get on with it?

If I don’t really understand bargaining (as much because we think this stage of recovery is a delaying tactic rather than useful), I do know what adjustment is going to mean.

Adjustment is accepting that we were all part of the mess and are all part of the mess.

Adjustment rests on a foundation of “who we are”.  Who are we loyal to?  Who is ‘me and mine’?  Until we really feel solidarity with each other and are willingly to form a new social compact based on that solidarity, then we aren’t going anywhere fast.  We will ‘lurching from church to school’.  I’ve no idea where the expression came from but it conveys the idea.

Our solutions will be in direct proportion to our solidarity.  While we hate each other, our solutions will be correspondingly mean and inadequate.

Getting to adjustment in a country that is in trouble

Getting to ‘adjustment’ when a country is severe trouble is a tough one.  The psychological key is our own good temper, or whatever kernel of good temper that we can find.

When we identify what we believe is good in Britain, when we can point to what is, rather than to what we want to be (usually through someone else’s efforts); until we believe the something is sufficiently good that we are willing to get out of bed to work on it, whether or not anyone else is working on it, we – I mean you, I mean me – are not going anywhere very fast.

The questions, to me, are three fold:

  • What is, right now, is so good that it fills me with awe?
  • What is, right now, that I can bounce out of bed to look after and nurture?
  • What am I willing to do right now, whether or not you support me or not, but which can include you if you want to be included?

Keeping my good temper intact

So here I am writing a post ‘about’ Britain – and in a way about what is wrong with Britain. Here I am apparently procrastinating and avoiding doing some work which has shards of pleasure and the sharp edges of tedium.

Am I being a hypocrite?  Or am I saying that I like to process the news and know what I think and feel?  Am I saying that I like to read between the lines and see the big events that might be affecting us all (the government is looking for small change down the sofa)?  Am I saying that I like to use the heuristics I have gathered over the years to think economically?  Am I saying that I think people like Carne Ross (apostate diplomat) are right?  Change in UK will not start in Whitehall. It will start at street-level with small matters, with whatever we care about executed, not an angry, contested manner (even when that is concealed under do-goodery), but in a respectful, collaborative manner that demonstrates democracy in the minute detail?  Am I saying that I like Web2.0 (blogs etc) because they minimally give me a neat place to store my thoughts and writings and a place where others can read them if they choose?

And having cleared my mind, I can get back to work, because work is like hoovering the carpet – it’s not much fun but the results are pleasant.

And for every moment I spend doing work that matters, I might be building a foundation for future solidarity.  And from there we might find solutions to build a Britain fit for the next 50 years.

So here ends my thoughts on where we are psychologically in making sense of the financial crisis using the well known heuristic of the grief cycle – denial/not us,anger/blame, depression/loss of direction, bargaining/magical thinking, action/affection.  The kernel of your good temper is Britain’s future.


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I don’t believe in charity – I believe in solidarity

Rock Shoes (Good Shoes) by Tatjana Ruegsegger via Flickr

Timely advice as we advance into the eye of the financial crisis

“Fleas dream of buying themselves a dog, and nobodies dream of escaping poverty: that, one magical day, good luck will suddenly rain down on them – will rain down in buckets.

But good luck doesn’t rain down, yesterday, today, tomorrow or ever.

Good luck doesn’t even fall in a fine drizzle, no matter how hard the nobodies summon it, even if their left hand is tickling, or if they begin the new day on their right foot, or start the new year with a change of brooms.

The nobodies: nobody’s children, owners of nothing. The nobodies: the no-ones, the nobodied, running like rabbits, dying through life, screwed every which way. Who are not, but could be.

Who don’t speak languages, but dialects. Who don’t have religions, but superstitions. Who don’t create art, but handicrafts. Who don’t have culture, but folklore. Who are not human beings, but human resources. Who do not have faces, but arms. Who do not have names, but numbers. Who do not appear in the history of the world, but in the crime reports of the local paper.

The nobodies, who are not worth the bullet that kills them.”

Eduardo Hughes Galeano, The Nobodies

“Institutions will try to preserve the problem to which they are the solution”

Clay Shirky

“I don’t believe in charity. I believe in solidarity. Charity is so vertical. It goes from the top to the bottom. Solidarity is horizontal. It respects the other person. I have a lot to learn from other people.”

Eduardo Hughes Galeano

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Tighten your seat belts. Good overview of next installment of the financial crisis

I am optimistic but

attend to the facts

I think we live in oddly optimistic times, but only if we attend to the facts.  Financial facts can be hard to come by and its very difficult to find the whole picture laid out in one place.

The Huff has a summary of the financial crisis in April 2010

  • our total national debt as you and I understand it – what we owe not just what the government owes
  • how much is underpinned by China
  • what China wants done and what IMF is doing RIGHT NOW

The Huff’s general message is tighten your seat belts.  The critical ideas seem to be

  • Debt repayments due in April 2010
  • Chinese/IMF proposal to introduce SDR’s – in short an international reserve currency which allows countries with surpluses to hedge their bets across countries looking for bailouts (us)
  • Where (and to whom) our money has gone (we really should get back what is left)
  • A crisis due in the next month or so (hang on to your seats)
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No light at the end of the financial crisis tunnel?

Where is the end of the tunnel?

At odd times in our lives, someone wise captures our dilemma in a single sentence.  I hope he won’t mind, but almost a decade ago in Zimbabwe, at a time when other people were saying, “It is darkest before the dawn”, the UN Representative said to me, “You feel right now that you are in dark tunnel and you cannot see the light at the end.  But you will see it eventually.”

I think many people in western countries feel this way.  Yet they won’t vocalize their thoughts.  I think keeping nervous thoughts looked away is a mistake.  Our stress levels and we come no closer to a solution.

Getting our thoughts in order

Speaking up, though, often feels negative.  Worse, in competitive masculine societies, which  describes most English-speaking societies, when you describe what is not working for you, you look like a loser.  And losers definitely come last.  People don’t want to hang out with you in case losing rubs off.

Psychologically, though, it is important to express your fears.  If we don’t, they will build up until they govern our lives.  Then we start to make very unwise decisions.  We will find yourself bandying together with people whose only goal is to complain.  Losing does become a way of life.

When we express our fears, we also have an opportunity to list what goes well.  Our objective is not to ignore what goes badly  It is to take stock of what tools we have in our tool kit so we get some leverage on the problem.

My bad day

Let me give you an example. Yesterday, I got pins and needles working at my desk.  To get some circulation going, I went downstairs.   Despite moving very carefully, I put my numb foot down carelessly, fortunately on the last stair, and twisted it badly.  I put out my other arm spontaneously to steady myself and resprained an already sprained-shoulder.  The combined pain made my head spin.  I thought I might faint.

Effectively, my day was finished. I got back to my desk and with visions of a black-and-blue ankle, looked up how to treat a sprain: RICE.  Rest, ice, compression, elevation.  And do it straight away.

Fortunately I had a pack of frozen peas in the freezer.   My day then became a day of trying to keep ice on my foot (I never did figure out how to combine ice, pressure and height), canceling appointments, and trying to work on my lap.

To make matters worse, my project for the day was design.  If there was ever a task that I find fiddly and annoying, its graphics.  It beats tax returns and hoovering by a long margin.  There, even writing that makes me feel better.

I persevered, despite my aches and pains, until close to midnight with triumph, I produced something that was not disgusting but that needs redoing because the proportions are long.

See how long this story of woe is?  I really ended my Wednesday feeling life was dull and unpleasant.  I made myself exercise while I ran a clean up on my computer.  Then at midnight, I made myself fill out a gratitude diary.  What was good to say? Yup, I had stopped my ankle swelling. It ached and it was slightly swollen but it was not a black-and-blue mess.  I had made progress on a task I find very hard.  I had stopped at home and had salads for lunch and supper.

I surprised myself reevaluating my relatively ’empty’ day as better than I thought. But I resisted calling it positive.  That is the point, isn’t it?  I resisted noticing the positive because I was so shocked by the negative.  Sometimes we want to sulk.

