June 27, 2008
P&G CEO Advises Candidates to Stay Positive
Procter & Gamble’s chairman and chief executive A.G. Lafley wants the future President of the United States, whomever that may turn out to be, to remember that there is a psychological component to economic performance and that it’s important now that Senators John McCain and Barack Obama are running for the nation’s top office that they remember to stay positive about the underlying strength of the American economy.
“You know we are in a business where psychology matters – even in the staples business – and in the economy psychology matters,” Mr. Lafley told the Financial Times. “It could go negative on the economy, that could be a problem … We will talk ourselves into a worse recession.”
Whoever wins the election will find they are facing unique economic challenges, according to Mr. Lafley. “We have never seen the energy cost and commodity cost scope or scale that we have today. There is not a material that we are buying that is not under inflationary pressure and I honestly haven’t seen that before. In the 1970s it was oil and oil derivative materials, now it is agricultural products, it is the full range of minerals and everything is up.”
P&G’s chief is also hopeful that the candidates will not add to the fear mongering around free trade. “I wish there were a little less rhetoric about the evils of trade and especially international commerce,” he said. “I really do believe … that while there are always winners and losers in any transition, by and large the standard of livings have been improving around the world.”
Discussion Questions: How critical is the psychological component to consumer spending? Is a strong retailing environment a by-product of consumer optimism and, conversely, are periods of weak sales created by shopper pessimism?
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This is an interesting story and a remarkable collection of responses. The discussion seems to raise several layers of concern:
1) Should a corporate captain publicly advise political leaders on what they should or should not say?
2) Is attempting to favorably influence public sentiment a valid method for mitigating unfavorable economic developments?
3) Are America’s news media responsible for damaging our economy because they identify current problems and criticize some government policies and actions?
4) Can our candidates bring about favorable momentum for the nation by “thinking positive” about our present challenges?
5) How serious are our present economic challenges anyway? If our underlying economy is strong, why are so many families at risk?
6) Does any leader or prospective leader in America, possess the courage and intellect to define and articulate a genuine vision for a finer, safer, cleaner, more humane, more prosperous nation and world?
As food for thought, I offer the following words by a former American leader, President John Fitzgerald Kennedy:
“We are not afraid to entrust the American people with unpleasant facts, foreign ideas, alien philosophies, and competitive values. For a nation that is afraid to let its people judge the truth and falsehood in an open market is a nation that is afraid of its people.”
Sure, the psychological component is important, but sometimes reality is just reality. Gas IS $4.25 a gallon, home prices ARE dropping rapidly, banks and other institutions DID loan money to people who weren’t qualified for it, the dollar IS in a very weak position relative to other currencies, unemployment IS up, the U.S. HAS done little to wean itself off oil, etc.
Sometimes the first step is to acknowledge the problem. I for one am glad the dreaded media is covering all these issues–otherwise we wouldn’t find out about them until they were even bigger problems. Maybe this year, we’ll all turn off “Dancing with the Stars” and actually listen to the candidates debate what to do about these issues…Nah.
There is no question that when consumers feel that the economy is headed towards a downward spiral, people do start to cut back on their discretionary spending, as well as cutting back on their trial of new products. In that respect, it is important for the American public to remain positive during these difficult economic times, and the more positive the country is, the faster the country will be able to get out of these difficult economic times.
That being said, I’m not sure that we want the CEO of a large CPG manufacturer telling the Presidential candidates what to do. I know P&G is a large, important company, but they should not take themselves so seriously that they should be dictating national policy. Just a thought. It is one thing to know how to sell Pringles, it is another thing to know how to run a country.
There is no question that consumer confidence in the leaders of our country plays an important role in their mindset about the future and the impact on their spending plans. That stated, talk is one thing but actions and results are what consumers want to see to ensure things are moving in the right direction. Consumers are watching energy costs, medical care costs, and now commodities like groceries skyrocket while the investments in their savings plans and their homes dwindle.
Until the leaders of this country address the fundamentals that are driving consumer anxiety, we will continue to see recessionary mindsets on basic spending by US consumers.
