I am not an economist (thankfully).  But economists, meteorologists (those who try to predict the weather), and psychologists are somewhat in the same situation — our ’sciences’ are not very “hard” — that is, they often are not solidly grounded in data and they lack power to predict.  For example, last night there was no prediction at all of any precipitation and we had a major rain and hailstorm in our area (up to baseball sized hail!).  Part of the problem for all three of these sciences is that there are numerous inter-related factors (many of which are still unknown) that need to be accounted for in trying to predict what will happen.

The point is — no one really has a good handle on the future of the U.S. (and global) economy.  Just turn on the TV or radio and you will hear numerous opinions on what is happening, and what needs to happen to make our economic situation improve.

But let’s take a look at the basics and this will give us some clues.  Economic activity, at its core, is the exchange of goods, services or information for monetary value.  Going back to some basic cause and effect relationships we can follow the following line of thought:

• People work and receive money for their services.
• When people don’t have jobs, they don’t make (as much) money.
• When people don’t have as much money and don’t see the opportunity for more money come in, they either don’t spend as much, or spend on credit.
• At some point, most people, when their income is reduced over a period of time, reach a limit of what they can buy on credit or realize it is not a wise pattern to continue.
• Eventually, people begin to “cut back” on non-essential spending (eating out, recreational activities) and also tend to slow down the process of replacing existing belongings (new technology, new clothes, furniture, cars).
• The lack of spending means businesses are selling less goods and services, receiving less income, and have to cut back expenses in their business, which includes labor.  Hence, they reduce employees’ hours or lay off employees.
• These people now have less money to spend.
• And thus, the negative spiral of an economic downturn continues.

The key question becomes: how does this negative cycle turn around?  This is where economics becomes largely theoretical, and an individual’s answer is related to their beliefs about economic activity and individuals’ behavior.  President Obama and others believe governmental intervention is necessary. Others believe letting the free market forces drive the process.  And obviously, there are combined approaches.

I believe that this is where understanding the psychology of our culture is important.  In actuality, as in economics, there are actually two fairly diverse sets of beliefs that exist is our culture.  And these belief systems drive different expectations and behaviors.

Cultural Belief System #1:

• I deserve “x”.  I have had “x” before, and I still want it. [Note: “x” can be a lot of things — money, a job, health care, free time, retirement benefits, a nice home, etc.]
• If you have “x” and I don’t, you should share at least some of your “x” with me.
• If I don’t have “x”, somebody should do something so that I can have it.
• The problem (of whatever causes me not to have “x”) lies in a greater system of rules, organizations, factors that I don’t have much control over.

Cultural Belief System #2:

• Life is what it is, including bad (or unfair) circumstances.
• Some of my life’s circumstances are directly related to my choices; some circumstances come from factors outside of my control.
• If I want the circumstances in my life to be different, it is largely up to me to figure out how to make that happen. There may be some larger system issues that may need to be changed, but I can’t depend on that happening.
• Making my life’s circumstances better may require me doing things I would prefer not to — work long hours, do work that I don’t enjoy; relocate; be away from my family for a while; live a simpler lifestyle than I am used to.
• I will do what I can to improve my circumstances, knowing there are no guarantees, and hope for the best.

And here we come to a critical factor that can impact a person’s future:  hope.  Psychologists believe that the loss of hope is a key component of depression.  A person can go through a lot of negative circumstances — and become discouraged, worn out or sad.  But when they lose hope that “things will get better”, that is when more serious depression develops.  They give up.

So here is what I predict, as a psychologist.

1. The economic recovery is going to take longer than what most Americans want.  This is due to the economic reality that the ultimate recovery is related to job creation and the resulting economic activity that occurs, and this appears to be a long-term issue.  And secondly, our culture is very present-oriented with little patience.  We want things “now”, and this is unlikely to occur.
2. There will be two groups of people that experience the economic downturn differently:

a)  There will be people who expect life to be “like it used to be”, and expect someone else to make that happen (largely, the government or maybe ‘big business’ or the wealthy.)  These people will become increasingly impatient, angry, and demanding of others.  Their focus will be on economic relief programs and governmental bailouts.

b) There will be a group of individuals who take steps in their lives to make the best of a bad situation, and who will ultimately (some, not all) find opportunities economically — to provide goods, services or information that others need and are willing to pay for.  Their life circumstances will probably be difficult for a period of time but they will “deal with it” and continue on.   There will be a portion of this group who will find significant economic success as a result of their efforts (there are always people who find ways to make money in difficult economic times.)

