Wednesday, June 25, 2008


As I continue to struggle with the recent death of my friend Jim Goodman, I return over and over to the notion of perspective. Sometimes I feel like an early artist: everything I see at this moment is big and dominates the foreground; everything else, if it is even included, is small and in the background. Put differently, I could get somewhere in the forest of life if it weren't for the damned trees.

In speaking with another accomplished friend and entrepreneur yesterday, we discussed perspective in two contexts: the economy and our children.

First, he is convinced that the U.S. economy is going to hell in a hand basket.

While these are trying times and while we are looking at a potentially unique combination of rising fuel and food costs and declining home prices, something he distinguishes from stagflation by calling it "deinflation", I suggested we should keep in mind how today's economy compares to history. Unemployment remains low, interest rates remain very low, prices of certain commodities: gold, oil, corn, are high, they are not at all time highs (adjusted for inflation), the U. S. economy continues to grow, and, (and this a a big AND), the global economy is unlike any ever seen. Can things get worse? Yes. Will they? I do not know, but I expect them to. China is on a collision course with Adam Smith's invisible hand. Worldwide terrorism remains a potential major disruptor. BUT, I believe innovation and opportunity will win out. Change is in the air in the U.S. and that ought to be good. BTW, my friend is from Canada.

Second, he mentioned a recent trip with his daughter to visit U.S. colleges. He describes their migration and the big business of U.S. universities. Apparently there are more than 2,500 colleges and universities in the U.S. versus a grand total of about 35 in Canada. Canada is about one-tenth the size of the U.S. , so this ratio appears to be out of whack. (Set aside the price comparison of all Canadian universities are public versus the incredible cost of private universities in the States where value does not appear to be represented in the pricing). Again, I suggest, it is us, the children and grandchildren of the Greatest generation, who have lost perspective. Do we need so many universities? Probably not, and the market will take care of that. Are we getting our money's worth in tuition? Often not, but that is our fault. Do we value education properly? Sometimes yes, sometimes no. If so, do we compensate our teachers properly? Some of them, but more than compensation, I think we can do a better job of recognizing the good ones. Again I am not confident of the answers, but: the U.S. continues to lead the world in innovation. While many students may be behind international counterparts, everyone wants to come here or at least do business with us. As my friend Kevin, WarriorBard, puts it: you don't see anyone swimming to Cuba. Don't get me wrong; there is much that needs fixin'. I just believe we will fix it, and that my children will have great, different, but still great, opportunities to live their dreams.

No comments: