A Touch of Optimism

This was an interesting week, supplying enough material for a month’s worth of blog posts.   The challenge is to make sense of it all and synthesize things into a single blog post that carries a message.

By George, I think I’ve got it!

The week was bookended by two events—co-lecturing an Entrepreneurial Finance class with Elatia Abate, a dynamic, enthusiastic, and optimistic thinker who is doing great work on the future of work (see her enlightening and inspiring Ted talk at _https://www.youtube.com/watch?v=KBRlUzzYfLc).   I tried to serve as the set-up man, delivering my stark message on the Four Horsemen of the Career Apocalypse (Debt and Demographics/Technology/China/Politics and Regulatory State) that will combine to create a world that will create career upheaval and dislocation in ways that are fundamentally different than the one that my generation had to face.  Elatia’s message is that this set of conditions and risks requires an entirely different mindset to survive, and, indeed, a different way of thinking will create opportunities out of this environment.  She presented the antidote to my darker vision of challenges that younger people face entering the workforce.  While I think our presentation needs to be tweaked a little--it was more the first dress rehearsal of a play where bridges and connections need to be smoothed out a bit.  The underlying message is an important one.   The careers of this generation will be more different than mine than mine was to my grandfather’s, and people will need to be much more entrepreneurial and resilient  than in the past in order to have satisfying and prosperous careers.  

On Friday, I had the opportunity to meet and speak with Austan Goolsbee, Booth School of Business economist and economic advisor to Barack Obama.  We had an engaging conversation, and while I certainly had views that were different than Goolsbee (more than one business executive has referred to Goolsbee as Booth’s “token socialist”), I found him to be very personable, witty and sometimes uproariously funny.   In his remarks, Goolsbee said that there is a deep flaw in the model of the Federal Reserve—that is a reversion to the mean.   The Fed models out a large increase in home prices as portending an increase in consumer spending, and that simply has not occurred.   We will have slow and steady growth, not a reversion to the 2006 days.   Goolsbee asserts that 2006 was NOT normal and that the Fed is way overconfident about reversion to the mean (the 2006 mean).   We will have growth in which exports and innovation lead growth, and will be less reliant on consumer spending and housing.  His brief forecast played it safe and said that the near term future would look more or less like the recent past--- 2 to 2.5% growth.  

But was more interesting to me, and where we have agreement, is his rejection of the position of the "secular stagnationists."  Despite the post-crash struggles, he believes it is a mistake to extrapolate the last eight years into the future.   The United States has a growing population (it would be a mistake to unduly restrict immigration), and the most productive workforce in the world.  We have a deeply ingrained entrepreneurial and innovative culture that reaches beyond Silicon Valley.  More than any other advanced economy, U.S. businesses are more likely to adopt innovative products and methods.  He stated flatly that given these realities, it is impossible to be a pessimist and think like the secular stagnationists.

My week began and ended with personal interaction with two very bright, energetic and exuberant people.   Between my professional work, which often involves working with organizations that did not adapt to change rapidly enough, and the continuous drumbeat of political strife by the MSM, it is easy to overweight the negative.  It is vital be be around people that constantly remind us that change is not straight line, that disruption is normal, and that growth is sometimes painful.  

And that a sense of humor lubricates it all, which both Ms. Abate and Mr. Goolsbee have in spades.

I'm grateful to have had my week bracketed by the opportunity to have time with these two important thought leaders.