November 27, 2012

The Coming Fall and Eventual Rebirth of America
ByFrank Ryan


The hope that many of us had that the nightmare of the Obama presidency would end faded into the night on November 6th. In reality though, "hope" was not very much of a plan.

In the experiences that I have had assisting companies and organizations avoid bankruptcy, there is a very predictable pattern that organizations face when they are dealing with serious financial problems.

The pattern involves economic growth and prosperity followed by overspending. From overspending and excess comes a period of denial that anything must change to solve the problem. From denial comes failure. If the failure is accepted and dealt with growth is restored and the cycle begins again. If failure is not accepted, the organization will cease to exist.

The sheer disappointment and almost melancholy reactions to the Obama reelection made me realize that the American people are no different in their reactions than the employees and managers of the companies that I am attempting to save.

In any plan to resurrect an economy, as Mitt Romney proposed in his five point plan, a majority of people must first come to grips with the reality of the difficulties that they face. While the difficulties may have been obvious to those of us who describe ourselves as fiscal conservatives, the election results convinced me that the American people have not yet reached that same conclusion.

Typically in most bankruptcies, there is a catastrophic event which convinces the vast majority of people that they are really in trouble financially. We apparently are not at that stage yet in the United States.

Equally as problematic for a financial rescue of our economy was that 13 million fewer people voted in 2012 compared to 2008.
The significance of that apparent apathy is that apathy typically precedes a collapse in an economy. Apathy can actually accelerate financial problems because problems are ignored until collapse occurs. In financial turnarounds, the apathy is the "calm before the storm"

The transition from apathy to a cataclysmic event occurs because the disaster is "allowed" to occur thanks to the fact that so many people are apathetic. Problems quite simply are not dealt with.

In the United States, the analogy would be a transition from engagement of our people searching for hope in the 2008 election of Obama to the apathy in the 2012 election.

The false sense of security that all will be well or that things are not as bad as they expected them to be was prevalent in 2012. The preponderance of support Obama had from blacks, single women, and Hispanics may well reflect the paralysis of these groups due to fear of the uncertainty that exists in the economy.

When the apathy and fear reaches a crisis point in the next few years, probably during our next election in 2016, we will deal with the unmitigated disaster of the irresponsible fiscal spending this nation has been engaged in for decades.

Once this cataclysmic event occurs, the transition will begin. After the crisis starts, most people willingly accept the difficult solutions that were unfathomable only months earlier.

In the case of the U. S. economy, the change that will take place will be the recognition that only by accepting personal responsibility and accountability will our economy ever right itself. If personal responsibility is not accepted, collapse of our nation, as we know it, is inevitable.

The process that I describe above is precisely what happened during the collapse of the Soviet Union. I also experienced the same process in Poland, Romania, Bulgaria, Slovenia, and Belarus in the 1990's. Some of these nations have fared well and some have not depending upon the strength of their leaders to solve the problems.

The nations that fared well have had leaders who understood that simple, quick fixes provide only temporary "solutions" and that serious solutions require systemic changes to society.

A restoration of a free enterprise system with the right of self-determination is essential to survive after the collapse. Free enterprise provides the fuel to the economic engine.

The basic framework of free enterprise once existed in United States and it is a principle which our people typically understand and embrace.

In the United States, we have bountiful natural resources. We generally have a well-educated workforce. We have many baby boomers who are preparing to retire which will create job opportunities for the younger generation.

The self-correction will require that we combine these tremendous assets to counter the negative effects of structural problems in our economy such as public-service unions, unfunded pensions, immigration, and other issues that we have pushed off to another day to solve.

In Alan Greenspan's book, The Age of Turbulence he describes the continued volatility of the world's economies in the 20th Century. In virtually every instance, the countries went through a period of growth, then excess, then denial, then failure, and finally some semblance of rebirth.

For us, Gov. Romney was a great candidate but at the wrong time. Unfortunately for the majority of voters, the message of how serious of a predicament we are in was lost to them. We are going into a full stage period of denial. Gov. Romney was just four years too early.
I am very optimistic of the long term for our country, for as happened with our Founding Fathers, we, too, will have a renewal and rebirth of America and the American dream early in the 21st-century.

We are a creative and vibrant people who believe in Life, Liberty and the Pursuit of Happiness. Those three magical ingredients will fuel our rebirth. It is sad, though, that we need a rebirth when death was avoidable.

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