In January, I started to say that we should stop calling it the “Greek Debt Crisis” and start talking about it being the potential death rattle of the Euro.  In August, I suggested a 30%-60% chance the Euro would collapse.  A couple of weeks ago, when the “Euro solution” was widely trumpeted in the media, people who knew of my view of the situation sent me links about it.  Not so fast, I said.  This is not the final answer; it is a temporary delay of inevitable further mass meetings of politicians to try to save face.  There was no solution there, just an agreement to move forward and hope to arrive at one.

I have long suggested that the Eurozone should allow Greece to become the third-world country it seems to want to become.  When was the last time the terms “innovation,” “strong work ethic,” or “growth economy” were accurately used in the same sentence as “Greece”?  In a country where 10% of the work force is employed by the government, ...]]> The Eurozone is a mess.  Mathematics, common sense, recognition of a changed reality, and, yes, democracy have all taken a back seat to a deep-seated, ego-related loyalty to a broken idea from the 20^th century.  This is one of a number of situations today where legacy thinking from the last century is propping up institutions and ways of looking at the world that will soon dissolve in the face of new forces and ways of thought of the 21^st century.

In January, I started to say that we should stop calling it the “Greek Debt Crisis” and start talking about it being the potential death rattle of the Euro.  In August, I suggested a 30%-60% chance the Euro would collapse.  A couple of weeks ago, when the “Euro solution” was widely trumpeted in the media, people who knew of my view of the situation sent me links about it.  Not so fast, I said.  This is not the final answer; it is a temporary delay of inevitable further mass meetings of politicians to try to save face.  There was no solution there, just an agreement to move forward and hope to arrive at one.

I have long suggested that the Eurozone should allow Greece to become the third-world country it seems to want to become.  When was the last time the terms “innovation,” “strong work ethic,” or “growth economy” were accurately used in the same sentence as “Greece”?  In a country where 10% of the work force is employed by the government, where tax avoidance is an embedded cultural practice, where the 3-hour lunch is common in spite of a 24/7 global economy, what were the Europeans thinking?  They weren’t.

Each time Greek debt repayment guidelines and economic metrics have been set forth, they have always turned out to be no longer valid.  Greece is in a downward economic spiral, and there is clearly no way the massive amount of accumulated debt can be repaid in the foreseeable future.  The Greek people know this.  There is no question the Greeks lied to get into the Eurozone, lied about their government budgets, and then lied about their ability to make rapid changes to their economy to repay the debt they received through their deception and the greed of the European banks.

The answer has been clear for months.  To avoid the real threat of a financial contagion that spreads to Italy and Spain, the plutocrats spending hours negotiating should have done the obvious: They should have stated that since Greece was clearly in violation of all terms so far negotiated, they were being jettisoned from the Eurozone; AND, they should have indicated that the dramatic increase in funds to prop up the region was being redeployed to erect a firewall around Italy and Spain.  Cut the losses, stop contagion in its tracks, and get on with fortifying the banking system.

The Greek government, with loud demonstrations and strikes a weekly occurrence, briefly floated the idea that the Greeks should vote on whether to accept the onerous terms of debt repayment – which will ultimately destroy their economy in the name of protecting the banks – or returning to the drachma and suffering some short-term severe pain for long-term growth and independence, what do you think they would have done?  Why shouldn’t the Greeks vote for self-rule, rather than imposed rule of other countries primarily interested in preserving their banks?  So once again, the can has been kicked down the road, the markets swoon in reaction, and we are left with a situation that will only worsen and drag out the misery.

The old guard – in age and thinking – that architected the Eurozone would not accept reality.  More than two years ago internal IMF reports said that Greece was effectively bankrupt.  Instead of dealing with that reality then and there, they made all worship at the altar of devotion to the Euro above all else.  Now two years later there is more indebtedness that has had the effect of both spiraling the Greek economy into severe recession and also putting the banks of Europe – and therefore the global economy- at great risk.