Learning from countries in trouble

Getting a grip, I used some magic Anti-Flamme, available only in New Zealand, on both my ankle and shoulder, curled up in a ball which I hoped would tax neither foot nor shoulder.  Then I put on BBC World Service to listen to The Last Resort, a novel about happenings in my birth country, and surprisingly good, though close to the bone.

The author of The Last Resort, is taking the view that it is darkest before the dawn, and for once, a book about Africa is not whincingly sanctimonious.

Listening to the lives of people who are in a very dark place but who go on anyway, reaching out, and trying to be decent in ways they understand,  we should know that sometimes we will not be able to see the light at the end of the tunnel.  But we are still better calling out to others who are there with us, and taking an inventory of what we have for our emotional and physical sustenance.  We don’t know there is a way out.  But if we worry about that instead of coping with the present, we will not get out.  Our salvation is what is around us.

As for Westerners who are burying their fears.  Don’t.  I know a fair bit about national economics.  I make it my business to follow the pundits.  We are up shit-creek.  No doubt about it.  But we also have

  • The buffer of a lot of fat
  • Deep confidence
  • High aspirations

The nuclear deal crafted by Obama is important.  We are working together to make the world safer.  Scientists are making fundamental discoveries almost daily.  We have a new generation coming through.   The internet works so well that it is unremarkable now to interact with people world wide on a daily basis.

In our unspoken discomfort with a financial crisis of our own making, we fall into three traps

  • We leave our own heads in a mess
  • We “diss” the people who are taking the brunt of the crisis – the unemployed, the poor and the dispossessed
  • We miss the opportunities we should be working on

How to survive the dark tunnel of the financial crisis

If you are surrounded by people talking nonsense about darkness and tunnels, then I say accept the reality.  We are in a dark place and we cannot see the end.

And keep a daily gratitude diary to keep your emotional state in balance with reality, to honor who and what bring value to your life, and to remind yourself of what does work.

I can walk on my foot today.  Blast, though, another day of graphics.

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We can afford what we create

The golden rule of economics and politics

It is all that we need to know really.  We can afford what we create.

Our plan of work tells us what we can afford

And from the golden rule ~ we can afford what we create ~ we have two other rules.

It is better to work with others than alone

None of us can create everything we want, or need, to afford.  It matters that we belong to a bigger group or tribe.

The collective to which we belong tells us what we can afford.  Our family, our company, and yes, the country, the sovereign state to which we belong, define what we create and our lifestyle.

When I am writing, someone is creating the electricity that powers this laptop.  While another person is making my washing machine (running in the background), I am looking for easy-to-understand writing on our economy that cuts through the obfuscation delivered by politicians.

The system matters.  Our place in it also matters.  But the whole,  the collective, is what we must keep our eye on.  Where we draw the boundary matters.  Because we can afford what we can create. Who is weBetween us, we create what we can afford.

Draw a circle around who we trust, and who lives and breathes because we live and breathe, and we have defined what we create and what we can afford.

If that circle is too small to define the lifestyle we want,  there is our first task.  Widen the circle. Widen the  magic circle of trust.

We need leaders who instinctively read that circle and work with our neighbors, suppliers and customers to widen our system.

Tell me what you are going to do.  Economics will follow.

The second rule that follows the golden rule is that value comes first.  We can check the economics afterward.

The clear writing economist, Ann Pettifor, makes this point well.

The central bank in each country should set the money supply to match the economic capacity of a country.

She doesn’t like using a household or small company as an example.  So let’s use a giant multinational.

When a giant company needs something done, and they are pretty certain it will work out, they put up the budget and let the managers and workers get on with it.  Money comes first in time.  But profits, and worrying about profits comes last.  Paying back the investors comes last.  We will recover our money provided we only put up the amount of money that the work was worth.

But we will never make money unless we have the money to bring a team together and get going.

The skill in managing, and financing, a major investment is understanding what venture is worth.

Before you tell me that business does not work like that.  It does.  Don’t confuse where you work with successful companies and successful public service.  I’ve consulted to them.  I’ve led in them.

I have two rules:

  • What do you want to do?
  • After you’ve told me, we’ll run the numbers to make sure it is economically viable.  If not, we go back to question 1.  What do you want to do? We begin with the value.  We begin with what you want to create.  Economics follows.  If you want to do it, we will back it.

We can afford what we can create

These are our questions.

What can we create?

Who do we create it with?

What is our potential that we are not using?

To find our potential: ask people.  What do you want to do?  When that is on the table, we’ll run the numbers.  If the numbers hold together, we back their plans.

The golden rule and Britain’s government deficit

Ann Pettifor puts this story in the context of Britain’s government deficit(which is large but not nearly as big as the bank bailouts).  She is standing for parliament but don’t let that dissuade you.  She writes clearly.  That alone is a good reason for electing her.

The collective, Britain, defined by the reach of the Bank of England and the reach of the pound sterling, has potential.   Fund it.  A simple message.  Fund what we can create.

The only question that I ask, and I’ll go to her blog now to ask the question, is how quickly will we recover the money?  I think I would like to see the numbers run by month, quarter and year.  Then I would feel more comfortable.

Then my trust would increase  Then the collective strengthens.

Sometimes economists (and lawyers and accountants) forget that everything they do depends upon us believing it.  Yes, the outer boundary is the reach of the pound sterling.   The real boundary is our belief in each other.  Some people call this belief ‘confidence’ but that is the wrong measure.

Confidence  is self-efficacy.  The correct measures is collective self-efficacy.  The question for that is “Do I believe that you will do better economically this year?” When we answer yes to that question, then we will boom.

But first the question of timing.  I must ask Ann that.

For now I am thankful for finding that quotation.  Simple.  Pithy.  We can afford what we create.

Followed by my two rules.

  • People matter.  Who is we.
  • We’ll check the economics after we have decided what we want to do.

P.S.  I googled “we can afford what we create” and I didn’t find any other reference to it.  Did Ann coin this phrase or is it a well known economic expression?

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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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Are we done ‘bargaining’ about the financial crisis? I wish, but I don’t think so.

Denial, anger, bargaining, depression, action & the financial crisis

This time last year we were definitely in the first of the five stages of grief.  Denial: we couldn’t quite believe that the bankers had blown a hole below our a waterline.

A year later, economists at least, have moved on.

The Governor of the Bank of England said

The sheer scale of support to the banking sector is breathtaking. In the UK, in the form of direct or guaranteed loans and equity investment, it is not far short of a trillion (that is, one thousand billion) pounds, close to two-thirds of the annual output of the entire economy.

To paraphrase a great wartime leader, never in the field of financial endeavour has so much money been owed by so few to so many. And, one might add, so far with little real reform.” (Governor of the Bank of England, in a speech, 20 October, 2009. )

Yes.  One trillion pounds sterling, 66% of the UK’s annual GDP of 1,4 trillion pounds has been put aside to mend the hole, lest it sinks the entire ship of state.

I don’t think the man and woman in the street quite grasps the size of the hole.  If they did, they would have stormed thelife-boats.

Professional economist are beginning to look at alternatives

The economists are beginning to debate seriously though.

Do we cut back hard to pay down our national debt – for which you and I must read – government debt?  Should the government stop spending like we might when we’ve just had an overseas holiday and put too much on the credit card?  Cut out all the luxuries till we have paid off our excesses?

Or do we need Keynesian economics to get out of this?  That is, should we spend money from the center to create a ripple effect?  For example, should the government spends 100 pounds on a new school, who pays the builder who pays the suppliers and who pays their suppliers who pay the supermarkets and who ultimately pays me.  All of us take part and we all pay tax and don’t claim benefits?

Ann Pettifor’s talk on Keynesian economics is 20 pages long.  If you are not an economist, put aside a couple of hours to get through it. It is worth the time.  First, it is clearly written.  You will understand the issues. Second, it is well written. It is nice to know that someone in England can still write a great speech (though she appears to live and work out of the States now).

Where are economists on the grief cycle?

So the economists are beginning to look at the facts.  What stage of grief are they in?  We need to know this so that we have a sense of how long the dilly-dallying will go on.

