November 20, 2008
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News: Social Wisdom and the CC Crunch.
While we point fingers and blame other victims, we sometimes miss the underlying cause of our problems. Sometimes we must be bitten from behind by phantom truth before we can unravel the twisted knot we find ourselves in. This appears to be the case with the current credit card crisis we're in. We want to blame the unemployment crisis, the economy, the sub-Prime meltdown, health care, the energy crisis and the credit card lenders themselves for the credit card crisis.
A little introspect should reveal to us that all these other ‘contributors' are also victims themselves of a larger flaw in the way we live. We've allowed our leaders to take their eyes off the requirement for social wisdom. While it may be true that these other entities directly contributed to the credit card debt demise, the most significant truth is that we've ignored the fundamental truth of Stephen Covey's ‘second quadrant'. In his "7 Habits of Highly Effective People", Mr. Covey describes the peril of ignoring ‘important' activities until they become ‘urgent'. The danger of this oversight is that, by the time these things finally become urgent, it's usually too late to avoid extreme consequences. Credit card debt is certainly one of these activities.
As all of these other calamities exploded in our faces, their urgency masked the importance of not being buried in credit card debt. All seven of these entities have become victim of one common flaw in our culture: Tolerating apathy toward social wisdom. So what is ‘social wisdom'? A major part is understanding the fundamental axiom that an economy can't survive without a multitude of buyers. These are the golden goose for an economy. Allowing reduced and disappearing wage means (the wages that the common people receive) to an extreme, dries up the buyer market. Bailing out a supplier market which still has no buyer market is throwing good money after bad. The only path to economic recovery is to shore up the buyer market with good wages. Anything else is money-down-the well. Henry Ford understood half of this well. By paying good wages to his workers, he enabled them to buy his cars. That concept caught on and our nation flourished.
The other half of the truth is coming down on us now. Paying too high of wages destabilizes the supplier market. It all comes down to finding the balance that works best for our nation as a whole and then regulating it to stay there. It should not take a nation eight years to realize this. Change should have been demanded years ago. So now we have a credit card crisis; the last in the line of victims caused by apathy to social wisdom.