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Woulda, Shoulda, Coulda

This short essay may imply a tinge of retrospection that may result in revelation or at least casual rethinking. We launched into 2014 with anticipation of a reasonably productive year and maybe some real progress in several areas. The good news is that that economy does appear to be gaining overall strength even though it will no doubt fluctuate a bit as the world turns. While I embrace a measure of optimism and continue to assume the best, I am somewhat troubled by continuing reports of unemployment, underemployment and, perhaps more worrisome, the growing number of people dropping out of the workforce. The latter phenomenon skews employment numbers but the emerging stories behind this mass abandonment seem to signal a deeper, more pervasive malaise.

The central and most troubling social questions are, ‘What were people thinking all those years when times were good? Did they plan for the potential of a downturn or for the prospect that their job might not last forever? Did they save money, live within their means, and acquire additional skills while times were good? Did they pay attention to the many campaigns encouraging retraining or take advantage of myriad retraining programs?’

Stories abound of struggling breadwinners underemployed in minimum wage jobs, if they can find work at all. Displaced workers lament they have looked for months or even years for work after having been displaced or abandoned by their former employers. There is no way around the fact that this is sad and troubling. However, when one begins to explore the deeper circumstances contributing to the current dilemma, it becomes clear that many of these people were good folks who never, ever thought, ‘What if?’ Many purchased homes they really couldn’t afford, had little in savings, splurged on every conceivable toy, did not seek new knowledge and skills, and for years generally ignored admonitions to, ‘live within your means, save, and prepare for a challenging future.’

The ongoing debate over extended unemployment benefits is illuminating the plight of millions. To be sure, some were victims of scams (which, with good counsel might have been avoided) or medical emergencies that drained precious financial reserves, but on the whole, these were rarer than you would think. Others had grown up in environments that did not promote education, advancement, or a bright future. But millions of the citizens now struggling were complicit in their predicament. The underlying debate over unemployment benefits is now subtly addressing the value of continuing benefits to those who did not actively participate in their own preventive measures. Will these benefits merely extend the malaise or, worse, promote it? Are we creating a broad, deep stratum of America that takes little or no responsibility for their own misfeasance or lack of foresight?

Those advocating ongoing assistance for those actively seeking retraining or repositioning for the future are addressing this social challenge. This country must take care of those who cannot care for themselves, protect those who are unable to protect themselves, and extend a hand to those who have experienced unavoidable catastrophes. However, there must also be a clear message sent to those who have consistently had the means to change their lives but have chosen not to do so.

Another round of unemployment benefits was prudent under the circumstances. The future, however, will belong to those wise enough to recognize the value of knowledge and skill acquisition in stable or emerging industries. Education and continuous training is essential in a global market that is increasingly technical, computer-driven, and skill-specific. Those who for the past several decades have lived for the moment are now caught in a whirlwind of new concepts, technologies and expectations that are difficult to grasp, let alone master. So, with a nod to Darwin, they are passed over for those more adept in this rapidly evolving world.

There is no castigation or admonition here. Reflection and a retrospective view can, at least on the surface, seem cruel. But the real message is that most of us, at some point, and often at many points in our lives, have choices. It is said that to become wise, you have to have been unwise. The real test is whether we, as individuals or as a society, will have the wisdom to see the future and have the discipline to make sensible personal and collective decisions that prepare us to thrive in the 21st Century.

JFL Pic Blue Shirt-Yellow Tie

With over three decades working in and with federal, state and local government, John Luthy understands public agencies.  Known for his real world, straight talking style, he is a leading futurist specializing in city, county, state, and federal long-range thinking and planning. John is the author of Operations Planning: A Guide for Public Officials and Managers in Troubled Times, and The Strategic Planning Guide, both published by the International City/ County Management Association (ICMA). Reprints of his book, Planning the Future – A Guide to Strategic Thinking and Planning for Elected Officials, Public Administrators and Community Leaders (2010) has sold out three times. An innovative and dynamic presenter, John is frequently asked to speak and consult on how to prepare public organizations and communities for emerging challenges (public futures at http://www.futurescorp.com).

