on Prosperity in Times of Economic Turmoil
By Robert Ross



“We have reached a point in our culture where long-term, difficult economic solutions are not well received; no more tightening the belt, doing without, planting “victory gardens,” as was the case during World War II. We look to the quick fix. Our political leaders see their roles as Santa Clauses with bags full of goodies. In this case the goodies, all of the goodies, are money, dollars hot off the printing press. These dollars are backed by nothing, other than an increasing debt.”
— Reflexions column, The Coming Financial Storm part II, November, 2004

So here we are, well into 2009, with bank failures, the state of California issuing IOU’s, the government taking ownership of General Motors
, along with Fannie Mae and Freddie Mac, and bailouts that dwarf anything seen in the country — ever. As unemployment hovers around 10%, the nation looks to Washington for clues on how to navigate through this crisis.

Rather than tightening its belt, the government is dramatically increasing its spending (and debt) with programs denominated in trillions and billions of dollars. Any business or corporation, or individual following the same bookkeeping standards as the U.S. Government would have had to declare bankruptcy years ago.

The concept of “prosperity” seems out of touch with the reality around us. Yet, there are those who will prosper during these unprecedented times.
Prosperity is: “a successful, flourishing, or thriving condition, especially in financial respects; good fortune,” according to .

Financial prosperity affords you the opportunity to live the type of life that you would like to live. Yes, we all want to have a house overlooking the Pacific Ocean in Hawaii along with our main house somewhere in the Hamptons, but looking at prosperity in terms of how many things you’ve accumulated, misses the point; “successful, flourishing, thriving” is the point. The challenge is to thrive, to flourish, when the economic world around you appears to be falling apart.

“The Times They Are A-Changin’ ” goes the Bob Dylan song. A-Changin’ they most certainly are. Headlines, July 2009: California announces that it has solved its financial crisis! Arnold Schwarzeneggar poses for photos as he signs a budget that purportedly is balanced.
A quick look at the details indicates that California has merely utilized financial gimmickery to solve its fiscal problems. The headlines in the coming months will read: “California asks for bailout monies as it teeters on bankruptcy.”

And so it goes . . . cities, counties, states, banks, school districts, automobile companies and personal households are all facing a new reality, a new paradigm. And, as with all paradigm shifts, there is an attempt to get back to the way things were. I’m here to inform you,
it ain’t gonna happen!

This perfect financial storm has been building for years. We have been, as a nation, living beyond our means — living on credit, producing less and less and taking advantage of having the dollar as the world’s reserve currency. In the last year or so, the chickens have come home to roost. Going forward, we are going to see volatility in all markets. One day the buzz-word will be deflation, the next, it’ll be inflation. One day you’ll hear officials talk about “green shoots” in the economy, the next day, the words “economic depression” will be fashionable.

In a free-market system, during economic contractions, debt and poorly-run companies are purged from the system; they go belly-up, close their doors or perhaps merge with other economically-sound companies. Under our current system, the government is attempting to prop-up bad investments (GM), increasing its own debt in the process. This kind of attempt at fixing the system, will merely cause the financial storm to go on for years.

The question still remains: how does one thrive and flourish in such economic turmoil? The government would like us to get out there and shop. After all, 70% of our GDP is based on shopping. The government would also like us to buy a “new” GM car, using credit of course (increasing our debt load). Prosper by shopping? Prosper by increasing our debt? If you’re confused, you are not alone.

But the answer as to how to navigate through this mess is not so confusing. For starters, look at our government — city, state and national, as an examples of what not to do. As the federal government increases its debt, we, as individuals, need to decrease our personal debt, with the goal of eliminating all debt.

As the government wastes our tax dollars on pork projects and bridges to nowhere, we’ll need to get lean, cutting out frivolous spending. As the government lives way beyond its means, we’ll need to live way within our means.

As government workers watch the clock, with car keys in hand, waiting for their shifts to end, we’ll need to become indispensable to our organizations — getting the job done, in spite of the clock. Our survival — certainly our economic survival — depends on this “game plan;” what they do, we’ll do the opposite.

Difficult times lie ahead, some will prosper and thrive — those who are prepared. The rules are simple: live within your means, stay away from debt, become indispensable to your employer and be prepared for some very difficult and volatile times ahead.
As we move through these uncertain months, perhaps this quote from Mark Twain will put things into perspective: “December is the toughest month of the year. Others are July, January, September, April, November, May, March, June, October, August, and February.”

Our mission, As Spock would say, is to live long and prosper!

Robert Ross can be reached by e-mail at: 
Copyright 2009 by Robert Ross, all rights reserved

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