“Experience is the name everyone
gives to their mistakes.”
“Experience is the teacher of
Let’s pause and consider for a moment the role that group-think has played in the widespread worry about a recession on the part of economists, the business press and financial analysts.
There is no question that the North American economy, viewed as a whole, has taken some major hits because of the housing market collapse, the related subprime mortgage debacle, the ongoing consequences around the world for a wide range of financial institutions and central banks, and tightened credit.
So there are good reasons why—again looking at the North American economy as a whole—any metals businessperson might wonder about the economic future.
That said, let’s reflect on what all of us know about the economy as we actually experience it versus how others write and talk about it. As we really experience it, there is no such thing as a single monolithic “economy.” What matters in our business life, instead, are the many interrelated, complex, often subtle, economic activities that we engage in on a daily basis. There’s no question that some metals companies, such as those that have a heavy emphasis on products for the housing market, find the going very difficult just now. But equally significant are the many, many metals companies that report that business continues at a reasonably good pace. Not gangbusters, perhaps, but no disaster either.
Of equal interest to me is the extremely thoughtful and professional way that our metals industry in the U.S. and Canada has responded to the potential of a recession. The days of analyzing market conditions based on seat-of-the-pants musings are long gone. Today, empirical and analytical data sets, like the MSCI Metals Activity Report, are much more sophisticated tools that can be used in place of obsolete—and unsubstantiated—rules of thumb or speculative ideas about what the future may hold.
With economists and the press continually finding the dark cloud in every silver lining, it is easy to be stampeded into a recession. I take considerable pride in the resilience and independence of our industry. It’s important to be aware of the opinions of others. It’s just as important to heed the lesson of your own order book, to hear the outlook from your own customers and to manage your business based on your own reading of the economy—the one you actually occupy.
The voice of experience is the one that permits you to hear not only the drumbeat of the recession-oriented pack, but also the quieter but equally real opportunities that continue to exist in our diverse marketplaces. If Oscar Wilde is right, we can now recognize the mistakes we made in earlier down cycles and profit from those lessons today.