The Problem with Inequality

The 2013 movie, Inequality for All premiered at Sundance Film Festival in the Documentary Competition section and won a Documentary Special Jury Award for Achievement in Filmmaking. Directed by Jacob Kornbluth, the film examines widening income inequality in the United States, which lately has been a major national topic among academics, politicians, and plain old folks that are tired of working more for less.

Since the 2007-08 financial crisis the issue of income inequality has gained public awareness. The foundation for much of the concern is grounded in some stark and troubling data. In the thirty years before the latest recession the U.S. economy doubled. But, according to this documentary, these gains went to a very few. As of 2013 the top 1% of earners now take in more than 20% of all income—three times what they did in 1970. Distortions are even more extreme at the very top. The 400 richest Americans now own more wealth than the bottom 150 million combined. This level of inequality poses a serious social and economic risk to all Americans, regardless of income level, due to skewing a playing field that historically allowed virtually anyone to make it big. We are now seeing much more anger and resentment from a frustrated middle class who feel the American Dream has been taken away and is being held hostage by the rich and powerful.

At the heart of the film is a simple proposition: What constitutes a ‘good’ society and what role does the widening income gap play in the deterioration of the nation’s economic health? Narrator Robert Reich, former Secretary of Labor and professor of economics at the University of California-Berkeley, distills the story through the lens of widening income inequality—currently at historic highs—and explores what effects this increasing gap has not only on the U.S. economy but American democracy itself.

Pulitzer Prize winning author Michael Hiltzik noted on February 4 in LATimes.com that discussion about the middle class being left behind has become, “part of the mainstream kitchen table debate” in America. Also cited is the new Gallup poll that found fully two thirds of adults are either somewhat or very dissatisfied with the distribution of wealth in this country.

The trend is growing more acute. Since 2009, 95 percent of U.S. economic gains have gone to the wealthiest 1 percent of the population. While stocks on Wall Street are soaring, salaries across America remain stagnant, not even keeping pace, dollar for dollar, with salaries and wages of 25 years ago. Los Angeles Times writer David Horsey noted (January 21) that those at the top of the social ladder have one overriding goal: “to protect what they have and get even more.”

New York Times columnist David Brooks weighed in with a deeper review, citing the need to understand the many contributing factors to income inequality. He noted that growing affluence among the wealthiest Americans is definitely not causing problems within the middle or poorer classes. Most issues, which have also been reported by Pulitzer Prize winning New York Times writer, Tom Friedman, result from the phenomenon of globalization and cheap foreign labor that has dampened U.S. wages. Moreover, mitigating social forces include a dysfunctional (or at least unequal) education system, insufficient technical training, an entitlement culture, and decades of largesse even among the poor have contributed to the current condition. Friedman’s book, That Used to be Us (Farrar, Straus and Giroux, 2011), cited numerous contributing factors and forces responsible for a perfect storm of economic stagnation for the American middle class and those who remain classically poor.

In a January 26 article (The Other Kind of Inequality) Wall Street Journal writer Mickey Kaus suggested that the decline of American social egalitarianism is more worrisome than differences in how much people earn. Merely hiking the tax rate for the wealthiest Americans or boosting the minimum wage will not solve deeply ingrained problems that began over 50 years ago.

In the Land of the Free, people pursue the American Dream and, even with the wealthy taking home the top 50 percent of the nation’s income, there is no absolute barrier to success. Just ask the many private and public sector employees who began their careers among the poorest and least advantaged. There remains ample proof that virtually anyone can break free of economic, social and educational shackles to become highly successful. Those One Percenters who are calling for income redistribution miss the point. Taxes pay for the infrastructure and services we all enjoy and the rich cannot enjoy those benefits any more than the poor. They do, however, pay more for that infrastructure due to making more. In essence, this already redistributes wealth to sustain America’s framework- its roads, ports, airports, schools, bridges, public safety services, health services, military, etc