I think it may be a good time for each of us to ask ourselves:

• What do I believe about what is happening?
• Which group do I want to be a member of?

Recently, the reality of people losing their jobs has been hitting quite close to home.  Living in the city where most aircraft are built in the U.S., and the struggles aircraft manufacturers are experiencing have made knowing individuals who have been laid off from work a personal experience.  And the secondary job losses are significant as well — suppliers to the aircraft manufacturers, graphic designers, retail sales, professionals in the real estate arena — all are experiencing the effects.

I am reticent to personally give advice to individuals who are walking on paths I have not had to walk yet.  However, I did find the following ideas in some recent articles, and thought they might be of some help.

Given the current financial crisis, Psychology Today decided to interview a number of successful professionals and find out the role that “failure” played in their personal and professional development.  Here are a few of the comments and findings:

• There is a difference between failures and Failure, just like the difference that exists between financial diminshment and bankruptcy, and marital strife / divorce.
• Failure hurts but can pay off in the form of learning, growth, and wisdom.  Some psychologists … go even further, arguing that adversity, setbacks, and even trauma actually may be necessary for people to be happy, successful and fulfilled.
• J.K. Rowling, author of the Harry Potter series of books experienced a series of failures including a broken marriage, and poverty that bordered on homelessness.  She states:  “Failure stripped away everything inessential.  It taught me things about myself I could have learned no other way.”
• Paul MacCready, Jr., a famous aeronautical engineer who won the Kremer Prize for the world’s first human-powered airplane, depended on failure to help him succeed.  He designed his airplane to crash well, so that it would protect the pilot and the plane could be quickly repaired, so he could learn quickly from his failures.
• The difference between people who come out of failure successfully and those who do not seems to be related to the degree of ‘rumination’ that is allowed to continue.  “Failing better” is related to three aspects: controlling our emotions, adjusting our thinking, and recalibrating our beliefs about ourselves and what we can do in the world.
• Many argue that failure is necessary for growth.  So protecting ourselves (or our children) from failure limits our exposure to growth opportunities.  Conversely, too much failure can discourage and lead to one’s spirit being crushed — to the point of giving up.  How much failure is too much?  Two really helpful answers (being sarcastic):  “It depends” (on the stage of life and unique characteristics of the individual; and “We don’t really know.”

From a companion article, here are “Nine ways to fail better” by Bruce Grierson.

1. Lighten up — have a sense of humor.
2. Join the club — commiserate with others in similar situations.
3. Feel guilt, not shame — learn from your mistakes,but don’t accept the belief that “I am a failure”.
4. Cultivate optimism — put yor negative thoughts on trial and rebut them; they often are not based in reality.
5. Ask not what the world can do for you . . .  –  you now have the opportunity to do something different with your life.
6. Scale down your expectations for yourself — repeatedly failing to meet your expectations for yourself may indicate you need to re-evaluate realistic expectations for yourself.
7. Keep a journal, learn from what you are thinking and feeling, and use those lessons to take action.
8. Don’t blame yourself — blaming yourself for the bad things that happen to you (i.e. attributing all cause to yourself) is an error in thinking that causes people to become stuck, rather than to become stuck, rather than moving forward.
9. Act! — failure provides an opportunity to do something different, but only if you act on the opportunity.

I hope some of these thoughts may be helpful to you — or forward them to a friend or family member you know who finds themselves in this difficult situation.

Almost all of us in the United States are now starting to personally experience some aspect of the global and national economic crisis.  Whether it is through a personal or family job loss, friends and extended family members who have been laid off, a slow down in your business, or projected reduced sales for next year — the impact is now personal.  This is different than hearing it on the news or reading statistics in a publication.

I resent the frenzy and panic the media seems to want to whip up, because this type of communication doesn’t help anyone.  We need to deal with the realities of life (like Jim Collins encourages businesses to do in Good to Great), but let’s do so in a healthy manner.