What we are seeing here is the legacy thinking of the 20^th century keeping European leaders from facing the financial realities of the 21^st century.  What sounded like a noble idea – unifying a continent to better compete with the United States and the emerging China – was born from a late-20^th century world view. That is still valid.  The problem was thinking the next step – a single currency – would be manageable. Rules for membership and debt levels were legislated and then universally ignored for the sake of the vision of an ever-growing Eurozone.  By not seeing clearly, by not enforcing the rules set forth, the leaders of the Eurozone find themselves in an untenable situation.  They can hold on to a vision that no longer works and force the entire Eurozone into a half-decade of no-growth due to massive deleveraging, or they can move swiftly to jettison Greece, shore up Italy and Spain, accept downgraded credit ratings for a couple of years, and emerge in 2013 with something that could in fact be a powerful economic and financial force.

Sometimes dire situations necessitate humor.  While this clip is humorous, the numbers are basically accurate.  Truth in humor.

Since the collapse of Lehman Brothers almost three years ago, a number of people who had recently lost jobs due to downsizing, bankruptcy and lack of funding, have asked me where they should look for jobs.  My answer has been consistent: become your own job.

What is it that you love?  What is it that you are good at? What are your most marketable skills? What is your greatest value to the marketplace? If you stop and think about it, there should be a lot of overlap in the answers to these questions.

It is time to become the job you are.  It is time to embrace being a free agent.  It is time to be a one-person company.  It is time to let go of the concept that there is a job out there that provides security.

As early as late 2008, I forecasted that the unemployment rate in the U.S. would push through nine percent and perhaps reach 10 percent.  I further suggested that the country would stay close to these historically high levels of unemployment for ...]]> It is time to slowly say good-bye to the “job” as it has been known in our lifetime and the lifetime of our parents.  The parents of baby boomers were the first full generation that lived with the general concept of “life-long employment.” Baby boomers left college and stepped on lower rungs of a “career path.” Now, after three consecutive “jobless recoveries,” it should be clear that jobs as we had defined them are disappearing.

Since the collapse of Lehman Brothers almost three years ago, a number of people who had recently lost jobs due to downsizing, bankruptcy and lack of funding, have asked me where they should look for jobs.  My answer has been consistent: become your own job.

What is it that you love?  What is it that you are good at? What are your most marketable skills? What is your greatest value to the marketplace? If you stop and think about it, there should be a lot of overlap in the answers to these questions.

It is time to become the job you are.  It is time to embrace being a free agent.  It is time to be a one-person company.  It is time to let go of the concept that there is a job out there that provides security.

As early as late 2008, I forecasted that the unemployment rate in the U.S. would push through nine percent and perhaps reach 10 percent.  I further suggested that the country would stay close to these historically high levels of unemployment for years. This reality is only now being discussed and accepted.  Two years ago, this forecast was doubted.  What led me to make this forecast?

The social concept of jobs, careers and companies really developed over the last 300 years in the Industrial Age. Before the invention of the steam engine, the centralization of industry, and the urbanization of the developed countries, people were artisans, cobblers, blacksmiths and farmers. One apprenticed with a master and gradually learned the trade. Craftsmanship and high-quality work were prized; scale was small and individualized. People plied their crafts on a one-to-one basis.

The 100 years from the Civil War through the 1950s was a time of scale, mechanization, centralization and the creation of vertical hierarchies that rapidly became bureaucracies. People started at the bottom, or if they had a college degree, slightly above the bottom, and over time, moved up the career ladder in a life-long sequence of promotions, often moving wherever the company told them to. The apotheosis of this was post-WWII America, with its triumphant manufacturing power that was the envy of the world.

The 1970s ushered us into the Information Age – with computers and communications satellites – and started the transition from production of goods to the generation of information at ever-increasing rates. An economy based on atoms was ceding to an economy based on digits. Waves of technological innovation across all sectors of the economy provided us all with moments of Toffler’s “Future Shock.”  The future kept showing up and altering our life, work and behavior.