As Kaus noted recently, it is a problem without a clear solution. Some people somehow get through high school, technical school or college and go to work. Some prosper, some don’t; and, some had to work through school and some didn’t (most did or borrowed to the hilt); but of those who gravitated upward, most did it through hard work, perseverance, grit and luck. Inequality is a social norm. Even the most primitive societies tend to stratify. What could and should make America different is the role the wealthy play in helping others, teaching, sharing ideas, and contributing to institutions that open more doors to all citizens. I like the Buffet/ Gates approach-make a lot of money then use it to help others by financing innovation, healthcare, preventive medicine, research and education. Taxes aren’t the answer. The true answer lies in one’s conscience, world view and commitment to the global community.

jfl-pic-blue-shirtyellow-tie.jpgWith over three decades working in and with federal, state and local government, John Luthy understands public agencies.  Known for his real world, straight talking style, he is a leading futurist specializing in city, county, state, and federal long-range thinking and planning. John is the author of Operations Planning: A Guide for Public Officials and Managers in Troubled Times, and The Strategic Planning Guide, both published by the International City/ County Management Association (ICMA). Reprints of his book, Planning the Future – A Guide to Strategic Thinking and Planning for Elected Officials, Public Administrators and Community Leaders (2010) has sold out three times. An innovative and dynamic presenter, John is frequently asked to speak and consult on how to prepare public organizations and communities for emerging challenges (public futures at http://www.futurescorp.com).

Resilience & Stability

My first blogs of 2013 were cautionary but generally optimistic, citing recent oil discoveries, job growth, growing consumer confidence and a stock market that at the time hovered around 14,000. As the year began, there were many conflicting variables, some promising a strong year, others indicating emerging options that could tip either way. And, of course, the global economy was struggling, with some doubt whether the EU could sustain itself or would spin out of control like some ill-conceived South American junta. War, political and sectarian conflict, famine, drought, floods, tornados, and just about every other conceivable calamity were part of our daily lives. Even with all the drama and turmoil available to dampen optimism, on the whole, 2013 began well and seems to be ending reasonably well.

As I write, the DOW is well over 16,000, around 2,000 points higher than a year ago indicating, at least to some degree, returning optimism. The reasons for this are diverse, but business has done reasonably well, savings have increased, consumers are cautiously spending, home sales continue to rebound, and the economy has grown around 1.7%. More importantly, the economy has gained momentum during the 2nd half, which, if continued, should carry us to 2.5% growth in 2014. While not a huge boost, it reflects a level of stability and caretaking America must have to rebuild its base.

Based on recent Kiplinger reports, we may see unemployment continue its downward drift to around 6.9% in 2014, along with a significant decline in the federal deficit, down to 3.3% of GDP from 4.1% in 2013. These alone are good signs, indicating to the observant and rational that at least some federal policies are working as intended. Of course, if you reviewed the March 25, 2011 Kiplinger Letter, you would see a growth prediction of 3.1%, which proved to be overly optimistic for 2011, 2012, and again 2013. The difference going into 2014 is that new oil reserves and supplies are driving down the cost of crude, and if some estimates prove accurate, prices will fall to the $85 range, providing a significant economic boost. Even at $90/ barrel, there will be a positive ripple effect across the economy that was not available two years ago.

The Fed has shown remarkable prescience and restraint in not only formulating a coherent fiscal strategy but in its implementation. While the financial and health care industries seemingly remain outside the bounds of rational control, there are signs that people have had enough. Whether Congress will act is another question, but monitoring is underway and new legislation, if implemented, may begin to curb the grotesque predatory practices that plague certain elements of banking and healthcare (for those inclined, read Elisabeth Rosenthal’s article, As Hospital Costs Soar, Even Stitches Cut Deep, New York Times News Service 12/3/13).

From all accounts, Europe will continue to struggle, hurting U.S. exports and continuing to limit our economic growth. This will be the third year in a row that we have not had much support from our largest trading partner and, with global economies struggling, the prospect for any more than moderate (3%-4%) export growth is slim. Overall, not dismal but below desired levels.