  • None are really proposing action.  The actions of others, yes, but not their own.  But they are along the track.  I would say the independent economists are around the bargaining stage – if we do this, it will be alright!
  • The Governor of the Bank of England, though admirably witty, seems to be further along around the depression stage. I do hate writing that.  It feels like tempting fate.  It’s relevance is this. It’s important to have a sense of when we will move collectively out of the state of shock and deliberation.  And it is important for younger psychologists reading this to store away a sense of how long community’s take to recover psychologically from extreme shocks so they are better able to lead when shocks happen in the future as they surely will.

We are gathering ourselves for action

We are still waiting for the leaders whose plans are not contingent.  We are still waiting for the leaders who say this is what I am going to do. This is what I am wholly committed to doing ~ so much so that I don’t have to say I am committed.  You see it in my eyes. You see it in my focused attention.  You see it in my invitation to join me.

We have a way to go.


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6 questions that I ask professional career coaches

Where were you the day Lehman’s crashed?

I had spent a long day sequestered in an office building in London. Coming out into the dark evening, I was surprised to see a serious story in the free newspapers handed out at the entrances to the Tubes.

The 158 year old bank, Lehmans had declared bankruptcy and 10 000 financiers, bankers, clerks and support workers who arrived at work on the prestigious Canary Wharf were told they must cease trading and clean out their desks.

Our response to abrupt crisis

Abruptly losing your job and your livelihood is not a disaster but it is certainly a crisis. Some of Lehman’s employees may have taken the first plane out to a sunny beach, but most of them would have sat around the next day wondering what to do. The day after would have been a day of rumination. What went wrong? Could it have been avoided? Who is to blame? And, ultimately, what should they do to retain the same income, status and meaning in life.

Career coaches and people in career crisis

Many career coaches will see erstwhile employees from Lehman’s and may have seen some already.

Proxy career coaches in the form of doctors, bank managers and employment agents will see them sooner. What is the best advice that we can give Lehman employees and all others whose way of life comes to an abrupt, surprising and juddering stop?

What it feels like to be in a career crisis

The first thing we need to remember is being laid off is a rude shock. Having had no preparation for the event,

  • Ex-employees do not know what to do
  • Ex-employees panic
  • Ex-employees want it to be ‘all OK right now!’

Our task as career coach

Ex-employees may have no experience or training in damage control. They may be have no experience in managing their own emotions and attention. This is our task if we are to help them succeed. We must help them to

  • Regain emotional equilibrium
  • See the solution
  • Regain control

What we will achieve as a career coach

We are not, though, going to make it “all OK right now”. Our clients will want us too.

A year ago when Lehman’s crashed, even the pundits thought we might spring back to normal like a new elastic band.  But, for most people, the early teens of the 21st century will be a time of enormous transition. A country with a GDP of 1.4tr cannot dole out 1.0tr without having to make some adjustment.

Yet there is a flip side to a bad situation.  When your house has burnt down so to speak, there is little point in building one that is exactly like the one before. We build a better one.

Our challenge as a career coach

In the early stages, when our clients want everything to be OK, when they are in the first of the five stages of grief – denial – they will not want to work through the long hard slog of rebuilding.  They will want everything to be bounce back. We have to work with them even though they are in no mood to work.

Helping them find any foothold as they work through their grief is important. Listen to them. But also help them keep moving. They have a lot of rebuilding to do and every small step will be important when they emerge from the emotional turmoil further along the line.

The career coaches that we need

Coaches who can do more than say “aha” are needed now. We need coaches who can help people take baby steps while they are overcome with emotion.

6 questions I ask professional career coaches

It is amazing that this is not taught on work psychology degree programmes.  These are the first 6 questions that I ask professional career coaches.

  • How do we work with people overcome by grief?
  • What practical steps can any of us take when our career and life has fallen into an untidy heap?
  • How long does it take to rebuild a career mid-stream?
  • How soon can we introduce the idea of rebuilding a better career to a client overcome by grief?
  • How many people really do rebuild a better career after such a disruption?
  • What distinguishes those who begin that project from those who don’t?
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