I agree wholeheartedly. The bigger issue isn’t the candidates, it is the media.
“If it bleeds it leads” used to refer to blood, now it is anything that bleeds money from our wallets from mortgages, interest rates, oil, food–more often than not, if you will, it is the anticipation of murder. We’ve had recessions before but it hasn’t been covered so intently in so many ways.
If we all turned off the TVs and other media, would any of this be as real or as costly? It may sound naive but P&G is right, economics are at least as much about psychology as fact.
The psychological component to consumer spending is huge, of course. The problem is that there is often a mismatch between consumers’ perceptions of their own situations and prospects (usually good, and improving), and those of the economy as a whole (often bad, and worsening). As a marketer or retailer it thus becomes your job to appeal to consumers on the basis of value, whatever the (perception) of the overall economy. There are different ways of doing this with different consumers.
I couldn’t have phrased it better myself. It’s all about the psychology. What we hear and see everyday affects our actions and our feelings. The new guy needs to start pumping out some good news (that is true of course) to get the U.S. back into a better place psychologically. Iraq and gas prices must be at the top of both candidates agenda to appease and please the masses.
There is no question that consumer mindset contributes greatly to their spending habits and the overall economic health of the country. The president sets the tone of the conversation. No matter what he says or does, the American public, as evidenced in every recent poll, does not trust George Bush, and therefore is not buoyed by his words. Hopefully they will give some latitude to our new president in January. And with that latitude, we all hope that the new president can move to right the economy.
Ever the curmudgeon, I disagree that “consumer sentiment” (whatever that is) is quite as big of a factor that everyone else is suggesting. All of the statements above seem to focus on a single, “average” consumer who is being affected by external factors in a single, stereotypical way. In reality, however, everyone is facing their own constraints, challenges, and opportunities differently. The variability across consumers is huge–of course many are facing hard times, but a surprisingly large number aren’t feeling the pinch (and may be flourishing better than ever). A single index number just doesn’t pick this up.
Consumers are more sensitive to the pain (or joy) that they are genuinely feeling than they are to the statements that the media and politicians are making. Consumers aren’t morons and don’t need to be told what to think/feel.
To me this particular story/issue is largely a tempest in a teapot. I’m not say that macro statements about consumer sentiment are entirely irrelevant, but they’re not excessively important or truly indicative of what’s really happening.
In Economics 101, you learn about how the words and actions of leaders can move markets. Moral suasion, the professors call it. With the economy so large and global, however, there are only a very few people who can say or do something that will impact the economy. The Fed chairman, certainly, and before W checked out of the office about a year ago, the president, are included in this rarefied group. P&G’s CEO is simply reminding the candidates of their power, and rightfully so. Interestingly, in doing so, he has become a change agent in the campaign. His words may now have a certain force in the market, so he too would be wise to chose them carefully.
There’s a difference between optimism and denial. I think the best thing to do for consumer confidence is to acknowledge the very real issues facing the economy and then outline plans for real action that can help move us forward.
We all laugh at the idea that Al Gore could have invented the internet. But I have a distinct memory that he and Bill Clinton talked repeatedly in their 1992 campaign about building an information superhighway. When they took office, they discovered that the internet already existed, and then Tim Berners-Lee and a lot of other pioneers brought forth the web as we know it today.
We were in a recession in the early 90s, and by the end of the decade, we were of course in boom mode, supporting a vast new infrastructure that needed building out from scratch.
Likewise, we could use a few new industries–and a boost to our current infrastructure–to get things out of the starting gates today.
As a country, it seems to be our favorite sport to talk about how many years it will take to develop the hydrogen economy. And it will take forever if we never get started. If we need basic research, that should be a campaign plank; like it or not, basic science has been (until the last seven years) a public/university partnership precisely because it tends not to generate marketable products until much later in the development cycle.