From my vantage point, there is reason for optimism, but only if tempered with understanding. Clearly, growth will be less than robust. However, keep in mind that the U.S. and all world economies are still undergoing a major decade-long transformation, with multiple converging variables. Powerful forces are at play and many are uncontrollable in the short term (climate change, poverty, famine, deforestation, ocean degradation, sectarian conflict, territorial disputes, etc.).  Business and government must form stronger coalitions to forge sustainable strategies and a new foundation for long-term prosperity. While desperate, ill-conceived interventions harm private enterprise, so does the proliferation of rackets, scams, accounting fraud, and avarice that are hallmarks of uncontrolled capitalism. Balance, vision, planning and mutuality are the keys to strength. They are also the keys to a future that is not characterized by destructive private or public policy but by collaboration, commitment and equality.

2014 is dawning relatively bright. Though guarded, there is optimism mixed with prudence- a good thing for a consuming public used to an endless cycle of spending, acquiring, and discarding. The prospects for a fairly strong year are growing. Janet Yellen should keep the Fed on track, business will invest as opportunities emerge, Congress may see the light (doubtful), and the public will begin to demand greater progress in the areas of health care, banking, education, infrastructure and the environment. I believe in self-determination and resilience. The Futures Corporation remains committed to achievement, to helping others fulfill their dreams and to contributing to a bright, sustainable future. It won’t be easy, but good things can happen if we stand together.

jfl-pic-blue-shirtyellow-tie.jpgWith over three decades working in and with federal, state and local government, John Luthy understands public agencies.  Known for his real world, straight talking style, he is a leading futurist specializing in city, county, state, and federal long-range thinking and planning. John is the author of Operations Planning: A Guide for Public Officials and Managers in Troubled Times, and The Strategic Planning Guide, both published by the International City/ County Management Association (ICMA). Reprints of his book, Planning the Future – A Guide to Strategic Thinking and Planning for Elected Officials, Public Administrators and Community Leaders (2010) has sold out three times. An innovative and dynamic presenter, John is frequently asked to speak and consult on how to prepare public organizations and communities for emerging challenges (public futures at http://www.futurescorp.com).

Education and the Future

A tectonic shift is occurring in America’s education system. Common core standards have been accepted by 45 states and are now being recognized by many as the country’s best chance for a vibrant economic future. This flies in the face of budgetary limits and the narrow views most legislatures demonstrate regarding funding for education. While the business community and more enlightened legislators seem to understand that the 50 million children now in the nation’s K-12 educational system are the foundation of the future, others seem more comfortable with substandard test scores and achievement far below that of many other countries. This narrow provincial view is eroding America’s options for long-term economic vitality and creating limited opportunities for our young people to compete in a global marketplace.

The fourth annual NBC News Education Nation Summit was held October 6-8 at The New York Public Library. Moderated by Brian Williams, the Teacher Town Hall portion aired live on MSNBC on Sunday, October 6 and was extraordinarily powerful. To say the least, the 2-hour fact-based program was moving but probably left many viewers with feelings of anger, frustration and exasperation. From virtually any perspective, as with many other current challenges, many of the country’s educational troubles lead directly back to the Congress and state legislatures, neither of which seem enlightened enough to triage school funding to achieve the greatest gain.

It is clear that teachers are spending on average from $150 to $400 a year out of their own pockets on classroom materials due to state and local funding shortages. And, when compared to similarly academically prepared and continually educated professionals, they are paid around 30 percent less. Many districts are wholly unprepared to implement common core programs due to insufficient funding for materials and teacher training. Yet, the business community has acknowledged that national standards leading to greater skill acquisition are absolutely essential if this country is to remain competitive.

A dominant question pertains to the nation’s future workforce. With 78 million Baby Boomers either retired or heading in that direction, workforce planning and development has become a Tier I priority. However, it must be considered in concert with K-12 preparation if we are to develop the technical skills required for a globally competitive workforce. U.S. schools are losing over a million students a year before they graduate. This is an enormous number of non-educated individuals entering a workforce that demands rapidly escalating knowledge and intricate new skills. Even though the national on-time graduation rate (74.9%) is the highest in 40 years, there is a long way to go.

