Wednesday, March 20, 2013

The truth about why we're broke.

Preface. I am no economist.

Stated... noted... and now for my 2 cents on why households, businesses, states and countries throughout the world are broke (or heading in that direction). While 9.9/10 people polled would say they prefer the truth, that statistic is probably untrue. People are willing to see the truth when it relates to others. People are reluctant to accept the truth when it relates to themselves. Gore framed it well vis-a-vis an inconvenient truth.

Six truths about why we’re broke.

  1. Leadership : There’s a deficit in great leadership. Great leadership requires genuine interest (passion) AND years of fellowship (skill set & experience). Disagree? Think about AND  list a household, county, state or country that’s flourishing and do diligence around the leadership. You may have to do some real work here because great leaders don’t sell news like crappy leaders. They are too busy & focused on leading others. Don’t get me wrong, there’s no shortage of people who THINK they are great leaders right up to the point they are challenged to show their successorship, legacy & bottom lines - resulting from their leadership decisions.    
  2. EGO : No matter where we go – there we are. Our perceptions of self worth, abilities & importance are normally a) greatly inflated and b) continuously oscillating between nice to have’s & deserve to have’s. Largely, we are wired through exposure, wired early and as much as I’m the eternal optimist, the tiger doesn’t change it’s stripes. The quicksand in all of this is we NEVER think we’re that guy when 9.9/10 times (truthfully), we’re exactly that guy in some way shape or form. Our EGO deceives us into thinking a/b/c will benefit us when in reality it's x/y/z.
  3. Consumerism : We are broke because we are conditioned to spend & buy at a greater rate than we save & sell. Our EGO justifies it, our leadership profits from it. If we can’t afford it, our leadership makes it seem like we can and our EGO’S have our backs. The truth? This mentality is unsustainable without the work part. Real, patient, focused, deliberate, delayed gratification work. Consumerism, makes our problem of not being able to feed our EGO'S someone else's problem which is where the entitlement starts & ecosystem becomes compromised.  
  4. Entitlement : We deserve to be consumers! Again, untrue. But how & why is it we’re led to believe we deserve to be consumers? Because that is what our leadership is telling our EGO'S. Day in and day out, appealing to us at our lowest, most vulnerable and as often as possible. We are inundated (both consciously and unconsciously) with the noise about how great, valuable & deserving we are. Here’s a test for you. Make a list (beyond 10 things) you have done to enrich the lives of others. Feel good? You should. Now go back to that list and cross off all the things that are a part of / result of the job you are paid to do and/or family related. Still above 10? The question is simple; Why do we feel entitled to continuously take from a system we’re not continuously feeding? Tangibly.  
  5. Work Ethic: Related to entitlement & ego let me share a really simple - blunt truth. Business owners are not as impressed with your 1st - 25% raise request @ your 6 month interview while the company’s profits are flat as we are by your 12th - 2% raise request @ year 10 while the companies profits are trending upward. The American dream was not meant to be instagramed. The truth is the American dream was build on the literal backs of hard work. And in an age where technology is replacing entitled labor, the impetus should be harder / smarter work vs. the path to drought laden pasture.
  6. Financial illiteracy : The final truth is that numbers don’t lie. Even when people are cooking the books, that’s the entitlement, EGO & leadership lying to propel the consumerism. The real numbers are a direct reflection of your leadership abilities. Interestingly, we’re taught a lot of things through secondary, post secondary, university & beyond but we are not taught financial literacy. We have to intentionally seek to learn financial literacy. The truth is, I find this strange given the severity of the debt crisis and how many households, businesses, states & countries are broke. Perhaps an opportunity for great leadership to deploy a Khan Academy type financial literacy piece for the masses? No? 

It’s time for the get rich or die trying attitude to give way to a much more consistent, much more realistic and much more truthful practice of economics. Our future is banking on it.

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