In the shorter term, though, I think we have two urgent priorities that could put a lot of people back to work immediately:
Rebuild the country’s infrastructure–highways and bridges come to mind, but also the water and sewer systems, which in some urban areas haven’t been properly maintained in decades. And, if we’re serious about terrorism, it might be a good idea to secure the water supply. Where I live, we have an open reservoir that just about anyone could walk up to and drop anything into. Finally, we could also build out our rail system, both long-distance and for mass transit in cities, and begin to encourage smart development that reverses sprawl.
And then there’s the internet: the US is something like #15 on the list of industrial nations in broadband access, both in penetration and speed. And we’re falling fast.
What’s worse is that the major providers are showing no interest in improving things. Comcast, for instance, has started to experiment with models like tiered access, where heavy downloaders–defined by as little as 5 gb a month–would pay through the nose for their activity. That move alone would be the end of sites as common as YouTube and TED.com.
And it would certainly hamstring the development of a lot of other rich-media applications: video product reviews and demos, social shopping and video comments on blogs. All as we’ve finally discovered the power of video on our sites to keep visitors engaged, and users have discovered how easy it is to shoot video themselves, right from their phones.
And then there are the areas that can’t get access at any price. Which makes online shopping a bigger pain than driving two hours to the nearest mall. Good for the mall–not so good for the customer, who becomes a captive audience.
Remember the joys of dial-up? It wasn’t so much the speed, for me: it was the act of connecting and disconnecting, and the fact that it often took two or three tries. If I was reading a long article, the service would knock me off. Or I could be in the middle of a shopping-cart transaction and get knocked off. I haven’t tried modern dial-up, so I don’t know if those issues still exist, I’ve gotta believe broadband is still better for our users, wherever they live.
So it would seem to me that the candidates ought to get on board with universal broadband access–a TVA or Rural Electrification Commission for the twenty-first century, with minimum speeds in the 750mbs range.
Both rebuilding the physical infrastructure and building out the internet infrastructure would put a lot of people to work in very short order, at the kinds of income levels that would reboot consumer spending on an order that we’re used to seeing. At a stroke, a good portion of the mortgage crisis could disappear–if only from people snapping up foreclosed properties. And maybe people would learn to save.
Consumers are reacting negatively to the economy around them (even if they have experienced no real downturn themselves) because the structural issues the country faces are so overwhelming. We’re spending $100 million PER DAY on an unpopular war. China and other countries are footing the bill, for now. Oil prices aren’t going down any time soon. Food prices are simply unbelievable. People are hunkering down. And there’s talk of yet another war, with Iran.
When a new President talks about change, consumers will respond. But we’re not going to have any good news until after the election.
There is a term in securities trading called the ‘quadruple witching week’, when four different drivers of the derivatives trading converge within the same week. In a manner of speaking, we are in a ‘quadruple witching year’, where the effects of the economic cycle (usually peaking every 8-10 years), Gas Prices, Housing and the War (this has been an ongoing one but the impact is nevertheless there this year) have converged, and this has to have an impact both on consumer psychology and real fiscal capacity, both consumer and industrial. So I wouldn’t say it’s only psychology, but a bit of psychology and a bit of fundamental economics.
The results need to be adjusted. The poll takers are PR pros, who make their living from psychological factors! I cynically add; a) being tricked into thinking something by the media isn’t a psychological factor; b) there are also real factors and limits; c) there have been fundamental changes in the way fundamental factors are communicated; d) population demographics are seeing a big shift.
I do not believe you can overstate the degree to which perception, politically motivated pronouncements and press releases influence our economy at the margin these days. While we are primarily addressing consumer goods and staples, one only has to look at yesterday’s stock market (which is acting more and more like a consumer product) to see the impact.
The recession drums skipped a beat when Q1 GDP was revised up to 1%. Not great–but an improvement on the original number. Meanwhile, an OPEC spokesman proclaimed the possibility of $170 oil. Of course, he made this statement in the context of six weeks of OPEC saying they don’t understand the price of oil, that it is not supply constrained (but they will increase supply anyway if that helps) and that we are basically “doing this to ourselves.”
