In many countries there is an intense debate to know if governments should stimulate economy by boosting investment or consumption.
It’s about two clearly different approaches : in one case you try to limit the effects of the crisis and their impact on household (and so on enterprises as a side effect), in the other you try to build the foundations for a perenial restart, helping enterprises to build the futures.
Logically, when people and enterprises suffer what’s needed is to calm the pain down. But it prevents from dealing with the deep causes. If the causes are targeted, it helps to build better tomorrows but the effects will came later and in the meanwhile it hurts.
There is no miracle solutions. In an ideal world, people would prepare the future when everything’s all right and keep resources to kill the pain when it will come. In the real world, nothing is done when things are right (of course…since there’s nothing wrong so why change), people refuse to see the limits of the current situation et when things collapse so much resources are needed to fight the pain that nothing is left to deal with the deep causes and think long term;
That’s not without making me think of what happens to enterprises. An obsession for short term that makes them focus on local miracles when a global approach would be needed. By not looking further than the end of their noses, enterprises can only be affected without being able to anticipate. Nursing without really fighting the disease.
Criticizing people is a too easy thing ; if they act this way it’s becasue it’s what they’re asked to make them focus on what’s immediate instead of the core of things. So when something unforeseen happens (and unpredictability is the very nature of today’s economy, one of the key characteristics of knowledge economy) they can only react because anticipation is not in the management DNA.Â And the resources that are used to react are not available anymore to anticipate when things become more calm. Endless recuring process.
This propensity to be permanently off-beat is one of the causes of wild fluctuation economics and enterprises experience regularly. It’s called cycles. The good news is that a negative cycle always ends one day. The bad news is that so do positive cycles.
consommation, court terme, crise, investissement, long terme, relance