From a purely selfish and performance-driven view, it would seem wise to invest in education if, for no other reason, to access the knowledge and skills required to operate in complex, technology-dependent organizations. But investment requires understanding what teaching and educating is all about, which is curious because all of us have experienced the entire educational process. Even with profound personal experience, few seem to grasp that teaching is about relationships and connecting with each unique student. It is not about rote drills and introducing technology. All the new technology will not improve learning if a student is unwilling to invest the time or has been raised by parents who do not support the educational process by reading to their children, helping with homework, and generally reinforcing good study habits. It is even more essential that parents believe that education is important and valued in the family.

It is important to realize that teaching is not a program but a process. Just as important is the understanding that teaching means caring about the ultimate success of our children. Teachers don’t teach math, English, or science…they teach children, and every child is unique, complex and worth individual attention. Unfortunately, our system is becoming driven by the belief that technology is the panacea that will save the educational system by introducing a new learning environment that creates a more modern, hyper-prepared graduate. So far, the exact opposite is proving true. Children still need individual attention, nurturing, counseling, guidance, encouragement and mentoring that only professionally prepared and experienced teachers can deliver in concert with family support.

We must keep in mind that, as one teacher noted during the MSNBC program, ‘We are not going to test our children to greatness. We are going to teach our children to greatness.’ By using emerging tools, such as the Kahn Academy, teachers may be able to provide more individual attention. The conundrum is that integrating technology requires constant training and investment. It requires a broad master plan with a vision of what we are trying to accomplish. In addition to teachers, three tiers of education are required: parents, communities, and students. It must be an integrated system with broad support and financial backing. Even more critical is that legislatures and Congress are the wrong institutions to create policies and regulations. These must come from the educational community, which, until recently was reluctant to embrace performance reviews and higher practice standards. This is rapidly changing and will continue to require patience, innovation and vision.

The future depends on educated people who can compete and prosper in an evolving world. Is the U.S. ready to refine, upgrade and promote its educational system? There are good signs, but financial support is sorely needed. Before this happens, I predict that more integrated private and public sector involvement is essential. It’s time to define the desired educational outcomes needed to meet predicted challenges and build a system to suit. Moreover, we need responsible citizens who understand freedom and know their history, geography, science, English and math. We can build a remarkable future through education but must begin now. The title ‘Education Nation’ is worth adopting. Becoming such a nation will require much more effort and commitment.

With over three decades working in and with federal, state and local government, John Luthy understands public agencies.  Known for his real world, straight talking style, he is a leading futurist specializing in city, county, state, and federal long-range thinking and planning. John is the author of Operations Planning: A Guide for Public Officials and Managers in Troubled Times, and The Strategic Planning Guide, both published by the International City/ County Management Association (ICMA). Reprints of his book, Planning the Future – A Guide to Strategic Thinking and Planning for Elected Officials, Public Administrators and Community Leaders (2010) has sold out three times. An innovative and dynamic presenter, John is frequently asked to speak and consult on how to prepare public organizations and communities for emerging challenges (public futures at http://www.futurescorp.com).

Enough Already!

Most exceptional editorials and essays are produced during times of social upheaval, citizen angst and polarity among conflicting ideologies. On October 2, the Las Vegas Sun carried three separate editorials written by New York Times authors Paul Krugman (Rebels Without a Clue), Gail Collins (Congress Cracks Up) and Charles Blow (The Captain Ahabs of the House). All were blunt, scathing reviews of the current idiocy taking place in Washington D.C. and, even though each had a different prism, the overriding theme was that the epic level of dysfunction is totally irrational and horrifically stupid. And, of course, it is the American public and global business community that will bear the brunt of the various ripples that are sure to come.

