Leadership failure and control things we can control

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The handling of #pandemic in the USA is unthinkable a few years ago. But at the same time, it’s not totally uncharted territory as in my last 20+ years here in the US, I have seen at least 3 major incidents or economy crisis following it.

One is the dot com bust, then followed by 9-11-2001, those two are not directly related, but it’s a transition between Clinton administration to Bush administration, things fell through crack. I recall the 16% layoff at my company on 10-11-2001 (a month after 9-11), and the cry from my coworker that being laid off that day. Again the bigger layoff was due to the fact our company acquired a competitor, thus the redundancy. Note the air travel become much more strict since 9-11, before that I can go to airport terminal to send off or to greet family or friends. Now we need to take out laptop, iPad, take off coat, belt, and shoes. Basically the implicit trust between people were lost.

Anyway, Bush administration handled the initial crisis fairly decent, until it started invading Iraq, which has huge legal, moral, economy and human cost. But the US economy largely recovered and grew under Bush with a few glitches such as the handling of Hurricane Katrina, etc. Then in 2007, 2008, the housing crisis started to unravel, as shown in the documentary / movie: too big to fail starred by Hank Paulson. I watched it again recently and it reminded me of the days when CNBC does this crisis show in the evenings, and some weekends / Sunday were mostly working sessions for big guys in Wall Streets, and Fed / Treasury dept, and then some banks either went under or got bought. The most recent event reminds me some of that too.

But the #pandemic mismanagement is another level. Basically the US has about 2 months to prepare, and the federal government lost all this due to poor judgement and shear stupidity. Also unfortunately some people in the US has similar IQ as the guy in the WH. So basically politics got in the way, and the society suddenly stopped schools, and office work in mid March. And the unemployment, and pain to people in hospitality and small business is unimaginable (36 million people unemployed). The only thing that alleviate the pain a bit is the government (esp fed) realized the issue and basically started flood the money to the system, and the stimulus from congress esp. on PPP (payroll protection plan), bail out of airlines (similar to PPP, basically pay airline employees through the end of Sept).

Now, back to us, things we can control. No. 1 is still social distancing, good hygiene (hand washing, hand sanitizer, mask, social distancing). On personal finance side, if we don’t have a lot of spare cash, we need to manage our cash flow carefully, and be creative. The goal is get fed, be healthy (mind and body). Don’t raid the 401k or IRAs, if possible. Apply unemployment or PPP (small business owners). Contact the food banks if needed. Sell unused items on eBay or other sites. Cut cable TVs if applicable. There are still jobs at Amazon, or Walmart, just make sure you have enough PPE (mask, hand sanitizer) etc. Also, it’s never too old to learn about personal finance. My sense of people lack of saving is two fold: 1) The income is low, paycheck to paycheck; 2) The math can be improved. So focus on that, see if one can save $10, or $20 a month. If it’s $30 a month, it will be $360 a year, and there was a report saying 40% of Americans don’t have $400 in bank. So basically one can beat almost 40% of the people by saving $33 a month.

For me personally, this is the first financial crisis since I have two kids. I am older, and have a little more savings (due to the sale of condo recently). I am earning a bit more from work too (that part is not given). And personally I felt more confident on stock market (this is not given either, as I usually only long stocks. I have some winners such as $OKTA, and losers such as $DIS). Surprisingly I am not overly worried. Probably due to the fact I had been through layoffs and etc. Probably because I am older and wiser 🙂

Control things we can control

This is actually from my former CIO at arch coal, Dave Hartley. Arch Coal was in a pretty bad financial situation when I was there, 2011 to 2012. The company was cutting cost and our CIO was using that motto to encourage us. And I think it’s very much applicable today. I also recall Warren Buffett famously said “don’t bet against American”. My takeaway is majority of Americans are fair minded, decent, willing to work hard given opportunity, some have good entrepreneurship, and so on. I don’t want to put an cliche here: together we can win. But the reality is we are dealt with the cards we were dealt with. We can make the most / best out of it. We cannot change the cards.

Bonus read: so in summary, for 9-11, I think both President Clinton and president Bush bear responsibility. For 2008 financial crisis, President Bush. Pandemic, we know who to blame (hint: not China or Bill Gates 🙂

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