Wednesday, October 8, 2008

The Diminished American Brand

As a follow-up to my earlier post, I thought it important to note that what has suffered most is the American brand. What this means is that people inside the country and those around the world no longer view America as having the same attributes that it ones had. America was a place of enormous opportunity, wealth and creativity. There was nothing we were afraid to do, and little we could not accomplish if we put our minds and resources behind it. That was the perception, real or imagined, and people responded. It was no surprise that at one time a large portion of those founding Silicon Valley companies came from other countries, drawn to the US because of capital and our willingness to invest in potential. We were not a country looking toward the past, but one always looking to the future.

This economic mess has unraveled that brand. We are now looked at as being reckless and greedy. The same attributes that were respected are now looked at from a different perspective and they don't look very good.

Why should this matter? Brands differentiate and create desire and behavioral action. People buy, they invest, they join, etc. What will happen when people do not believe in our markets? What will happen when the best and the brightest from around the world no longer want to come here? What will happen when the dollar is no longer a currency that people covet and benchmark?

The other issue is that brands are always judged within a context of competitive offerings. We have now helped to elevate the brands of places like China, Brazil and India. They have serious problems, but they have future upsides that to many appear much more appealing than the US. This is sad.

Can we reverse this problem? Yes, brands can be rebuilt when the foundation of what made the brand great in the first place still has substance and perceived value. The next president will be the leader of brand America and will have to regain the confidence of those inside the country first and then regain the confidence of those outside the country. It won't be easy. We have a deficit of mammouth proportions--almost unimaginable. The Bush Administration has left us in shambles economically and with few friends around the world. Most of the world is smiling that the arrogant Americans are getting knocked down a notch. The smile would be larger if we weren't taking the rest of the world with us.

What the Hell is Happening?

As we go through an economic meltdown, the US Congrees has brought before it the CEOs of several companies that were directly involved with the economic crisis, including Lehman Brothers and AIG. Others will follow.

The CEO of Lehman sat there calmly and defended his salary of nearly $60 million and disputed the contention that he had taken $400 million from the company. "I only took out about $250 million", he said. Well, now everyone feels a bit better and a little more sorry for him!! Thousands of Lehman employees have lost their jobs, the bad debt accumlated by Lehman has helped create our worst economic disaster since the Depression, and a CEO has the nerve to sit there and argue over his millions in salary and bonus. Never mind that this fellow should be in jail for giving false information to investors just weeks before going bankrupt. He was dealing with the best information available? Yeh, right! Is he that inept or does he have such poor financial managers that he would make such an aggregious mistake? Or, perhaps he is lying. Ya think??

Next came AIG and the fingers really started to point in all directions. Hank Greenberg, the former CEO blamed the most recent CEO, who blamed everyone else other than himself. Now we hear that AIG took the taxpayers money and held a $400,000 event. These people should be forced to give back every cent and also be investigated for fraud.

What the hell is happening in America right now? Our ills are causing a global economic crisis, but most importantly, our ills are creating a new lack of trust and decline in esteem for American capitalism. When Republicans who fought Franklin Roosevelt on social security, claiming it was socialism, have to support a government bailout of Wall Street, you know things are bad. Whether the $700 Billion infusion will work is not yet known. The continuing bad news each day is now creating a mental situation that expects things to get worse, and perceptions are the same as fact in the marketplace--expecially when one isn't certain of what the facts might be.

I do not know all of the facts--no one does. But this I do know. There has been a lot of wrongdoing and our entire system will pay the price. By our system, I mean the interrationships in our economy that are built on trust. We don't know who to trust now, so we don't trust anyone. When trust evaporates, so do investments, retail spending, credit, etc. The economy starts to unravel.

We all heard stories of 25-year olds on Wall Street with multi-million dollar condos, and a home in the Haptons. We have read about the e-mail from one who said "I hope we are all rich and retired when this starts to unravel". The sad thing is that many of them are still rich with money made from greed that has ruined the lives of millions of people.

If life were fair, the riches these people took would have to be given back or paid out through charities to benefit those who are in ruin. But, this is not Hollywood; this is reality. And it sucks!!!