The last decade of the 20^th century, with the collapse of the Eastern Bloc, unleashed globalism and the global economy. Work began to transcend national boundaries. The birth of the Internet launched the connectivity revolution, which is playing out to this day. Technology moved from the desktop to the briefcase, and now to the pocket. It moved from the office to the home. The clear consumerization of technology is flowing through the global workplace.  People can now sit in a coffee shop or on a park bench and run companies, create products, collaborate globally.

In the Industrial Age, machines replaced manual or blue-collar labor. In the Information Age, computers replaced office or white-collar workers. Hardware and software replaced people doing jobs.  The Internet connected the world, so the lowest-cost producer became ascendant. Now in the Shift Age, all is in a state of shift. Instead of hierarchies, silos and vertical management structures, we are becoming a global net of connected work.

Jobs have less and less value, which is why people who have lost their jobs in the recent Global Financial Crisis cannot find jobs that pay the same as the ones they lost. It is time to let go of the concept of a job and think of becoming a node in the global network of commerce, of creativity.  What might be your highest value to others? What is your greatest passion? What is it that you do well?  What can you give to others in the connected global economy that will give you money in return? What is your innovative idea? In the Shift Age, wealth will flow from IP, intellectual property. What is your IP?

Stop looking for the “job” that is increasingly hard to find. Create your own job.  Become the job you are.

In 2007, I forecast that humanity, and particularly the developed countries of the world, would enter the “reorganizational recession of 2007-2010.” Considering that this is a blog that looks into the future, it might seem contradictory to be looking back at this event, but by doing so, I can explain why it was accurate and why understanding it will help us better navigate and understand what lies just ahead.

The reason for the length, breadth and depth of the 2007-2010 recession was that it was a reorganizational recession between the Information Age and the Shift Age. Most economists look at recessions through the eyes of history, measuring whatever recession we are currently in against past recessions. Phrases such as “this looks to be another jobless recovery similar to the recessions of the 1990’s” or “the recovery will be on the back of the consumer – when the consumer starts spending, we will emerge from this recession” (both paraphrases) are common and represent economists looking at economic downturns purely through economic filters. That is why they have had to keep revising ...]]> In the last column here, I pointed out that a number of my Shift Age forecasts have come true. I wrote about several of them and how I get an odd sense of déjà vu when these forecasts become reality. In this and coming columns, I will revisit them – not to gloat, but to provide explanation, because people read and hear forecasts differently from explanations of the actual events they become.

In 2007, I forecast that humanity, and particularly the developed countries of the world, would enter the “reorganizational recession of 2007-2010.” Considering that this is a blog that looks into the future, it might seem contradictory to be looking back at this event, but by doing so, I can explain why it was accurate and why understanding it will help us better navigate and understand what lies just ahead.

The reason for the length, breadth and depth of the 2007-2010 recession was that it was a reorganizational recession between the Information Age and the Shift Age. Most economists look at recessions through the eyes of history, measuring whatever recession we are currently in against past recessions. Phrases such as “this looks to be another jobless recovery similar to the recessions of the 1990’s” or “the recovery will be on the back of the consumer – when the consumer starts spending, we will emerge from this recession” (both paraphrases) are common and represent economists looking at economic downturns purely through economic filters. That is why they have had to keep revising their forecasts. The Great Recession of 2007-2010 was more than just a bad economic recession; it was a reorganizational recession.

When the world drifted into recession in 2007 and then went into economic free fall in the fourth quarter of 2008, I said that it was not only reorganizational but that it would last longer than any recession in memory.  I also said that it represented a transition from the largely 20^th-century way of doing business to the new 21^st-century reality of the global economy. The analogy I’ve used is the 1970’s, and the multiple recessions that occurred from 1973 through 1982. During that time, the developed countries of the world went through the very painful reorganization from being purely Industrial Age economies to becoming Information Age economies.  Economies based on atoms to economies based on digits. This took a decade to occur.

