Tuesday, August 9, 2011

Politician's leadership on the economy is strangely reminiscent of the actions of some publishers I know

It would be hard to be in either the newspaper or magazine business these past few years and not see the parallels with what is going on in politics. Bad management making big decisions that, surprise, surprise, are coming back to haunt them. In both case, those making the decision have a hard time coming to the obvious conclusion that they have blown it.

As one looks at events in the U.K. one sees that the British are about six to twelve months ahead of the Americans in the austerity game with the results being that their economy is grinding to a halt. Whether you can blame the last three days of rioting on the Tories is, I suppose, something that will be influenced by your politics, but one thing for sure, the lack of public spending is causing a retraction of the nation's economy.

(Yesterday, for instance, the British government – at least that portion of it not on vacation – reported that manufacturing levels fell, reviving fears that the country was falling – officially – back into recession.)

This shouldn't, of course, come as a surprise. Greece and other debtor nations, forced into austerity moves by the need for bailouts, have also seen their economies crash – and also have seen a rise in labor unrest, as well.

Here in the states, the President yesterday backup Defense Secretary Panetta's caution that there shouldn't be large cuts to the defense budget. That means that Medicare and Social Security may be what is targeted.

That would be fine with Senate Minority Leader Mitch McConnell who said yesterday that he wants “significant entitlement reform” so that the wealthy do not have to have their taxes raised.

So we know what actions are coming, and we should know what the reaction and consequences will be, shouldn't we?

It reminds me very much of what many B2B executives have been doing to their companies throughout the past decade: reducing sales and editorial staff sizes, while simultaneously acting surprised with the collapse of ad revenue and readership levels. Surprise, surprise, the cost of maintaining their qualified readership levels has risen and so these executives cut their print quantities and some have pulled their audits – again, with the all too predictable consequence that ad revenues have continued to go down...