Resolve to use common sense in 2009

My Turn by Dr. John T. Whiting Do you want 2009 to be better than 2008? Many of the problems of 2008 can be blamed on a lack of common sense. This is true for us and for the problems facing our economy today. The real estate and financial troubles were no surprise. Most property owners and mortgage bankers celebrated the rise in real estate values knowing it would not last. Business leaders had a choice, to use common sense knowing property values were due to decline or offer mortgages to borrowers with poor credibility to buy overvalued homes. Many hoped to gain quick profits by offering high risk borrowers adjustable rate mortgages with very low initial premiums which would balloon to a rate the borrower could not pay, leading to only one outcome, the need to foreclose on the property. Did that make sense? The problems facing the Big Three automakers are not new either. They can be traced, in part to a marketing and sales model that manufactures cars without relationship to demand. This defies common sense. Cars are manufactured to fill dealership quotas, causing a perpetual over-supply. This has created the need for expensive TV ads featuring sales gimmicks offering “cash back,” “no interest,” “no money down” and “get the employee price.” Today there are millions of new cars lying idle on dealer lots. To survive, the Big Three must adopt a common sense business model that links manufacturing with market demand. They must take a businesslike approach in pursuing business solutions to their problems such as used by other manufacturing companies facing cash flow problems. For example, the retail industry is challenged by today’s poor economy. To meet the challenge they have discounted prices, in some instances by as much as 70 percent to attract buyers. If the Big Three followed suit, it would offer the potential to generate new revenues valued in the billions of dollars and provide the cash flow to finance their restructuring, making a federal bailout unnecessary. There are other benefits. It would stimulate consumer spending, which experts say is critical to our economic recovery. We are often quick to criticize others for not using common sense, but what about us? As individuals we too tend to make decisions that defy common sense. We buy “junk” foods we know will cause weight gain and increase our health problems, we smoke when we know smoking is a prime cause of many health problems, we apply for and use credit cards that undermine our financial security, we engage in silly arguments over trivial topics that undermine our relationships, and we neglect to tell those we love how much they mean to us. How can we use common sense in 2009? It is simple. When making a decision regarding important issues, just ask, “Does this make sense?” Then have the strength to go with what our gut tells us. A little bit of common sense can go a long way to improving our lives in 2009. Dr. John T. Whiting of Vernon is a freelance writer, photographer and the founder of E-Business Management Consulting (www.e-businessmangement.com).