Summary
1. Excess Consumption 2. Companies Need to make only what the Public really needs. 3. Govt. Control will keep a limit on Free Markets and that is where the recovery will take place.
Analysis
I believe that the current economic crisis is largely the result of the following factors: Over the last 50 or so years, we Americans have become a society of Excess Consumption. The true American Pastime has become buying things we don’t need. We have confused our wants for our needs. If I live to be 100 years old, I might not need to buy a new shirt! Over the last 10-15 years, the credit markets recognized this desire of us to buy everything we wanted and they further enabled us to buy more, with easy money. It was like giving drugs to an addict. The excess consumption described above drove incredible value inflation in both the stock market and the real estate market and created an economy geared to produce far beyond what our true needs require. Now that the economic bubble has burst, we are faced with business failures and massive job losses, largely caused by us now starting to purchase more for our needs and less for our wants. There will, no doubt, continue to be a lot of pain as our production economy adjusts to the level required of a needs based buying world. I share these thoughts believing that if we really understand some of the major forces at work, we will have a better chance to shape our businesses to succeed over the next 5-10 years.
Remember the Business of the World is Business.
