By Ellen Foley Special To Channel 3000
The "Big Idea" for 2012 clangs from social media sites and media pundits. We need optimism. We need to go back to the nation of ?Yes, we can!?
This isn?t an ad for Obama. It is, however, a call to retire a well-worn 2011 phrase: ?cautiously optimistic.? We have too many signs in Madison that we may be talking ourselves into a bad 2012 when the future looks bright. Here?s the antidote: Grab your business owner of choice at midnight Dec. 31, give him and her a big wet kiss and tell them it?s time to invest in optimism.
?Suddenly, positive signs abound,? a Wisconsin State Journal headline trumpeted on Dec. 22. The next day, its business page announced ?Unemployment figures signal further recovery.?
Yet, earlier in December, the annual First Business Bank Economic Forum released some disturbing news. About 30 percent of Dane County businesses predict they will perform worse in 2012 than in 2011. This represents even less optimism than in 2011. That phrase ?cautiously optimistic? kept being repeated throughout the presentation. (In full disclosure, this event was covered by Channel 3000 although that?s not why I attended and not why I am writing this column.) The report was conducted by the A.C. Nielsen Center for Marketing Research at the University of Wisconsin-Madison School of Business and chartered by First Business Bank, with its Madison HQ just off Mineral Point Road at Research Park.
Business leaders are apparently glum because they didn?t meet their expectations in the face of the economic surprises of 2011. However, most of the indicators that the forum has studied for the past nine years are steady or showed increases.
Huzza! Let?s hear some exuberant optimism here, Dane County! Sales revenues increased in 2011, according to the study. Capital expenditures went up to 2007 pre-recession levels, leaders reported. Businesses acknowledged a significant decline in the number of firms reducing employee headcount. Profits were steady. While hiring is not rampant, more employers hired in 2011 than in 2010, and almost half of the companies reported higher wages.
"There were a number of positive economic indicators this year, with sales revenue being the most significant," Scott Converse, of the Wisconsin School of Business, said in a press release. "However, the numbers still aren't at pre-recession values, and I think that's why many firms are projecting 2012 less favorably."
"Foley At Large" is not recommending that Dane County businesses take huge risks in this kind of environment. Good self-talk, however, is cheap. Let?s take the bargain.
Daniel Kahneman, a psychology professor who won the Nobel Prize for work that became the underpinnings of behavioral economics, warned us all in a recent New York Times article that as investors we need to be prudent and take the long view. His colleague, Meir Statman of Santa Clara University, agreed:
?Fear makes us think the world is coming to an end; it makes us think that stocks will never go up and always go down.? Statman told the New York Times. ?This is where logic is going to have to intrude.?
I say we choose logic --- and the First Business Bank report?s metrics --- and push optimism in Dane County.
We are likely going to have a tumultuous political season with a possible recall of our governor and lieutenant governor, and a mean national election. Let?s toast our business leaders Dec. 31 and encourage them to continue in 2012 the great work they did in 2011. Their optimism and success will give us equilibrium as the New Year progresses. They can bring home the Big Idea of 2012.
If for no other reason, let?s be optimistic for our younger generation, which Nobel laureate Kahneman worries will be fundamentally tattered by the economic troubles of the past three years.
The younger tribe isn?t all down in the mouth. Take some hope from The Change Blog on Facebook. It hosts a poster that says, ?I Can and I Will.? Let?s hope we do.