So what do we hear? $170 oil–$7 a gallon gas by Labor Day and the market sheds 350 points in an afternoon. Are we driven by sentiment? Is that even a question?
So, what do we do? Lie to the American public and tell them everything is hunky dory? That’s what George Bush and his administration has been doing for eight years and look where it’s gotten us!
And please don’t blame the media. You’re right, if it bleeds it leads. But if it wasn’t bleeding, it wouldn’t be leading. The media didn’t create the sub prime mess. The media didn’t cause the collapse, bailouts and exorbitant golden parachutes on Wall Street. The media didn’t cause this country to give away its steel, textile, technology and manufacturing business. This kind of offshoring–among with some other factors–is turning the U.S. into a service economy.
Let’s put the blame where it belongs–on short sighted business leaders, and politicians who lack the foresight and guts to do anything about our problems.
Never underestimate the power of the psychological component in all things affecting life. Consider how it was effectively utilized by Abraham Lincoln, Winston Churchill, FDR, Ronald Reagan, JFK and Nelson Mandala when leading their countries during difficult times. Arthur Lafley is right on.
Positivity is fine if it is combined with action and honesty. A greater tightening of belts for the US consumer is inevitable.
Public debt is up to 9 trillion and rising each year. How will it be paid back? What if other countries move to price Oil in Euros? Those foreign treasury bonds are not going to be worth much.
Interest rates will rise and consumer confidence will undoubtedly get lower. Equities will continue to contract and the fittest and most flexible will survive.
The upside is the world does not want the USD to tank…does it? How good would that be for trade?
Real viable (non food) alternatives to Oil do exist and this will likely put an end to the rising oil price and make it return to more acceptable levels. Algae is a notable alternative. When will it be available is the question?
This is such an important topic. The crisis of faith in the American economy today is a combination of real issues, perceived issues, and the basic mistrust of our current president and his government’s ability to tell the truth and/or do anything meaningful to make a positive difference.
The new president will have an incredible opportunity to demonstrate trustworthiness and speak with clarity and power of his vision of an improved American economy and place in the world. I am quite optimistic that our new president will lead us to both perceived and actual improvements in our economy and our faith in our individual and collective futures and the place America will have in the world economy.
It is perfectly OK for Lafley to publicly ask our next president to work the psychology of consumer sentiment and build a vision for a better future.
If candidates or CEOs or newspapers or celebrities or dictators or parents or teachers or salespeople or doctors emphasize the positives and don’t appropriately examine the challenges, they lose credibility. To lead, to persuade, to campaign, to communicate, to sell, to inform – folks gotta believe ya. The majority stopped believing LBJ when he lost the war and the same thing’s happened to Bush, except he’s losing two wars.
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This is an interesting story and a remarkable collection of responses. The discussion seems to raise several layers of concern:
1) Should a corporate captain publicly advise political leaders on what they should or should not say?
2) Is attempting to favorably influence public sentiment a valid method for mitigating unfavorable economic developments?
3) Are America’s news media responsible for damaging our economy because they identify current problems and criticize some government policies and actions?
4) Can our candidates bring about favorable momentum for the nation by “thinking positive” about our present challenges?
5) How serious are our present economic challenges anyway? If our underlying economy is strong, why are so many families at risk?
6) Does any leader or prospective leader in America, possess the courage and intellect to define and articulate a genuine vision for a finer, safer, cleaner, more humane, more prosperous nation and world?
As food for thought, I offer the following words by a former American leader, President John Fitzgerald Kennedy:
“We are not afraid to entrust the American people with unpleasant facts, foreign ideas, alien philosophies, and competitive values. For a nation that is afraid to let its people judge the truth and falsehood in an open market is a nation that is afraid of its people.”
Sure, the psychological component is important, but sometimes reality is just reality. Gas IS $4.25 a gallon, home prices ARE dropping rapidly, banks and other institutions DID loan money to people who weren’t qualified for it, the dollar IS in a very weak position relative to other currencies, unemployment IS up, the U.S. HAS done little to wean itself off oil, etc.
