Recession and IBJ and Opinion and Economy and Publishing and Media & Marketing

Don't get buried by negative news

February 2, 2009

 If you're like me, you are feeling a bit beaten down by the storm of negative business news these days. Jan. 26 brought more of the same, starting with the announcement that Sprint, Home Depot, Caterpillar and Pfizer were dumping about 40,000 employees.

As publisher of a business newspaper, I'm involved in promulgating a lot of the bad news. But that doesn't make me immune to tiring of it.

As a news organization, we are obligated to report news that's important to our community and economy, whether good or bad. These days, there seems to be more negative than positive.

That doesn't mean we have to give in to it and be negative. We've got to look for the positive, even though at times it feels like we're looking for a needle in a haystack.

In one day last week, locally based Koorsen Fire & Security made an acquisition, Fort Wayne-based Steel Dynamics announced record earnings for 2008, and the local Rolls-Royce operation landed an Air Force contract.

There is good news to be had.

But even when there isn't, there is good reason to remain positive and be optimistic, without being Pollyanna about it. It always helps to keep things in perspective. Those of us who have been around awhile have survived a few periods of difficult economic times. In the nearly three-decade history of IBJ, I can recall the recessions of the early '80s and '90s, and the big market crash of 1987.

I'm not even including the crater that followed 9/11.

What's important to remember is that we recovered nicely from all those periods, and our economy got even stronger, bringing investors and businesses several years of growth and good returns. These things come in cycles. Granted, our current situation looks pretty grim. Some pundits and observers have even uttered the d-word: depression.

It's encouraging to remember that tough times bring out the best in people, and that means you and me. When our economy is challenged, American resilience and resourcefulness have heretofore always saved the day. I have good reason to believe those traits will save the day once again.

But here's a little warning: Let's not get carried away.

In prosperous times, we sometimes get carried away with ourselves, and the current financial crisis is an example we should take to heart. We wouldn't be where we are today if we hadn't let the mortgage business get completely out of control.

Mortgage vendors created and sold products that were too creative for their own good. They were so creative, a lot of people didn't even understand them.

Then, of course, people who couldn't afford homes ended up buying them, anyway.

The result: Banks and other financial institutions had on their books billions of dollars' worth of mortgage-backed securities with little or no value, and homeowners in record numbers experienced the wonder of foreclosure.

I hope we learned our lesson.

Meanwhile, it's obvious the time is nigh to bring our best skills and strongest talents to the table and make the changes at our businesses that are necessary to weather the storm and be ready when things start to turn around.

Use this time to get your house in order: Make those cuts you need to recapture your margins; be smart with your marketing dollars and target your audience; meet with your vendors to renegotiate relationships; and stay in touch with your customers, even if they've cut their business with you.

The businesses that remain visible and operate smartly will be the ones that make the most hay when the economic storm subsides. And rest assured, it will; it's just a matter of time.
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Katterjohn is publisher of IBJ. To comment on this column, send e-mail to ckatterjohn@ibj.com. 

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