Why is this so hard? Why can the Federal Government stem a financial meltdown but can’t balance its books? How can we bounce back from 9/11 but can’t shut down the Taliban in Afghanistan?
I call this the man on the moon question. Back in the ‘70s people would ask, if we can put a man on the moon why can’t we … and would fill in the blank. It’s a reasonable question. Space flight seems daunting. Fixing schools, or race relations, or government budgets appears mundane.
But appearances are deceiving. It’s always easier to focus on big problems than on little ones. Why is this? Big problems pay better, either in prestige or money, for one. The magnitude of the issue attracts the best minds who get a lot kudos and/or cash for their efforts. Also, big problems tend to focus our minds. Samuel Johnson once quipped that when someone knows he is to be hanged in a fortnight, it concentrates the mind wonderfully. You’re less likely to get distracted when a lot is at stake.
Also, in large crises the range of options is limited. It becomes easier to see which one is best. So I give Ben Bernanke less credit for managing the Panic of 2008 than for his addressing the current foreclosure crisis.
But most of life depends on the little things: in budgets, in business, in investing. As we look to finish out the year, let’s make sure we fix what we can, and let the man on the moon wait.
Douglas R. Tengdin, CFA
Chief Investment Officer
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