Poignant rhetoric aside, an even more interesting fact is that there are many, many other forces at play on the planet and all deserve attention.  Nicholas Kristof wrote a recent essay celebrating that human mortality due to AIDS is finally being reduced, especially in sub-Saharan and South Africa and other stricken areas. And, through the efforts of many governments, the World Bank, various NGOs and the United Nations, we are seeing a substantial reduction in worldwide poverty, disease, illiteracy and isolation. Mostly through the efforts of non-governmental agencies, such as the Bill and Melinda Gates Foundation, we are witnessing enormous progress in disease prevention and education, both of which are leading to revolutionary growth in grassroots entrepreneurs and neighborhood businesses. Good things are happening…they just aren’t happening due to the good work of the U.S. Congress.

It seems clear that the American public must collectively rise above petty political ideologies and seek a deeper understanding of what good government should entail. We have elected representatives who virtually always ‘re-center’ once on Capitol Hill. Good intentions are quickly replaced by positions driven by power and political control. The calculus of a broad and sustainable American vision then becomes about near-term struggles for position, assignments, and illusory ‘proof’ that elected representatives actually meet constituent expectations. The record will show that, on the small stuff, each state gets a share of earmarks and pork. But on a grander scale, this country is on a slippery slope greased by greed and senseless jousting. At a time when our leaders should be fully engaged in collaborative efforts to address water issues, create a long-term economic plan, and address infrastructure decline, incarceration levels, immigration, educational performance, public safety, and uncontrolled health care costs, they default to a childish game of chicken. As stated in previous Blogs, no business or local government leader could afford to act as foolishly as politicians, because nothing would ever get done and their operations would quickly fail.

These are troubling times. While many good things are happening around the world, U.S. leadership has become a sad joke. Regardless of rationales concocted by party ideologues, we need decision makers, thought leaders and visionaries who focus on the long-term development of this nation. We are tired of foolish wars and police actions; we are tired of high unemployment; we are tired of resource dependence; and we are tired of hearing how the U.S. ranks far below many other countries in educational performance. But mostly, we are tired of a juvenile, self-serving, and egocentric Congress that can’t plan, manage, decide or implement.

jfl-pic-blue-shirtyellow-tie1.jpgWith over three decades working in and with federal, state and local government, John Luthy understands public agencies.  Known for his real world, straight talking style, he is a leading futurist specializing in city, county, state, and federal long-range thinking and planning. John is the author of Operations Planning: A Guide for Public Officials and Managers in Troubled Times, and The Strategic Planning Guide, both published by the International City/ County Management Association (ICMA). Reprints of his book, Planning the Future – A Guide to Strategic Thinking and Planning for Elected Officials, Public Administrators and Community Leaders (2010) has sold out three times. An innovative and dynamic presenter, John is frequently asked to speak and consult on how to prepare public organizations and communities for emerging challenges (public futures at http://www.futurescorp.com).

THE CORNER

Homilies abound about ‘turning the corner’ but accurate manifestations are often elusive. These days, it is difficult to predict anything with reasonable certainty, but I continue to envision what might be relative to what is. In other words, hope springs eternal, but must be moderated by reason and analysis.

To be sure, we have entered a zone that is rife with swindles, exotic business deals, political jousts, global protests, sectarian conflict, revolution, resource depletion, climate change and unsustainable financial mischief that is leading nowhere. While this may seem negative, just listen to the news or read any sensible journal. Of course, the U.S. housing market is enjoying a moderate rebound, the DOW remains reasonably strong, consumer confidence is beginning to recover, and business is hiring. The central question pertains to sustainability.

Reports conflict over whether there is growing geopolitical harmony or if the fenders are rattling more than meets the eye. Dispassionate analysis indicates little real progress and a growing ‘reality avoidance’ posture. Who knows what the real story is in Greece, Spain, Italy, France, England, and the rest of the EU? Some sources indicate a culture of ‘false positives’ that are being reported to boost nationalism and continental morale. What is really happening and how it may impact this country is anyone’s guess. The same is true with China, Russia, India, Brazil, Mexico and other struggling economies. Are they reasonably healthy and will they contribute to a stronger global economy?