The accelerating speed of change suggested to me that humanity would pass through a period of five or six years and would emerge economically into the Shift Age. Some economies will emerge in 2011 substantially different from what they were when they entered the recession four years ago. Entire industries have entered the creative destruction phase. New dynamic business sectors based on the accelerating electronic connectedness of humanity have taken root. These are Shift Age companies. New businesses based on non-physical realities are now thriving.  They are Shift Age companies. The ascendancy of entirely new businesses and business models is the reality today, just as it was in the 1980’s, after the decade of economic upheavals between the Industrial and Information Ages.

Hundreds of CEOs and business leaders have told me that this concept of a reorganizational recession is the context that has helped them understand the disruptions they confront in the marketplace. When asked, “When will things come back?” my answer has always been, “They will not come back.  It will get better, but it will be in different forms, shapes and ways.”

Oh yes, remember that chestnut that we will exit the recession when the consumer starts to spend again? Since 2008, I have strongly said that “thrift will be the new cool, the new extravagance” and that the consumer has been scarred, and this scarring will last for years. I have continually forecast that consumers will not lead countries out of recession as quickly as they have in the past. The parents of the early-stage baby boomers lived through the Great Depression, and that scarred them for life. It affected the way they looked at the world for the rest of their lives. Well, consumers in general – and in particular, the American consumer – have been scarred by the Great Recession of 2007-2010 because the things we believed in, such as ever higher real estate values and ever increasing 401Ks, were proven false.

The Shift Age is about saving more, living with less, owning less, living in smaller homes, driving smaller cars, having fewer physical goods and more digital goods. Growth for the sake of growth – an economic axiom prior to this reorganizational recession – is now seen as hollow in a world whose very existence depends, to some degree, on sustainability.

As we emerge from the Global Recession of 2007-2010, we see a changed landscape from what existed before. Welcome to the Shift Age!

As a futurist, part of what I do is to present the future to audiences and readers around the world.  Presenting a vision of the future, making predictions and developing forecasts is what a futurist does.

Regular readers of this column know that since last September I have presented you with a number of economic forecasts and predictions.  There has been a constant flood of economic information and revised predictions in the media.  Economic forecasters seem to be rushing to revise their forecasts of just a few months ago to try to stay ahead of the tsunami of bad economic news.  In this environment I thought I should take a look back to see how accurate my forecasts to you have been.

I take great pride in my ability to make correct forecasts and predictions for you my readers, to the audiences I address and to the clients I advise.  In this case the correctness of my predictions are, unfortunately, extremely accurate.

Last fall, in a column titled “The Collapse of ...]]>

As a futurist, part of what I do is to present the future to audiences and readers around the world.  Presenting a vision of the future, making predictions and developing forecasts is what a futurist does.

Regular readers of this column know that since last September I have presented you with a number of economic forecasts and predictions.  There has been a constant flood of economic information and revised predictions in the media.  Economic forecasters seem to be rushing to revise their forecasts of just a few months ago to try to stay ahead of the tsunami of bad economic news.  In this environment I thought I should take a look back to see how accurate my forecasts to you have been.

I take great pride in my ability to make correct forecasts and predictions for you my readers, to the audiences I address and to the clients I advise.  In this case the correctness of my predictions are, unfortunately, extremely accurate.

Last fall, in a column titled “The Collapse of the Third Economic Wave” I forecast that the 40 year ever upward growth of consumer spending as a percentage of the GNP would fall.  There is no question this has occurred and there is absolutely no suggestion this will change course for at least the next two years if not for longer.

In October I predicted that “Thrift will replace extravagance” and that “Thrift will become the new cool”.  Any question here?  Just ask all the bankers who have taken business junkets in the past few months.  Listen to all the people who, with pride, talk about driving cars that have over 100,000 miles on the odometer.  Hormel is now running three shifts seven days a week in the factory that makes Spam

In early January I predicted that employment in the U.S. would: “show a topping out at around 9-11% sometime during the second half of the year.”  At the time even the Fed was suggesting an 8% top.  Well it seems that I will be correct in my prediction.  By the end of the first quarter of 2009 we should be close to 8%, the top of what most forecasters has suggested for the 2009 high.  The unemployment numbers will not slow for the next few months.

