In Franklin D. Roosevelt’s 1933 inaugural speech, he coined the popular phrase “we have nothing to fear but fear itself“. Our nation was in the thick of the Great Depression and unemployment was 25%.
I know that his now popular phrase can be looked at as being rather insensitive and cavalier. I’m going to be very careful in today’s blog not to seem so insensitive.
I definitely understand the fear and the anxieties that I am witnessing by speaking to people as well as through what I am reading on social media. Unlike the Great Depression which was purely an economic threat, today we have both an economic threat as well as a public health crisis happening at the same time. I truly understand the anxieties. But today, I’m going to take a bit of a hiatus from discussing business strategies and hopefully help one or two of you through these anxieties.
As I mentioned in blog #3 , this global recession is different than an ordinary recession and certainly different than what triggered the Great Depression. Today’s recession is deliberate and protocol-driven. We are temporarily shutting down the economy simply to protect ourselves from a deadly virus. During the Great Depression, as well as during the recession of 2008, bank failures were at the heart of the calamity. Also during the Great Depression, the Central Bank actually fueled the problem by using tight monetary policies when they should have been doing the exact opposite, similar to what you are witnessing today. Back then, the Federal Reserve was RAISING interest rates in order to preserve the value of the dollar. That further restricted the availability of money for businesses and bankruptcies spiraled out of control. What you are witnessing the Federal Reserve and Central Bank do today is the complete opposite.
Now, you might be thinking that the complete opposite doesn’t seem to be doing much better than the strategies employed during the Great Depression. On the surface, you would be correct. But the difference between now and then is a generational one and will be the topic of my next blog. I’ll give you a sneak preview of that in just a moment, but first I’m going to discuss another phenomenon that I am witnessing today.
In speaking with people and reading social media, there is a phenomenon that I am noticing that should be discussed. I’m amazed to see how some people continuously post ONLY the negative pieces to the current events. Other people, seem to be just the opposite. They seem to avoid any of the negative news and post only positive things that they stumble upon. I’m not a psychologist but I find this fascinating and can’t help but wonder if these same two groups of people internalize exactly how they post. You see, that’s the key to getting through this... It’s all about what you internalize. It doesn’t matter what you post. You are free to post anything you’d like. But I certainly hope that everyone realizes that a glass is BOTH half full and half empty at the same time. Please make sure that you keep that in mind as you internalize all this. You should not be looking at just the escalating infection rates and how many unfortunate people are succumbing to this virus. In fact, I personally think that data is unfortunately going to get a bit worse before it gets better. Prepare yourself for that. But when you’re seasick, the best advice I can give is to keep your eyes focused on a single fixed point on land. So that metaphorical fixed point right now should be the data that’s emerging from China, where this all started. China is now nearly back to normal. That’s where we will soon be and that leads me to the sneak preview of my next blog....
My next blog is going to discuss the meaning behind yet another phrase that we need to add to our vocabularies... “pent up demand”. It will also help you realize why the current strategies of the Federal Reserve and Central Bank will soon greatly assist in a rapid recovery.
In my opinion, all businesses are soon going to get a hardcore lesson in both micro- and macro-economics as it pertains to the phrase “pent up demand”. We need to be ready for it financially as well as operationally. We are Americans, and as such, we are not accustomed to the current terms of withdrawal and sparsity. After all, most that lived through the Great Depression are no longer with us. We are a different and DEMANDING generation.
Life in China is principally resuming normal activity already. That means that we should hopefully expect less than another few months of this crisis as we know it, and the demand from the American consumer is then going to unwind like a tightly coiled spring! At that point, the only thing we are going to need to “fear” and address is a surge in prices (inflation). The feds are going to have to move quickly to reverse their interest rate cuts in order to prevent this.
Our medical practices are no different than any other small business. We need to be prepared both financially and operationally to accommodate that demand surge and recover our losses towards the back end of 2020. Stay tuned for strategies to assist you!
Stay healthy my friends....
For additional blog posts from Dr. Guiliana and NEMO Health, visit https://www.nemohealth.com/blog