By Stan Mitchell
Jan. 15, 2009
The first full week of January may go down as our own local Day of Infamy, or Pearl Harbor for those rusty on their history.
The Knoxville area experienced major job loss after major job loss. Just as we reeled from one, another was announced. And just like Pearl Harbor, even those “in the know,” who knew such job losses could occur, found the severity and surprise of them shocking.
There were roughly 600 at Goody's corporate office. There were nearly 300 at Sea Ray at the Forks of the River. There was the surprise announcement that Knoxville-based ImagePoint was laying off 450. And then Alcoa further wrecked what mental courage we had left when it announced that it was releasing 450 employees, too.
Just like that. Nearly 2,000 jobs in the Knoxville market. And these were great jobs – not necessarily easy or fun ones, but good ones with benefits and stability.
I assure you that as a small business owner – a very small one – this isn’t the kind of news that helps me sleep at night. But just like you, I am forced to daily confront my fears and keep moving.
It’s what they say in the Marine Corps. Keep moving.
Don’t stop and think too much. Don’t look at your buddy who’s been hit. Keep moving.
And so I kept moving. And I looked to sources of inspiration – leaders – whom I follow. And while this has been a difficult assignment, I’m going to do my best to give you just a glimmer of hope; hope I’ve in part stolen from them in various forms of media they’ve appeared in (mostly financial and business-type magazines). This may just be a glimmer of hope. Just a glimmer of optimism, and you may be able to knock it aside or refute it.
But while you do that, I’m going to keep moving. It’s pretty dang hard to find anything remotely similar to optimism right now, and I’m going to give you what I’ve been able to find.
It comes from people who are above my level. Millionaires. Billionaires. And you can take it or leave it, but if you leave it and want to write me, don’t expect much response.
Before I get to my case for optimism, always remember to consider who’s telling you whatever you’re hearing. Are they going places, or just as broke as the next person? Are they actually saying something? Or, just repeating the latest drivel they’ve picked up, and which you already know.
It’s not easy to be an optimist right now. It’s not easy to tell folks it’s going to be okay, when you know lots more pain is going to occur. Possibly, even to you.
But that’s what I intend to do. You’ve gotten your miles and miles of bad news elsewhere. You’ve heard we’re all doomed and the world is going to end. Here’s, perhaps, a different story you can swallow and believe.
At the top of my list of reasons to be optimistic is this simple fact. For the moment, take yourself out of this recession. Pretend you’re simply not here, reading this and a bit apprehensive about your own future.
Relax for a second and think back to every recession (and depression) before this one. What happened? What followed?
I’ll tell you. They ended. Things improved. Our dark days we’re pushing through right now will end. And that’s a fact. And if you don’t know this, I guarantee you at some point in the future – even if takes two or more years – you’ll know it.
Moving on, I have to ask you for a second to forget for the moment the politics of the actions I’m going to describe – it doesn’t matter for now, it’s done. You can vote your thoughts later.
So, ignoring your own thoughts, think about this. Our Federal Reserve has injected money into the financial system at a rate never seen before. The Fed has also agreed to purchase billions of dollars worth of dubious securities and receivables, and even dispensed practically unlimited amounts of credit at close to zero percent interest to banks and lending institutions. This will speed up our recovery.
Moving along, another bright note is that in just days Obama will take office with an incredible mandate. He’s popular and can expect an early “honeymoon” from both the press and the public. During that time, he’s planning to pass a stimulus package that should help make a dent in our problems. Additionally, he’s shown an ability to inspire that is striking, even if you don’t like or support him – And if you don’t think this is important, think back to how Washington, Lincoln and Churchill managed to convince their constituents that success would eventually be theirs, even when the facts certainly said otherwise.
Moving still further, consider this. Interest rates are as low as they’ve been in years. It’s certainly arguable that right now is the best time there has been to buy a house in the past three to four decades. Rates are low (5 percent or so), selection is high, and prices are absolutely as low as they’ve been for a very long time, even adjusted for inflation. As soon as consumer confidence picks up, and lenders loosen up, our home values will stabilize, and again begin to rise. It will take a while, but mark my words: It will happen.
Picking up our next piece of good news, let’s consider the price of gas. If you don’t think the price of gas matters, think back to the 70s, when there were fuel shortages following OPEC cutting off the valve. Heck, for that matter, just think back a few months ago when gas was four-plus dollars a gallon. These days, it’s a buck fifty. Oil is well under $40 a barrel. Don’t tell me that doesn’t make your day and provide at least some counter to all the doom and gloom – we also now have a massive Strategic Petroleum Reserve, in case OPEC gets cantankerous again.
And finally, perhaps best of all, there’s this point. It’s something no one seems to be saying. Probably because they’re still too scared and close to it. Yet, consider this. We’re learning lessons right now that will serve us for decades if not centuries to come.
People are learning they need to have savings, and less debt. Businesses are learning that same lesson, as well. And our government has learned enough lessons to comprise another column in itself.
It’s shocking to me that for centuries, civilizations and families have known you needed to save some seed crop. You didn’t plant it all.
Crops failed. Famines happened. Neighboring armies invaded.
But in America, with our strong social services in place, and our ocean-protected shores, we’ve gotten fat and soft. Job losses were mitigated by unemployment and other safe guards. Businesses have leveraged themselves with debt heavy enough to sink the Titanic, and still bankers and credit lenders offered more. Our country has run itself like a teenager at times, and yet our oceans have spared us.
We have been so blessed as a country and people that we have forgotten some painful lessons. I’d submit we’re learning them. In spades.
So as you get hit with more bad news in the coming days and weeks, hang in there.
Just like after Pearl Harbor, we face something pretty ugly to look at. It’s an uphill fight, and we’re now painfully aware following last week’s losses that this is going to be ugly, and we may suffer more than we have already.
But I hope you’ll join me in standing up to the challenge before us. There’s a brighter day coming. There will be a day when we can proclaim victory over this, and when those younger than us look up to us for the courage we showed.
A day when the younger wonder why we tell them not to spend so much. To save more. To work harder and not take their job for granted.
These are not the times to hunker down in fear. To listen to the doom sayers. These are the times to keep your eye on the prize and block out the nay-sayers.
You’ve made mistakes. You’ve got more debt than you’d like, and more toys than you can afford. Your job seems less secure than you’d like, or you’re already having to look.
No matter where you are, bear in mind things will improve, even if they get worse in the short-term.
As businesses fall, their competitors will gain strength. As banks feel more comfortable, they will lend more.
And the price for everything – lease rates, construction costs, advertising – will eventually fall to a point that businesses will yet again begin to spend money.
These times are coming. We just have to keep moving.
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Stan Mitchell is the founder and owner of The Oak Ridge Observer. He started the paper in 2004 with a $20,000 loan and writes generally on his blog about business practices, politics and local matters.