In November, standing alone, I predicted that there would be 6-9 months of deflation.  This one was hard for many people to even wrap their minds around as we have all been conditioned to constant inflation albeit at varying single digit levels.  Well, as I look at the numbers and at what I see as I travel North America, nothing is more expensive than it was a year ago.   Part of this reality is the collapse of the third wave mentioned above.  Consumers are just not spending as the household savings rate has, in the last six months, climbed from a negative .5% to a positive 3.5%.  In a holiday season where 50-70% off was the norm, few consumers buy products that are not on sale, putting additional pressure on prices.  This deflation could well continue for the remainder of the year.

In January I predicted:  “Retailing is in a free fall.  There will be numerous bankruptcies in the U.S. and around the world in the first quarter.  Lead by the apparel sector, many chains will either declare bankruptcy or will close numerous stores”.  This one was easy to predict amidst the retail desperation of the holiday season and has of course been proven true.

As for the real estate sector I forecast:  “We have been living through the collapse in residential real estate for the past two years.  Now we will live through a huge downturn in retail and commercial real estate.  Shopping malls will be shuttered as vacancy rates soar and significant commercial properties will go into default, starting first with properties purchased with a lot of leverage during the past three years.  Loans will be called.  This will be a cleansing process of the removing excess leverage in these sectors.  Some cities will obviously fair better than others.”  This of course is starting to unfold.  The second quarter of 2009 will be a time of deepening trouble in these two major sectors as the media will move its negative lens of the world to empty shopping centers and office buildings largely vacant.  Every major metropolitan area will experience this.

In January I predicted that:  ”for most of 2009 oil will trade between $50-70 a barrel”  While this could still prove to be true, I think, fortunately for all of us, that this may have been an incorrect prediction.  Glad to have been wrong on this given the correctness of all the other predictions.  I now think that taking all the trading days of 2009 into account the vast majority of them will have oil trading between $35 – 55 a barrel.

It is important for a futurist to be correct more times than not in forecasts and predictions.  Unfortunately we have entered a very painful economic time, so the accuracy of these forecasts represents a truly painful reality.  I stand before you, painfully correct.

As all prognosticators look ahead to this new year, it is clear that the place to look for our financial future for the next couple of years is Washington, not New York .

Politicians of both parties and most U.S. citizens are so scared or nervous about the economy melting down even further that there seems to be wide support for the Federal Government to spend whatever is necessary to get us out of this mess before it becomes even more catastrophic.  I find it interesting that economists of all stripes have come together is a loose consensus that the way out of this dangerous economic situation is massive spending by the government.  I certainly don’t disagree, but I have significant reservations about what Congress will pass and President Obama will ultimately sign.

The position here is that if the U.S., and therefore to a great degree the global economy is ...]]> It is interesting that central to the U.S. view of the global economy is the inauguration of President Obama and the passage of a historic stimulus package by Congress.  Given that the world is awash in economic fear the potential for hope and a sense of direction has been hard to find.  Since the current economic meltdown is something we want to change, and since that word has been synonymous with Obama, there is a lot of hope for a good start to his Presidency, and in his stated desire for a $1 trillion dollar stimulus package over the next two years.

As all prognosticators look ahead to this new year, it is clear that the place to look for our financial future for the next couple of years is Washington, not New York .

Politicians of both parties and most U.S. citizens are so scared or nervous about the economy melting down even further that there seems to be wide support for the Federal Government to spend whatever is necessary to get us out of this mess before it becomes even more catastrophic.  I find it interesting that economists of all stripes have come together is a loose consensus that the way out of this dangerous economic situation is massive spending by the government.  I certainly don’t disagree, but I have significant reservations about what Congress will pass and President Obama will ultimately sign.

