Surviving Tough Economic Times

Subject: Surviving Tough Economic Times

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Welcome to t= he Next Step Solutions E-Newsletter!

3D"http://origin.ih.constantcontact.com/fs046/1101096837488/img/1= Dear Margaret,

It has been a = tumultuous few weeks. The market has been swinging wildly, companies that were o= nce bastions of our financial system are crashing, and our government wrangled and argued its way to an unprecedented, and very expensive, bailout bill.

The elections are almost upon us. We are all suffering f= rom political overload and burnout. In spite of that, we need to attempt = to untangle the rhetoric and vote with our brains, not just our hearts. I have a few thoughts to offer in today's newsletter from the business perspective. See our feature article - "Don't ignore the lessons= of history."

"Change" is one of the biggest campaign slogans this year. Change has also come to Next Step Solutions. We have an important announcement to share with our readers. Read about it below= .

Let me close my opening remarks by thanking our loyal readers for their time and interest in our newsletter. As always, let= us know what you think!

Don't ignore= the lessons of history

by Margaret = Purvine <= /b>

As regular rea= ders of our newsletter, you can't help but notice our fondness for quotes.= As I have listened to the business news, the wild market swings, the political finger pointing, and a variety of proposed and possibly dub= ious fixes, there is one quote that comes back to me. "Those who igno= re history are doomed to repeat it." This is not really accurate. T= he correct words come from George Santayana, from Reason in Common Se= nse, the first volume of his The Life of Reason. The real quote rea= ds, "Those who cannot remember the past, are condemned to repeat it."

Perhaps the current turmoil in our markets and the emoti= ons engendered are more correctly reflected by the word "doomed"= ;. I actually do not agree. As I have written several times recently, we n= eed to hang on to some perspective here. For example, I think it may temper = some of our panic to remember that unemployment during the Great Depressio= n of the 1930s was a staggering 25%, for quite a while. Ours is just sligh= tly about 6% nationally right now, just above 5% in Washington. Such knowledge, especially historic knowledge, will help us gain badly nee= ded perspective. We've been in financial fixes before and now have the advantage of hindsight, which is popularly believed to be 20/20. So w= hat caused previous crashes? What actions were taken and, most importantl= y, what worked and what didn't?

I had the opportunity last weekend to see an excellent special on Fox News. The program was "Saving Our Economy: What'$ Next?" Hosted by David Asman, it was an excellent overview of the historical steps that led us to where we are today. Contrary to polit= ical rhetoric, our current financial mess wasn't created in the last 8 yea= rs. Mr. Asman traces things back to the Great Depression, lists specific actions taken, then traces the next steps forward, the creation and eventual privatization of Fannie Mae and Freddie Mac, "community reinvestment" begun in the Carter administration, huge increases= in government spending, and failure to hear calls of alarm several times from members of the Bush administration. I am greatly oversimplifying things here. The point is that we should forget the rhetoric and check the historical facts. Mr. Asman's excellent program is a pretty good starting point and I urge my readers to check it out. They plan to re-broadcast the special on Saturday, October 11, at 6:00 PM Pacific. They also made reference to posting the video on www.hulu.com, although it is not the= re yet.

One notable guest on the special was author Amity Shlaes, whose recent book, The Forgotten Man, reexamines the Great Depression. Traditional wisdom on the Great Depression maintains that things didn't turn around until FDR intervened with extensive governm= ent action and investment - the famous New Deal. Recent historical examination yields a different view. According to Ms. Shlaes, many actions taken at the time not only didn't help, but actually prolonged the Depression. I found her comments so compelling that I ran out and bought the book. It is excellent - clear in its analysis, offering extensive information and also a compelling read. I have not had time= to complete it yet, but am thoroughly enjoying it.

Here is a quote from her Introduction: "The big que= stion about the American depression is not whether war with Germany and Jap= an ended it. It is why the Depression lasted until that war. From 1929 to 1940, from Hoover to Roosevelt, government intervention helped to make the Depression Great. The period was not one of a moral battle betwee= n a force for good--the Roosevelt presidency-and forces for evil, those w= ho opposed Roosevelt. It was a period of a power struggle between two sectors of the economy, both containing a mix of evil and virtue. The public sector and the private sector competed relentlessly for advant= age. At the beginning, in the 1920s, the private sector ruled. By the end, when World War II began, it was the public sector that was dominant."

My point here is that in our current financial crisis, w= ith an election looming, we absolutely cannot rely on political platitudes and sound bites. Before voting, we need to fortify ourselves with fac= ts and think about our situation in business terms. Then we can vote with logic as well as emotion.

I will close with one other well-known saying. Be careful what you ask (or vote) for because you may get it.

Next Step in= the Press!

by Margaret Purvine

We have had two more columns printed in the Puget Sound Business Journal since our last eNewsletter! In case you missed them, here are excerpts from each to pique your interest. Click on the t= itle to read the entire article. Please remember that our articles are only available online to print subscribers during the first 30 days a= fter publication. After that time, they are available to all. As always, we welcome your comments and appreciate your interest!

Suc= ceeding as a new manager - wisdom from the trenches "Stepping in= to management for the first time is a huge challenge, whether you are an entrepreneur hiring your first employees or a corporate employee movi= ng up. The biggest obstacle we face is simply not being prepared. It is a common misconception that as long as you can do the work well yoursel= f, you can seamlessly transition into managing a team doing the same wor= k. Not necessarily."
Read complete article...

Common sense and staying the course in tough times "The past two weeks have been wild in the business world. Some of the pillars of Wall Street have fallen and the government is scrambli= ng to pick up the pieces and prevent additional breakage. The taxpayers = are groaning as the abacus beads fly, adding up the tab. The politicians = are doing what they always do - point the finger and blame everyone but themselves. It's the fault of the other party, the current administration, the lack of regulation, the wrong kind of regulation, and, of course, the big, bad, greedy CEOs. The regular folks, stirred= up and frightened by what many don't fully understand, demand action. And action there will be! But will it be the right action?"
Read complete article...

Announcement from Next Step

Next Step is pleased to announce that our financial consulting division has been acquired by CFO Selections (CFOS). As pa= rt of that acquisition, Next Step's founder, Dennis Purvine, has joined = CFOS as a senior associate. We wish him well in his new position!

Next Step Solutions will continue to operate, offering management consulting and business information products. You will continue to receive our eNewsletter as well future announcements of seminars and products as we continue to evolve and grow.

To read the official press release, please press here</b

Free Resourc= es from Next Step

Great source= s of business information and commentary

Next Step Blog - Business in Washington
As many of you may know, we had a bit of a technical meltdown with our blog. It is back up and online and still chock full of ideas, tips, a= nd business commentary. Hope you will check it out and leave your though= ts in the form of comments on our blog entries.

Next Step Solutions Business Book List
We are avid readers at Next Step. So it naturally follows that we wou= ld have an extensive library. Our book list is where we can share it with you. Check it out! =

Words of Wis= dom <= b>

Quotes from movers and shakers

"True gen= ius resides in the capacity for evaluation of uncertain, hazardous, and conflicti= ng information."

Winston Churchill

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