The election results are now in and many conservatives and Republicans are disheartened.
The hope that many of us had that the nightmare of the Obama presidency would end faded into the night on November 6th. In reality though, "hope" was not very much of a plan.
In the experiences that I have had assisting companies and organizations avoid bankruptcy, there is a very predictable pattern organizations face when they are facing serious financial problems.
The pattern involves economic growth and prosperity followed by a tendency to overspend. From overspending and excess comes a denial that anything must change. From denial comes failure. If the failure is accepted and dealt with growth is restored and the cycle begins again. If failure is not accepted, the organization will cease to exist.
The sheer disappointment and almost melancholy reactions to the Obama reelection made me realize that American people are no different in their reactions than the employees and managers of the companies that I am attempting to restructure and save.
In any plan to resurrect an economy as Mitt Romney proposed in his five point plan, a majority of people must first come to grips with the reality of the difficulties that they face. While the difficulties may have been obvious to those of us who describe ourselves as fiscal conservatives the election results of convinced me that the American people have not yet reached that same conclusion.
Typically in most bankruptcies, there must be some catastrophic event to convince the vast majority of people that they are really in much more serious difficulty than they really thought they were. We apparently are not there yet in the United States. Reality has not yet set in
Equally as problematic for a financial rescue of our economy was that 13 million fewer people voted in 2012 compared to 2008.
The significance of that apparent apathy is that such apathy typically precedes a collapse in an economy. Apathy can actually accelerate financial problems which subsequently starts the process of dealing with the serious problems. In financial turnarounds, we call it the "calm before the storm"
The transition from apathy to a cataclysmic event occurs because the disaster is "allowed" to occur because so many people are apathetic. Problems are simply not with which then causes the collapse.
In the United States, the analogy would be a transition from engagement of our people searching for hope in the 2008 election of Obama to the apathy in the 2012 election. The false sense of security that all will be well or that things are not as bad as they expected them to be was prevalent. The preponderance of support Obama had from blacks, single women and Hispanics may well reflect the paralysis of these groups due to fear of the uncertainty that exists in the economy.
Once the apathy and fear reaches a crisis point by some event in the next few years, our next election, probably 2016, will deal with the unmitigated disaster of the irresponsible fiscal spending this nation has been engaged in for decades.
Once this cataclysmic event occurs the transition will begin. After the crisis, most people willingly accept the difficult solutions that were unfathomable only months earlier.
In the case of the U. S. economy, the change that will take place will be the recognition that only by accepting personal responsibility and accountability will our system ever correct. If personal responsibility is not accepted, collapse of our Nation, as we know it, is inevitable.
The process that I describe above is precisely what happened during the collapse of the Soviet Union. I also experienced the same process in Poland, Romania, Bulgaria, Slovenia, and Belarus. Some of these nations have fared well and some have not dependent upon the strength of their leaders to solve the problem or merely to provide a temporary fix.
The nations that fared well have had leaders who understood that simple, quick fixes provide only temporary "solutions" and that serious solutions require systemic changes to society.
A restoration of a free enterprise system with the right of self-determination is essential to survive after the collapse. Free enterprise provides the fuel to the economic engine.
The basic framework of free enterprise once existed in United States and it is a principle which our people typically understand and embrace.
For example in the United States, we have bountiful natural resources. We generally have a well-educated workforce. We have many baby boomers who are preparing to retire which will create job opportunities for the younger generation.
The self correction will require that we combine these tremendous assets to counter the negative effects of structural problems in our economy such as public-service unions, unfunded pensions, immigration, and all those of issues that we have pushed off to another day to solve.
In Alan Greenspan’s book, "The Age of Turbulence" he describes the continued volatility of the world’s economies in the 20th Century. In virtually every instance, the countries went through a period of growth, then excess, then denial, then failure, and finally some semblance of rebirth.
For us, Gov. Romney was the perfect candidate but at the wrong time. Unfortunately for majority of voters they do not quite understand how serious of predicament we are in. We are going into a full stage period of denial. Gov. Romney was just four years too early.
I am very optimistic of the long term for as happened with our founding fathers, we, too, will have the renewal and rebirth of America and the American dream early in the 21st-century.
We are a creative and vibrant people who believe in Life, Liberty and the Pursuit of Happiness. Those three magical ingredients will fuel our rebirth.
Col. Frank Ryan, CPA, USMCR (Ret) and served in Iraq and briefly in Afghanistan and specializes in corporate restructuring and lectures on ethics for the state CPA societies. He has served on numerous boards of publicly traded and non-profit organizations. He can be reached at [email protected] and twitter at @fryan1951.