So let’s talk about the thought patterns that will help us cope with the challenges and stressors we are (or will be) facing — and how to keep our mental health and hope.

• Shorten your time frame.  Regardless of the challenging issue a family, individual or business faces, one of the key aspects for managing the crisis is to keep a short time frame in mind.  Deal with what you have to today or this week.  Do not spend a lot of time thinking about (or worrying about) six months from now, or next year — largely because there are so many factors that can change between now and then, you really can’t plan that far in advance.
• Manage your cash flow.  Almost every business or family I know that has gone under financially later reports that they wish they would have made changes (e.g. “cut back”) sooner.  So it would be wise to complete an budget review, especially of unnecessary expenses, and make appropriate adjustments — this should probably include projections for income over the coming months, as this might change as well.
• Adjust your expectations.  Life’s circumstances throws us changes.  What was true six months ago for us as a country, in your business, or your family is different now.  Therefore, the goals, desires or plans you had then for the future may not fit now.  Rigidly holding onto beliefs and expectations from the past will probably create undue stress.  What is going on now may not be “fair”, but it is what it is.
• Explore options you have previously ruled out.  Many times we exclude certain options because they aren’t acceptable given the current circumstances.    But when circumstances change, previously unacceptable options may need to be reconsidered (e.g. a teenager being willing to work at part-time at a restaurant; doing tasks yourself and working later in the evening or on weekends).
• Maintain an attitude of appreciation.   We all can probably find something to complain about.  And there are lots of people and decisions who are prime targets for criticism.  But what does that really gain (except for a brief time of tension release)?  So instead of adding to the negative conversations out there, first start with remembering the things that are good in your life — and then add these to conversations.  [We had a beautiful sunrise this morning.  I appreciate having a warm house when it is cold outside.  I am thankful I have reliable transportation to get to work — and that I don’t have to commute 60+ minutes one way.]
• Keep connected socially. When people go through difficult times, one means of coping with the stress is to withdraw socially.  Generally, this is not a good long-term strategy.  Yes, we need time to ourselves and time to think things through.  But to pull back from positive, supportive relationships puts us at risk for becoming isolated, cuts us off from available resources, and we can start to get weird (we need the reality check of conversations with friends to keep our thinking straight).

I appreciate the comments of Jack DeBoer, a local successful businessman who spoke recently and said:  “You can go out and talk to people today and tell them how tough things are, how it’s tougher now, and how much tougher it’s going to get. . . Or you can go out and figure out what to do in this environment.”

I am not a major history buff, but it seems to me that a lot of people survived the Great Depression, and almost always there are opportunities to be successful in difficult times.

Major (repeated) upheaval in the financial markets.  Hurricane Ike.  Flooding across the Midwest.  Concerns about who will be elected President (from both sides). Bombings in Pakistan.  Political turmoil in Bolivia and Venezuela.  The negative, worry-producing news keeps coming.

What’s a person to do?  Ignore it?  Stress out?  Drink more? (I heard a news report that beer and wine sales are up significantly in the last 6 months.)

Previously, I have written about the role of thankfulness and gratitude in helping us live more contentedly. Rather than pontificate on the subject further, I thought I would share the things in my life that I am thankful for — and then encourage you to make your own list.

I love:

Sunny, warm fall days with clear blue skies.  Cool fall evenings with the stars out.   The contrast of the sky blue with the late summer dark green grass and leaves.  Going to high school football games with friends on Friday nights.  The pagentry of college football games on Saturday afternoons with all the colors, sounds of the marching bands, and faint smells in the outdoor air.  Sitting around bonfires with young people and old friends.  Teaching others how to split wood and build a fire.

Fresh, perfectly ripened fruit — blueberries, blackberries, red (and black, when I can get them) raspberries, wonderful golden juicy peaches, slightly tart and crisp apples, sweet juicy grapes, cool watermelon on a hot day, sloppy mangoes (that’s how I am when I eat them), refreshing pineapple, cantalope that freshens your mouth when you eat it at breakfast, zingy pink grapefruit, fresh limes in limeade, there’s probably more.

