Hard times and Animal Spirits

The hard facts are cold. Things just aren't the same.

That's why it's time to raise some "Keynes."

Gotta admit ... Keynes got it right when he coined the term "Animal Spirits."

You know, that lively term that captures how human decisions reflect our "spontaneous urge to action," where a simple math equation just does not figure into how confidence builds in an economy. Human behavior ... the belief that we control our destiny at the end of the day. Destiny's hand is our own.

Enter Spring.

The phones are ringing again!

Powerful words were spoken over the phone by Tim Born of Glass Doctor in Rome, Georgia, last week to this writer. "Where January and February were dead, things have sprung to life again and I work 12 hours some days to keep up."

The sounds of a turnaround? Possibly.

In another phone call last week with a leading executive from Dow, I heard the word "growth." Yes, growth. What an adrenalin rush. I nearly fainted!

Time to feel better about things? Evan a tad? I know I did. Even got a burst of confidence when we sealed a nice new deal.

Just goes to show ... words are powerful.

Growth. Phones ringing. Sales.

That burst of returning confidence--which grew as the week wore on for me--offers a vivid example of what John Maynard Keynes called "Animal Spirits," the title of a lively new financial crisis book by George A. Akerlof and Robert J. Shiller.

The book explores how individual feelings and attitudes can affect the economy, building confidence--or not--and ultimately serving as the underpinnings of an eventual recovery. Shaping beliefs is what it’s ultimately all about.

You’ve heard the adage “pull yourself up by the boots-straps.” Well, you never heard a math equation pick up the economy. We do ... you and I ... by our actions.

"When people are confident they go out and buy; when they are unconfident they withdraw, and they sell," say the authors.

We at the NGA are not sitting idle; we're building confidence, bound and determined to lead our industry forward as countervailing winds try to alter our course.

You may have seen Phil James' recent note about how GlassBuild America is shaping-up, standing tall against those stiff headwinds. It's a must-read.

Buying and selling is still the name of the game. This Fall at GlassBuild America provides the perfect opportunity to seal some new deals, jumpstart 2010, and rejuvenate your spirits with solid learning and networking.

Don't hold back. Act with confidence. Jump back in the water again and start swimming. After all, many of life’s biggest decisions--“Should we have a baby?” “Should I buy Ford stock?”-- come "straight from the gut," to quote former General Electric CEO Jack Welch.

Remember, the engine that runs the entire economy is confidence. We shape that confidence each day with our customers, suppliers, employees ... and ourselves.

A must-read for these times: "Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism.”

Well, gotta run ... the phone is ringing!

P.S. Speaking of animal spirits ... head’s up: The card check issue we wrote about in an earlier blog is beginning to advance in the House, thanks to Big Labor’s influence. Stay tuned, and be ready to act. This is one animal whose spirit must be tamed.

—David Walker, Vice President of Association Services, National Glass Association