The position here is that if the U.S., and therefore to a great degree the global economy is to exit this great recession before the end of 2009 the stimulus package must be a uniquely crafted effort.  There are a number of dynamics that must be considered.

Speed If the stimulus package is to have any benefit in 2009, it must not only have a significant part of it passed in the first quarter, but that part must be deployed toward an immediate use of funds for job creation in the short term.  Of course there is much work to be done on the traditional infrastructure type of projects.  Much of this can be deployed at the state and local level, giving federal funds for major projects that are ready to go but lack funding.  Of course the old adage that haste makes waste is never more applicable than when politicians fund massive projects quickly.  The country cannot afford to waste money on traditional earmarks and pork barrel projects.  How to do this fast and intelligently is a major issue.

Transformation not Recovery. As stated here in the last two columns, we are in a transition between the Information Age and the Shift Age which means, ultimately a transformation to a new order, a new type of economy and a new vision.  What is lost can not be recovered.  The stimulus package should not be about just reversing the massive contraction into expansion but also about laying the ground work for new infrastructure and innovation, one that will set the stage for the transformative economy to come.  Such things as an infrastructure for the 21st century, focusing on high speed connectivity, a national electrical grid, and transfer and storage of renewable sources of energy must be included if this huge investment is to have any long term effect.

The issue with this of course is that this will take years to put in place and will not be part of a quick fix. However it is essential that a long term focus on the future economy of the U.S. must be addressed.  Innovation, promising new technologies and the development of IP related to technology and energy technology are America’s future and the future source of millions of jobs.  While this investment may not affect economic metrics in 2009 and even to a degree 2010, it is essential for the future of the country. An intelligent and future oriented balance must be struck.

Funding The need for the U.S. to sell hundreds of billions of bonds to fund this stimulus package comes at a time when the usual buyers are becoming much more reticent.  China will need to keep its capital at home more than in recent years to deal with its own economic slow down.  Saudi Arabia will need to monitor its investments given the collapse of oil prices.  This will mean that the U.S. Treasury may well have to offer higher than desired rates of interest to obtain the money.  This of course will put a long term pressure on both inflation and on our national debt and financial obligations which is fast approaching $58 trillion.  If we are going to significantly add to this unprecedented mountain of debt, we must invest wisely.  To not do so will just add to the economic probability of worse economic collapses in the future.

Oversight This is extremely important.  If this once in a lifetime stimulus package is not closely managed, highly transparent and constantly being recalibrated, then the U.S. may well be stimulating itself into a rapid national decline.  Just look at what has happened to the TARP program where some $300 billion has been spend, with things only getting worse and the banks given the money refusing to lend or support business who need the funds for growth.  The entire debt and credit economy on which the country lived for the last three decades is being cleansed and it will not come back for several years.

Tax cuts. While it is always a politicians dream to give tax cuts, at this time it will have much less stimulus affect than ever before.  Simply put, most Americans will take any tax cut to pay down debt, get caught up on mortgage payments and save for college and retirement.  After having lost jobs, having savings eviscerated and lost hope of retiring soon, tax cuts will not, as in the past, go for new bright shiny objects.

The short term economic health of the U.S. depends upon a speedy passage of an intelligent stimulus package.  The longer term economic health of the country can be greatly aided by a vision oriented stimulus or investment package that lays the foundation for the innovation based, renewable energy, ever more connected American economy of the future.  This, in the long run, will be the greatest contribution to a bright future for the country and will also provide the greatest economic benefit and greatest number of jobs.

Let us all hope that the 2009 stimulus package does not look back to 20^th century institutions, models and ways of doing business and try to recover them.  Instead let us see a commitment to the future, to the millions of jobs and hundreds of billions of wealth that will be created by looking ahead and investing in a 21^st century vision of what can and will be the source of a long term economic prosperity.