Sometimes the first step is to acknowledge the problem. I for one am glad the dreaded media is covering all these issues–otherwise we wouldn’t find out about them until they were even bigger problems. Maybe this year, we’ll all turn off “Dancing with the Stars” and actually listen to the candidates debate what to do about these issues…Nah.
There is no question that when consumers feel that the economy is headed towards a downward spiral, people do start to cut back on their discretionary spending, as well as cutting back on their trial of new products. In that respect, it is important for the American public to remain positive during these difficult economic times, and the more positive the country is, the faster the country will be able to get out of these difficult economic times.
That being said, I’m not sure that we want the CEO of a large CPG manufacturer telling the Presidential candidates what to do. I know P&G is a large, important company, but they should not take themselves so seriously that they should be dictating national policy. Just a thought. It is one thing to know how to sell Pringles, it is another thing to know how to run a country.
There is no question that consumer confidence in the leaders of our country plays an important role in their mindset about the future and the impact on their spending plans. That stated, talk is one thing but actions and results are what consumers want to see to ensure things are moving in the right direction. Consumers are watching energy costs, medical care costs, and now commodities like groceries skyrocket while the investments in their savings plans and their homes dwindle.
Until the leaders of this country address the fundamentals that are driving consumer anxiety, we will continue to see recessionary mindsets on basic spending by US consumers.
I agree wholeheartedly. The bigger issue isn’t the candidates, it is the media.
“If it bleeds it leads” used to refer to blood, now it is anything that bleeds money from our wallets from mortgages, interest rates, oil, food–more often than not, if you will, it is the anticipation of murder. We’ve had recessions before but it hasn’t been covered so intently in so many ways.
If we all turned off the TVs and other media, would any of this be as real or as costly? It may sound naive but P&G is right, economics are at least as much about psychology as fact.
The psychological component to consumer spending is huge, of course. The problem is that there is often a mismatch between consumers’ perceptions of their own situations and prospects (usually good, and improving), and those of the economy as a whole (often bad, and worsening). As a marketer or retailer it thus becomes your job to appeal to consumers on the basis of value, whatever the (perception) of the overall economy. There are different ways of doing this with different consumers.
I couldn’t have phrased it better myself. It’s all about the psychology. What we hear and see everyday affects our actions and our feelings. The new guy needs to start pumping out some good news (that is true of course) to get the U.S. back into a better place psychologically. Iraq and gas prices must be at the top of both candidates agenda to appease and please the masses.
There is no question that consumer mindset contributes greatly to their spending habits and the overall economic health of the country. The president sets the tone of the conversation. No matter what he says or does, the American public, as evidenced in every recent poll, does not trust George Bush, and therefore is not buoyed by his words. Hopefully they will give some latitude to our new president in January. And with that latitude, we all hope that the new president can move to right the economy.
Ever the curmudgeon, I disagree that “consumer sentiment” (whatever that is) is quite as big of a factor that everyone else is suggesting. All of the statements above seem to focus on a single, “average” consumer who is being affected by external factors in a single, stereotypical way. In reality, however, everyone is facing their own constraints, challenges, and opportunities differently. The variability across consumers is huge–of course many are facing hard times, but a surprisingly large number aren’t feeling the pinch (and may be flourishing better than ever). A single index number just doesn’t pick this up.
Consumers are more sensitive to the pain (or joy) that they are genuinely feeling than they are to the statements that the media and politicians are making. Consumers aren’t morons and don’t need to be told what to think/feel.
To me this particular story/issue is largely a tempest in a teapot. I’m not say that macro statements about consumer sentiment are entirely irrelevant, but they’re not excessively important or truly indicative of what’s really happening.
In Economics 101, you learn about how the words and actions of leaders can move markets. Moral suasion, the professors call it. With the economy so large and global, however, there are only a very few people who can say or do something that will impact the economy. The Fed chairman, certainly, and before W checked out of the office about a year ago, the president, are included in this rarefied group. P&G’s CEO is simply reminding the candidates of their power, and rightfully so. Interestingly, in doing so, he has become a change agent in the campaign. His words may now have a certain force in the market, so he too would be wise to chose them carefully.