A June 15 New York Times article (Even Pessimists Feel Optimistic about the American Economy) touted “the start of a new era of cheap energy,” in the overblown assertion that the worst is behind us. ‘Cheap’ oil was historically less than $20 per barrel and allowed massive progress throughout the 20th Century. Current prices rarely fall below $90 and can whimsically soar to over $100 (recently $107). Plus, current oil supplies are expensive to extract and refine, so expect prices to escalate. Oil will not be cheap; nor will education. Quoting George Mason University professor Tyler Cowen, that same article blathered on about how learning is being transformed by on-line education, which opens new doors to those without the means to take traditional university courses. However, the value of many on-line degrees remains highly questionable, regardless of the price. America needs technicians, scientists, engineers, doctors, mathematicians, physicists, chemists, and machinists. It’s difficult to produce talent in these fields through on-line courses.

Turning the corner requires thoughtful analysis of various realities and how those realities factor into an uncertain future. The number of U.S. citizens living in poverty is at an all-time high. The cost of living is high and inequality among various social strata is America’s greatest cultural and economic de-stabilizer. While many are doing well, the vast majority is not. Wages have not kept pace with the cost of living, health care is expensive and the best methods of providing affordable care are constantly debated; the U.S. remains far behind other countries in educational performance; our crumbling infrastructure needs a $2 trillion infusion; and the economy remains based on service instead of on value-generating production.

In a recent Charlie Rose interview, co-chairman of Pimco Bill Gross expressed that the headwinds were strongly against wage increases for American workers as the competition between man and machine accelerates. More jobs will be lost unless re-shoring gains momentum and new production facilities are built. Deleveraging has reduced personal, business and sovereign debt but has also reduced the inclination to invest, at least until there are stronger signs that 3 to 4 percent returns are possible.

The remainder of 2013 will be relatively strong, with general stability and cautious optimism. The U.S. will see slightly higher inflation, marginally higher interest rates, around 2 percent growth for the year and perhaps over 2.5 percent in 2014. As with all probability forecasting, there are too many ‘Black Swan’ variables that may enter the equation. In my view, the corner has not been turned and we may not be building enough momentum to generate a robust 2014. For the remainder of this year, the best course is to invest in planning, careful analysis and conservative opportunities, while building a stable platform for a stronger 2014. There are highly volatile forces at play, so stay focused and prepared.

JFL Pic Blue Shirt-Yellow TieWith over three decades working in and with federal, state and local government, John Luthy understands public agencies. Known for his real world, straight talking style, he is a leading futurist specializing in city, county, state, and federal long-range thinking and planning. John is the author of Operations Planning: A Guide for Public Officials and Managers in Troubled Times, and The Strategic Planning Guide, both published by the International City/ County Management Association (ICMA). Reprints of his book, Planning the Future – A Guide to Strategic Thinking and Planning for Elected Officials, Public Administrators and Community Leaders (2010) has sold out three times. An innovative and dynamic presenter, John is frequently asked to speak and consult on how to prepare public organizations and communities for emerging challenges (public futures at http://www.futurescorp.com).

Evolving America

During the Great Depression, there were common themes that defined the experience for virtually every citizen. Economic and climatic upheavals surged across the land, affecting young and old, rich and poor. Very few were untouched. The value of such broad, catastrophic social suffering was that it forged bonds that would inadvertently prepare the country for the horror of a World War that it had tried so hard to avoid. When it came, the nation was more ready than it realized.

The deprivation that defined the years from the mid-1920s through the end of WWII created a determined, if not fully unified society of survivors, entrepreneurs, and warriors. This unique combination has carried America forward over the past 65 years and created a foundation for a nation that can, and should, endure. Clearly, there are signs that the fabric is fraying. While there remain some that continue to celebrate all that America is and was, there are just as many who offer cautionary counterpoints suggesting decline is underway.

