Careless Talk Costs Livelihoods

One global economist has said we all have an acute case of SARS and we need to start talking ourselves out of it now. Listening to the chief economist of HSBC, Dennis Turner, speak at the Forum on Global Leadership conference in London, was akin to the weather in New York right now.

He told the audience of 200 or so executives and entrepreneurs, including Sam Palmisano, CEO of IBM, and Sir Digby Jones, chairman of the Confederation of British Industry, that we have all got a bad case of SARS. No, not the dreaded bird flu spread by swans and geese and the like, but Severe Acute Recessionary Syndrome.

Turner was in effect saying that the global economy is nowhere near as bad as we are all predicting and voicing. Yes, he admitted, the credit crunch is biting and the banks are taking a hit. But, every CEO, CIO and executive in the country is also a human being, and as such is also a consumer. And the problem lies when consumers believe that they should stop spending. So the more everyone talks up the doom and gloom and mentions the word recession, the more consumers believe it, and then it becomes a self-fulfilling prophecy. Which, Turner explained, is what is happening now across the globe.

Instead, Turner filled delegates’ heads with positive numbers: The recent labor statistics from the U.S. Department of Labor showed a marked decrease in job losses, and in the United Kingdom they are producing and manufacturing more cars than ever before; the Jaguar plant in Birmingham is one of the most efficient in the world. The big companies in our industry–IBM, Cisco, Dell, Microsoft et al–are stable and producing profits, and outside of technology other sectors and emerging countries are also doing well.

Turner warned though that the old-school method of protectionism is on its way out and the way forward for the economy on a global level is free trade, across borders and countries. He also urged western countries to give up on making commodity products and instead create things of more value.

With a more positive outlook and a much less melancholy approach, we may just be able to talk ourselves out of this downturn, the way we talked ourselves into it.