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So Is The Economy Really That Bad? Indicators Say “No”


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Droughts, floods, seemingly uncontrollable market factors – I'll be the first to admit it’s easy to get pessimistic from time to time. But the trouble with pessimism is it works. The law of the self-fulfilling prophecy is a universal constant that’s too powerful to ignore.

There’s currently a largely unfounded wave of pessimism in this country. Much has been written about why consumer confidence is at a 30-year low, but the economic indicators are nowhere near anything approaching the other times when consumer confidence faltered.

Some of the arguments that seem to make sense to me is that while the economy hasn’t actually even entered a recession and the overall economy has remained fairly strong, the segments that have taken a hit have had a direct impact on a lot of people. For instance, the decrease in housing values affects a lot of people; so does the soaring price of energy and food.

The actual statistics say we haven't even approached the numbers of the 1990 and 2001 recessions. In 1980, consumer confidence levels were comparatively as low, but the unemployment rate was 7.5% and inflation was at 14.4%. Today, those numbers are a respectable 5.5% and 4.2%.

But the important thing to remember is that, despite what the economic indicators say, consumer confidence is the most important number. If consumers believe things are getting worse, they won’t spend and then things get worse.

In fact, there’s similarity between the national mood and that of the U.S. cattle industry. U.S. cattlemen are enjoying near-record prices, strong demand, and mind-boggling prospects for demand growth globally. Our product is higher quality and more consistent than it was a few years ago, and the tools to make it even better are there.

But the longest cattle cycle in history has also occurred because of a lot of weather disruptions, droughts, and now excess moisture. Input costs have exploded, and the industry has suffered a string of defeats –the new farm bill and global marketplace challenges, to name a few.

As a country, and as an industry, it’s good to sit down and identify our greatest threats and weaknesses. But we have the choice of dwelling on those weaknesses or setting out to take advantage of the opportunities with our strengths.

One of my mentors describes his philosophy very simply – he wakes up each morning and answers two questions. The first is: What is the greatest opportunity I can pursue today? The second is: What must I pursue today? He then makes sure he spends 50% of his time pursuing that day’s great opportunity, and the rest performing day-to-day tasks.

He admits he doesn't always spend that much time pursuing opportunities, but the exercise keeps him focused on identifying and pursuing them, rather than dealing with the multitude of challenges that arise. It is that nuanced difference in perspective that makes a quantum difference in actual outcomes.

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© 2008 Penton Media Inc.

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