There’s a difference between optimism and denial. I think the best thing to do for consumer confidence is to acknowledge the very real issues facing the economy and then outline plans for real action that can help move us forward.
We all laugh at the idea that Al Gore could have invented the internet. But I have a distinct memory that he and Bill Clinton talked repeatedly in their 1992 campaign about building an information superhighway. When they took office, they discovered that the internet already existed, and then Tim Berners-Lee and a lot of other pioneers brought forth the web as we know it today.
We were in a recession in the early 90s, and by the end of the decade, we were of course in boom mode, supporting a vast new infrastructure that needed building out from scratch.
Likewise, we could use a few new industries–and a boost to our current infrastructure–to get things out of the starting gates today.
As a country, it seems to be our favorite sport to talk about how many years it will take to develop the hydrogen economy. And it will take forever if we never get started. If we need basic research, that should be a campaign plank; like it or not, basic science has been (until the last seven years) a public/university partnership precisely because it tends not to generate marketable products until much later in the development cycle.
In the shorter term, though, I think we have two urgent priorities that could put a lot of people back to work immediately:
Rebuild the country’s infrastructure–highways and bridges come to mind, but also the water and sewer systems, which in some urban areas haven’t been properly maintained in decades. And, if we’re serious about terrorism, it might be a good idea to secure the water supply. Where I live, we have an open reservoir that just about anyone could walk up to and drop anything into. Finally, we could also build out our rail system, both long-distance and for mass transit in cities, and begin to encourage smart development that reverses sprawl.
And then there’s the internet: the US is something like #15 on the list of industrial nations in broadband access, both in penetration and speed. And we’re falling fast.
What’s worse is that the major providers are showing no interest in improving things. Comcast, for instance, has started to experiment with models like tiered access, where heavy downloaders–defined by as little as 5 gb a month–would pay through the nose for their activity. That move alone would be the end of sites as common as YouTube and TED.com.
And it would certainly hamstring the development of a lot of other rich-media applications: video product reviews and demos, social shopping and video comments on blogs. All as we’ve finally discovered the power of video on our sites to keep visitors engaged, and users have discovered how easy it is to shoot video themselves, right from their phones.
And then there are the areas that can’t get access at any price. Which makes online shopping a bigger pain than driving two hours to the nearest mall. Good for the mall–not so good for the customer, who becomes a captive audience.
Remember the joys of dial-up? It wasn’t so much the speed, for me: it was the act of connecting and disconnecting, and the fact that it often took two or three tries. If I was reading a long article, the service would knock me off. Or I could be in the middle of a shopping-cart transaction and get knocked off. I haven’t tried modern dial-up, so I don’t know if those issues still exist, I’ve gotta believe broadband is still better for our users, wherever they live.
So it would seem to me that the candidates ought to get on board with universal broadband access–a TVA or Rural Electrification Commission for the twenty-first century, with minimum speeds in the 750mbs range.
Both rebuilding the physical infrastructure and building out the internet infrastructure would put a lot of people to work in very short order, at the kinds of income levels that would reboot consumer spending on an order that we’re used to seeing. At a stroke, a good portion of the mortgage crisis could disappear–if only from people snapping up foreclosed properties. And maybe people would learn to save.
Consumers are reacting negatively to the economy around them (even if they have experienced no real downturn themselves) because the structural issues the country faces are so overwhelming. We’re spending $100 million PER DAY on an unpopular war. China and other countries are footing the bill, for now. Oil prices aren’t going down any time soon. Food prices are simply unbelievable. People are hunkering down. And there’s talk of yet another war, with Iran.
When a new President talks about change, consumers will respond. But we’re not going to have any good news until after the election.