I also love sounds: Cicadas in the woods.  The rhythmic buzz of grasshoppers, crickets & other insects when walking through a field of prairie. The breaking of waves on the beach.  Rolling thunder in the distance at night.  The wind in the trees (especially cottonwoods and eucalyptus).  The unique swoosh of the wind moving through the needles of pine trees in the mountains.  Children’s laughter when they are playing and running.  Music of all kinds — soothing classical orchestral music, energizing classic rock from the 70’s, foot-tapping quick paced bluegrass, the angelic sound of a women’s choir, the rousing fullness of a strong men’s choir, and the wonder of a talented musician playing a solo on their instrument.

I could go on.  But you get the idea.  Think of your senses — what do you enjoy the feel of? the sound of? the taste of? being able to see? what aromas bring you pleasure?

And while I’m am thinking about it — I am thankful for eyeglasses, for hot showers, for cool refreshing drinks with ice, for clean water, for quality medical treatment, for pain medication, sleeping in a comfortable bed with no bugs, being able to walk and run, for my wife and kids, for my friends.   Life is good.

Now it’s your turn.  What is good in your life?

This week I have been reflecting on the role of optimism and hope in life and business.

(These thoughts aren’t real “deep” or well-developed, but rather some initial musings.)

In the past 10+ years there has been a significant movement within psychology that focuses on the positive side of life (aptly named, positive psychology; see the work by Martin Seligman and others.) This was partly in reaction to psychology and psychiatry’s historical focus on problems — mental illness, psychiatric disorders, dysfunctional relationships, etc. But it was from the realization that a core aspect of many successful people’s lives was their positive view of life. Individuals who achieved higher levels of success in their chosen area often seemed to have a cheerful demeanor, an attitude of “looking forward” to the future (rather than a dour, pessimism) and a “let’s find the silver lining in this dark cloud” mentality and seemed to help them overcome challenges and barriers encountered. See the classic book, Man’s Search for Meaning by Victor Frankl or the movie Life is Beautiful directed by Roberto Benigni, for examples.

Optimism seems rooted in hope. Hope that circumstances will get better. Hope that your toil and sweat will pay off in the long run. Hope that something good will happen today (or tomorrow). Interestingly, hope often must exist in the face of circumstances which do not support it — bad news, pain, being wronged by others, receiving unfair treatment, things breaking, others not keeping their word, seemingly random negative events that keep happening to you.

What is the basis for hope? Some research suggests that some people seem naturally predisposed to having a more optimistic and hopeful view of life (unfortunately, we can’t choose our genetic pool.) Other research and reports from those who have lived through difficult circumstances indicate that keeping focused on the moment enables people to survive and keep going — they focus on today and what they need to do to make it to tomorrow. Within this present-orientation, having loved ones you care about, and a belief that your life is part of a larger purpose in the universe also seem to be related to maintaining an optimistic view while experiencing difficult circumstances.

How does this relate to business life? I think that optimism and hope are core components of perseverance, which we have already identified as being a key predictor of success in one’s profession. Why persevere if there is no hope of things turning out well? (I do think some people persevere just because they are tough-minded, and refuse to give up.)

Interestingly, I think “rest” is an interrelated issue to perseverance, as well. We are more tempted to give up when we are tired (emotionally and physically). Conversely, after a restful weekend, holiday or vacation, we are ready to tackle the problem again. Additionally, social support encourages us to persevere as well — working in teams together, having someone who gives you verbal encouragement to keep going, etc.

And the goal is to succeed — to reach the desired end in mind, whether that is a specific achievement (an “A” in a difficult college course, reaching your sales goal for the quarter, losing two pounds this week, etc.) or having come through a process successfully (making it through the week without losing your temper, treating your customers with integrity, to have played the game to your fullest ability and effort even if you don’t ‘win’).

Obviously, a hidden question becomes: What are my goals and are they really worth pursuing? Many “successful” individuals (in terms of wealth, influence, fame) reach their goals and thus, are “successful”, but realize upon reaching their goals that the goal was hollow, ephemeral, and didn’t bring them the fulfillment they expected.

More questions and issues than answers, but I am left with the questions:

*How can I increase my level of optimism and hope?

*What can I do to keep persevering in spite of obstacles and challenges (and weariness) encountered?

*Are the goals I am pursuing really the goals I want to achieve? (And am I missing the more important goals along the way?)