Over the last few weeks the media has been loaded with what they call “Optimism.” When disected the word really means “not as bad as before.” My favorite quote on the subject is “bad is up from horrible.”
Last week we celebrated Advertising Week in NYC: A time for Optimism if there ever was one. If you have read the Fall catalogs or visited a mid to high end retail store in the last few weeks, you’ve noticed a tremendous shift toward “spiffing up,” even elegance emerging in all departments. This is great news for the consumer and should happen every year or so. The lure of shiny new goodies and never ending ways of making ourselves richer, more beautiful, and more desirable is a powerful undertow.
But the great American, and now worldwide, consumer can’t consume without cash, credit, or both. Does he have it? The “Theys” of this world say there is a great deal of cash sloshing about. Oh? Everyone agrees that credit is scarce and, where it exists, is very expensive. It’s true that the stock market has risen from its lows of a few months ago. But that’s speculation. It’s true that people still buy a ton of lottery tickets. But that’s risk-taking with a capital R. And horse-racing, etc., etc., etc., . . .?
All this circuitous thinking eventually brings us face to face with the fundamental question: What is the basis for the sense of optimism and is it related in any sound way to increases in productivity? Judging by the statistics coming out of the same media broadcasts, one can only repeat, “bad is up from horrible.” Housing prices are still falling but at a slower rate. Unemployment is still rising but at a slower rate. etc., etc. Those stats mean exactly what the words convey; nothing more.
Certainly people are happier and more productive (not staying home from work because of a headache) if they look forward to a bright future. But is the current wave of ”Optimism” just wishful thinking? Will it become another bubble? Is an intangible bubble potentially more dangerous than a tangible one? Houses and mortgages can be bought and sold, at whatever price conditions warrant. The price may give you a headache, but you will eventually pick yourself up and survive.
States of mind are intangible assets, supposdly belonging only to the people who possess them. We’ve all heard of Rainmakers, Con Artists, Ponzi Schemers, Card Sharks, and another long list. What are the assets these fellows buy and sell? Your States of Mind, nothing else. Their so-called tangible assets are as intangible as the wind but as destructive as a hurricane. Before you jump on the Optimism bandwagon, ask for a few relevant FACTS. has your income increased in the last six months? Have you been promoted in your present job? Is your new small business thriving? Is your old one growing? Do you have more cash to spend on the things you want? If you answered “yes” to at least two of the above, fine - be optimistic. If you answered “no” to all of them, beware. Either you are goofing somewhere, or economic conditions are not quite what is peddled.
Don’t let anyone steal your head. It may be your only tangible asset.
