Doomsday Nonsense: Wealthier Than Ever And Spending: What's So Hard To Understand?

Commenting in his intelligent daily review of global economics, Chuck Butler noted the following regarding the current state of affairs in the U.S. economy: “Hmmm. 23% unemployed. 43 million on food stamps. and we’re spending like crazy? I don’t buy it!”

Chuck Butler’s Daily Pfennig is an intelligent daily review worth reading, so I just can’t understand why he “doesn’t buy it”. I don’t mind mentioning that Chuck often makes comments that are more tongue-in-cheek to add a touch of flare and wit to his writing rather than factual, so my purpose here is not to criticize him, but to use the example within the context of an important lesson in communication.

This comment is worth noting for it’s substantial flaws. Yes, it is true there is a “we” in the U.S. who are spending like crazy, Chuck. The key is identifying who is the “we” you are referring to when you suggest that “we” somehow are not spending. As a strategic communications advisor to clients, I often caution about the classic mistakes in their communication of generalizing, distorting and deleting. In this case, Chuck is generalizing big time and it serves to misdirect readers, intentionally or otherwise.

I won’t hesitate to remind Chuck and all of my readers that while the lives of one sector of approximately 100 million lower to middle-class Americans has declined substantially and is looking quite grim for the next several years, the lives and wealth of the other 100 million middle to upper class Americans have improved substantially. And so do understand that “they” are the ones who are, indeed, very much happily out spending. The sales and revenue levels of luxury retail brands ranging from jewelry to holiday travel to luxury automobiles in all regions including China, America and Europe serve as clear indicators to confirm that this observation is accurate and reasonable.

Yes Chuck you are correct with the assertion that the 43 million on foodstamps plus the 20-50 million unemployed/underemployed are certainly not spending, but that group of American citizens are not the entirety of the American populus are they? There is an additional 150 million living comfortable, stable lives, an additional 60 million or so who are quite rich and doing very well, and finally, an additional few million who are filthy rich beyond belief without a financial care in the world.

Most of the “doomsday” talk I hear is deeply flawed, emotional nonsense rife with this type of misguided generalizations, deletions and distortions. We cannot say “America” is declining or collapsing or going broke. We can say that American society is undergoing foundational societal economic shifts which are negatively affecting a substantial sector of the American population while to an even greater degree, also benefiting another sector of the American population. We can also say that the value of the U.S. dollar is being diluted by the Fed’s policy to print additional dollars in their effort to prevent a deflationary collapse. But in fact, “Broad stroke” language such as “America is in another Great Depression” is nonsense and simply not accurate. Please have the intelligent to protect yourself from such inaccurate comments.

During this past week I held two executive coaching sessions for small groups of CEO’s and other senior managers from such esteemed companies as Siemens, EBay, Foehl, Shure, Chesapeake, and Vistage. Much of our discussion was on the importance and impact of the use of precise, accurate language in our communication with others. Let’s extend that lesson to the way we frame our economic observations upon which so many of our readers rely.

Mario Cavolo
Shanghai

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