Writer's Notebook - James Rafferty Blog

Taking on the Bleak Midwinter Blues

I don't know about you, but I'm getting tired of reading, hearing and seeing bad news.  The financial pages have turned into a contest to see how bad it can get in countless industries.  In this kind of environment, I'm thankful to have a job, but companies expect more from those of us who are still in the ranks.  

This is a fine time to have a hobby you care about or to devote time to your friends and family.  There is also excitement in the air about the Obama administration and the winds of changes that will be coming.   So, on the personal side, it's not all bad news and it's important to try to keep your head on straight and spend time doing things where your efforts can make a difference.  

I'm in the wedge generation, with aging parents and kids that I'm still raising.  Whatever happens in the office or financial pages from day to day, my family still needs me to do those little things, such as being at the dinner table to talk about our days, helping my youngest son with his homework, and watching a movie on DVD with my wife.  

So, the next time you don't like the news, turn it off and pay attention to what's going on around you.  You'll probably find there's any number of things you can do that will make a difference in your life or for your friends and family. 

Turning the Page

The election took place on Tuesday and the voters have spoken.  I personally was pleased with the results of the Presidential election, but the tasks ahead are huge and important.  

We are in the middle of an economic downturn that will force economic fixes such as stimulus packages to the top of the agenda.  I read today that some Obama aides are already trying to tamp down expectations.  That will be necessary, since the US economy needs to improve before we can take on new spending programs like a health care package that offers coverage for most Americans.   

I certainly hope that President-elect Obama is serious funding of infrastructure projects. In my view, this would be a practical way to offer much needed stimulus to the flagging US economy and take on much needed improvements to our infrastructure.  However, we need to avoid just throwing money at the tasks -- it would be useful for the funds to be made available at the state level so that people closer to the issues can make the decisions on which projects to fund.  I'd also like to see an auditing function put in place at the same time to make sure we're getting value out of our tax money.   

The issues are almost anywhere one can turn, whether it is the economy, the way forward in dealing with the enemies of the US, dealing with global warming, devising a smart energy strategy or improving our pre-college education system.  Mr. Obama stated clearly that a President needs to multi-task and he'll need to do that.  But even more important, he needs to set a focused set of priorities and drive those ahead.  There is no way he can take on all of the campaign promises of the last 2 years near term, so his first test will be to make smart choices in setting the national agenda. 

Deflation on the Way?

I've read some coverage of the finance mess in a few blogs that's something other than the usual handwringing.    The suggestion is that we may be in for a bout with deflation, where cash is king and companies in debt will struggle for a long time. 

Heres a sampling:  

Advice from my VoIP industry colleague Tom Evslin on Deflation (which triggered this review of blogs for me):  

http://blog.tomevslin.com/

History of the Panic of 1873:  

http://chronicle.com/temp/reprint.php?id=477k3d8mh2wmtpc4b6h07p4hy9z83x18

A view from Silicon Valley VCs (Sequoia Capital):

http://gigaom.com/2008/10/08/sequoia-rings-the-alarm-bell-silicon-valley-in-trouble/

A view from a NY VC:  

http://www.avc.com/a_vc/2008/10/what-to-look-fo.html

The net picture emerging here is of a time, which could last for a while, where cash assets are key and debt laden entitities (countries, companies and people) are in trouble.   

In my lifetime, we've never seen a period of deflation.  The blogs and articles above are offering advice on what we should consider doing if that is what ahead.    In short, pay off your debt and have cash available which could be used to buy assets on the cheap.