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Are the Roots of the US Economy Irreparably Severed?

Joseph Lee
Joseph Lee

In the 1979 motion picture Being There, Peter Sellers played Chance the Gardener, a man said to be “stuffed with rice pudding between the ears.” Nevertheless, it was Chance who offered a piece of brilliant advice that would serve the President of the United States well in our current state of economic crisis:

“…as long as the roots are not severed, all is well, and all will be well… in the garden.”

Last month, I sat in an economic forecasting dinner where professors from a famous business school predicted that the economy should be turning around by mid-summer, and that by the end of 2009, a recovery should be in full swing. (Read why a recovery may not be so soon in coming) Then there was Anderson Cooper on CNN tonight asking another economist whether we’re in a depression. What ties these people together is that none of them have any idea what the future holds. So why do we bother listening?

There really is little magic in understanding why we’re in a mess today and what it’ll take to get out of it. We’re in a mess because we lost confidence in the system (rightfully so), and in order to get out, the consumers need to feel confident again. Nowhere in the solution does reality matter. Reality is that current home prices are as affordable as they’ve ever been in the last 30 years. Reality is that sooner or later, people will need to buy new cars, replace furniture, fix up their homes, or get the latest fashion. Reality is that relatives need to be visited (even those you hate, especially if they have money), nails must be polished, family vacations taken, and graduation gifts gifted.

Business is not that hard.

We are not asked to launch the space shuttle or to put a man on the moon. But we have managed to make it more complex. In his book Traffic, author Tom Vanderbilt, argues that the more safety valves we build into the system (safer cars, safer roads, more traffic lights, etc), the more dangerously we act . Simply put, the driver of a car with bald tires in snow will drive slower than the driver of a four-wheel-drive automobile with studded tires. Guess which car will be going faster? And which one will likely cause a fatality?

The crash of 2008-2009 is perhaps a warning that our managers aren’t capable of running businesses at the speed of light. The bankers who never experienced massive foreclosures, the CEOs who only saw economic upswings and spiking share prices, the fund managers who sold ever more complex products that few understood, specialists who never bothered running businesses, but who were more focused on running numbers, managing risks through checklists rather than experience and common sense—in the long run, they weren’t any better than Chance the Gardener.

Warren Buffet wrote another one of his “gee, I screwed up to the tune of a few billion dollars” shareholder letters. It was posted on the Berkshire Hathaway website over the weekend, and I am sure that analysts from around the world are dissecting every other word. He provides a refreshing amount of humility, honesty, and most importantly, simplicity to the business world. I wonder why it isn’t required reading for every business school student (or better yet, every CEO).

I will take my time to read it to see if Buffet feels that the “roots are not severed” and whether ( to paraphrase) all will be well in our garden.

Joseph Lee is an adjunct professor at the Graziadio School of Business and Management, where he teaches a course on management consulting. Read his blog at

Related in the GBR

America’s Financial Crisis? by Ron Ford, PhD, Joetta Forsyth, PhD, Edward Fredericks, and Dave Smith, PhD

The Top 10 Embracements for Difficult Economic Times by Darrol Stanley, DBA

What Happened to the U.S. Housing Market? by Peggy Crawford, PhD, and Terri Young, PhD

Author of the article
Joseph Lee, Adjunct Professor
Joseph Lee, Adjunct Professor
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