There is a term in securities trading called the ‘quadruple witching week’, when four different drivers of the derivatives trading converge within the same week. In a manner of speaking, we are in a ‘quadruple witching year’, where the effects of the economic cycle (usually peaking every 8-10 years), Gas Prices, Housing and the War (this has been an ongoing one but the impact is nevertheless there this year) have converged, and this has to have an impact both on consumer psychology and real fiscal capacity, both consumer and industrial. So I wouldn’t say it’s only psychology, but a bit of psychology and a bit of fundamental economics.
The results need to be adjusted. The poll takers are PR pros, who make their living from psychological factors! I cynically add; a) being tricked into thinking something by the media isn’t a psychological factor; b) there are also real factors and limits; c) there have been fundamental changes in the way fundamental factors are communicated; d) population demographics are seeing a big shift.
I do not believe you can overstate the degree to which perception, politically motivated pronouncements and press releases influence our economy at the margin these days. While we are primarily addressing consumer goods and staples, one only has to look at yesterday’s stock market (which is acting more and more like a consumer product) to see the impact.
The recession drums skipped a beat when Q1 GDP was revised up to 1%. Not great–but an improvement on the original number. Meanwhile, an OPEC spokesman proclaimed the possibility of $170 oil. Of course, he made this statement in the context of six weeks of OPEC saying they don’t understand the price of oil, that it is not supply constrained (but they will increase supply anyway if that helps) and that we are basically “doing this to ourselves.”
So what do we hear? $170 oil–$7 a gallon gas by Labor Day and the market sheds 350 points in an afternoon. Are we driven by sentiment? Is that even a question?
So, what do we do? Lie to the American public and tell them everything is hunky dory? That’s what George Bush and his administration has been doing for eight years and look where it’s gotten us!
And please don’t blame the media. You’re right, if it bleeds it leads. But if it wasn’t bleeding, it wouldn’t be leading. The media didn’t create the sub prime mess. The media didn’t cause the collapse, bailouts and exorbitant golden parachutes on Wall Street. The media didn’t cause this country to give away its steel, textile, technology and manufacturing business. This kind of offshoring–among with some other factors–is turning the U.S. into a service economy.
Let’s put the blame where it belongs–on short sighted business leaders, and politicians who lack the foresight and guts to do anything about our problems.
Never underestimate the power of the psychological component in all things affecting life. Consider how it was effectively utilized by Abraham Lincoln, Winston Churchill, FDR, Ronald Reagan, JFK and Nelson Mandala when leading their countries during difficult times. Arthur Lafley is right on.
Positivity is fine if it is combined with action and honesty. A greater tightening of belts for the US consumer is inevitable.
Public debt is up to 9 trillion and rising each year. How will it be paid back? What if other countries move to price Oil in Euros? Those foreign treasury bonds are not going to be worth much.
Interest rates will rise and consumer confidence will undoubtedly get lower. Equities will continue to contract and the fittest and most flexible will survive.
The upside is the world does not want the USD to tank…does it? How good would that be for trade?
Real viable (non food) alternatives to Oil do exist and this will likely put an end to the rising oil price and make it return to more acceptable levels. Algae is a notable alternative. When will it be available is the question?
This is such an important topic. The crisis of faith in the American economy today is a combination of real issues, perceived issues, and the basic mistrust of our current president and his government’s ability to tell the truth and/or do anything meaningful to make a positive difference.
The new president will have an incredible opportunity to demonstrate trustworthiness and speak with clarity and power of his vision of an improved American economy and place in the world. I am quite optimistic that our new president will lead us to both perceived and actual improvements in our economy and our faith in our individual and collective futures and the place America will have in the world economy.
It is perfectly OK for Lafley to publicly ask our next president to work the psychology of consumer sentiment and build a vision for a better future.
If candidates or CEOs or newspapers or celebrities or dictators or parents or teachers or salespeople or doctors emphasize the positives and don’t appropriately examine the challenges, they lose credibility. To lead, to persuade, to campaign, to communicate, to sell, to inform – folks gotta believe ya. The majority stopped believing LBJ when he lost the war and the same thing’s happened to Bush, except he’s losing two wars.