Bear Sterns gets bailed out by JP Morgan Chase. The dollar hits a new record low against the euro. Consumer confidence take a dive. The nation has lost more than Eighty-thousand jobs in the last two months. A fragile day for President Bush to address the Economic Club of New York. Talking about being in the fire. But he was a pistol on that platform. Oddly, optimistic.
President Bush acknowledged that he, "…showed up at an interesting moment in an interesting time." An understatement at best. Pontificating on the business incentives and the stimulus package which he says will boost consumer confidence and drive job growth, he also spoke of the temptation of reacting too harshly.
The temptation he said, "..to put bad law into place." Warning against, "…overreacting with federal law and regulation," he spoke out against a massive Washington intervention, saying it would make a recovery more difficult. Clearly, however, the Fed and administration had to move. And whether they moved fast enough is the stuff of debate, but this idea of temptation caught my attention.
The temptation to overreact, the need for instant gratification and rapid correction in the markets. Politics and ideology aside, a thought to ponder. We live in a world where instant information has us in a knee-jerk reaction scenario. It’s not to say that our economic climate isn’t in the dumper, and I’m not advocating the policies of the Bush administration, but there is a point to be made.
Due to expanding technology, and the incoming stimulation in the news and in the markets, we tend to react immediately instead of taking in the information and just sitting with it. We see the DOW heading south and we run to the phone or the computer to make a change in our portfolio. This extends into our working lives as there is a perception that we are available 24/7. That insinuates that we can respond, react, rebut anything that comes our way in a flash. We get a phone call from a client in need on a Friday afternoon and the report is being e-mailed at midnight.
I think the temptation to overreact is the underlying story here; in life, the workplace and in business. A response based on overreaction to a piece of information is bound to be flawed. The deeper meaning for today is to take stock before pressing send or making that phone call. Too lofty a discussion for today, perhaps. Disclaimer – I don’t own stock in Bear Stearns.
