Jeffrey Pfeffer: Crisis? What Crisis?
The best thing about Jeffrey Pfeffer's post The Crisis Facing Business: Succumbing to the Madness of the Crowd is that he thinks we might avoid a recession now that Europe has pulled its head out of the sand and the U.S. seems to have avoided Paulson's Folly (who can forget Eugene Robinson's assessment of his plan: "...Paulson delivered a three-page ransom note that said, and I paraphrase, "Give me $700 billion or I'd hate to see anything happen to that nice economy of yours."). Pfeffer's writing for the same Corner Office crew that said Paulson got it right for letting Lehman fail, but then, I thought the same thing. I was wrong.
I like Pfeffer's column for the purely selfish reason that I think it agrees with my perspective, that Paulson and Bernanke had started to reverse the information cascade that was causing the meltdown.
But much of Pfeffer's post is stingingly obvious: good organizations with good balance sheets will ride out the current economic crisis. It can even be a good time to start a business. Of course hard times don't kill all businesses, and some businesses even thrive when the chips are down. And he's right that consistent management really helps -- though his shots at General Motors for being manic are not totally fair. I'm no fan of Big Three management, but let's face it: U.S. automakers were built for a different era and to a very real extent are trapped by their past.
Let me give Pfeffer credit for reminding us not to lose our heads, though he wouldn't be the first. I personally hope Pfeffer's right about the recession missing us. Like him, I am also not an economic forecaster, but I don't see recession missing us (take heart: I thought the housing market would collapse in 2001). I'm just hoping that the credit markets loosen up enough for us to have a nice, normal recession. In any case, most people who read his post either already knew that good management was a useful thing, or are hoping like hell he's right about the recession, so they can veer sharply back towards a more prudent management style.