Much like the Great Depression, the Great Recession of 2008 has reshaped America. After a profligate six decades, debt has been reduced, savings are growing, and there is evidence that more people are considering the long view and their legacy as citizens of a planet under duress. More importantly, collectively concerned voices are being raised over poor educational performance, political gridlock, public health, infrastructure decline, reduced economic vitality and wars that seem both constant and irrelevant. This century is being defined not by “imperial overstretch” as noted by Paul Kennedy in his 1988 book The Rise and Fall of the Great Powers. In that superb book, Kennedy raises the point that “the sum total of the United States’ global interests and obligations is nowadays far larger than the country’s power to defend all simultaneously.” It appears that all but the most jingoistic citizens would concur that the U.S. has a more important domestic agenda that needs immediate attention. While few advocate isolation, there is growing advocacy for more intervention here at home and less in the affairs of others.

Containing only 5 percent of the global population, the U.S. still produces a quarter of the world’s economic output. This has remained unchanged even during the 5 years of difficult economic recovery. While we might cautiously celebrate the ‘rise of the rest’ we have also proven quite capable of competing successfully in volatile global markets. More importantly, there are signs that America’s entrepreneurial power is being reenergized. It now seems humorous that, in 2008, German finance minister Peer Steinbruck strongly stated that “the United States will lose its status as the superpower of the global financial system.” Since that time, the EU has struggled, the DOW is above 15,000, and U.S. financial institutions and industry continues to cautiously recover.

Perhaps the greatest benefit of this recession and recovery is that it returned many citizens to their roots and away from habits that lead to fiscal disability and instability. While some generational variations exist and educational levels remain a factor in employment, there are evolutionary signs that bode well for America. Overseas production costs and issues continue to rise, encouraging U.S. on-shore industrial resurgence; technical education is being seen as equally essential to this new American Century and more students are opting for careers based on technical know-how; talent clustering has become a reality, creating magnetic cities and regions that attract highly educated and technically gifted people and industries that hire them; agriculture continues to grow as the U.S. remains a central global breadbasket; auto and home sales are up; and home debt is down, confidence is up, and consumers are beginning to cautiously spend. There is trepidation, but there are signs that America is on the move.

For those who review the data, I would ask you to consider whether it has been wiser to slowly work out of this recession and if deliberate growth might not still be the best course? It would appear that it is sensible to have more savings, less debt, and fewer factors that could derail a family, community or business. While austerity has proven to be a poor substitute for conservative investment and spending, it should provide a touchstone for why we spend and what value accrues. Public and private entities must seek long-term value and a return on every investment. Rapid expansion fueled by easy money and profligate consumers devolves into giant Ponzi schemes that have doomed entire communities. An evolved America must seek consistent, sound growth platforms fueled by technology, education, long-term investment, and entirely new methods of collaboration. Individuals, business and communities must live within their means and learn to thrive on stable foundations characterized by innovation, sharing, collective will, common vision, and discipline.

There are signs that we are evolving back to the level of sensibility and rational thought that defined the Greatest Generation. Frugality can coexist with entrepreneurial energy and conservative ideals can provide curbs that can keep us on a progressive path. It is essential to understand that a lot is happening in the global ecosystem and the ripples will continue to wash upon these shores. But the real key is to take the point and lead during uncertain and troubled times. America has done this and done it well. It can do it again if it maintains a clear vision of the desired future…but rest assured that it will be simultaneously challenging, frightening, enlightening and rewarding.

 

JFL Pic Blue Shirt-Yellow Tie With over three decades working in and with federal, state and local government, John Luthy understands public agencies.  Known for his real world, straight talking style, he is a leading futurist specializing in city, county, state, and federal long-range thinking and planning. John is the author of Operations Planning: A Guide for Public Officials and Managers in Troubled Times, and The Strategic Planning Guide, both published by the International City/ County Management Association (ICMA). His new book, Planning the Future – A Guide to Strategic Thinking and Planning for Elected Officials, Public Administrators and Community Leaders, was released in October 2010. An innovative and dynamic presenter, John is frequently asked to speak and consult on how to prepare public organizations and communities for emerging challenges (public futures at http://www.futurescorp.com).