I am beginning to believe that the shock of the bank failures will play out a lot like post 9-11, but in slow motion.
Instead of a sudden event that brought us all to an immediate standstill, the current situation played out over several days and even weeks.
The outcome was the same: economic paralysis. After 9-11 everything came to a standstill. Everyone wanted to wait and see what would happen next before they re-engaged in normal economic activity.
We have the same outcome today, but it happened more slowly. Wave after wave of bad news from Wall Street and panic laden communications from Washington eventually put us into that same paralysis, that same "wait and see what is next" mentality.
Seth Godin commented about this tendency of human nature recently in his blog post "Do You Have 16 Boxes?":
When something is going wrong, when the economy is out of sync, we panic....We talk ourselves into hysteria about how, "none of our customers have any money," or, "in this bleak economy, we'll never make a sale." Instead of using the relative downtime to build...we just sit in the corner, keening, worrying....
I heard a consistent mantra out there from entrepreneurs I talked with over the past few weeks -- "We just want to wait and see what is going to happen."
We are beginning to understand that although we have a mess; it is a mess we can all make it through. As a result, economic activity is beginning to perk up a bit.
Soon we will see both confidence and economic activity heat up. We will have a slowdown for quite a while, but we should see improvement over the next few quarters.
Fortunately, panic is giving way to strategizing. Hopelessness is giving way to planning. Paralysis is giving way to prudent decision making.
At our company, we've noticed the last two weeks have had a bit more activity. I don't know if that is pure coincidence, or we are indeed seeing the first steps towards recovery.