Missing from corporate lexicon: 'growth'.

Author:Abel, James J.
Position:President's page - Editorial
 
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As we begin a new year, it is hard to comprehend all that has taken place in a relatively short span of months--the result of which has been the virtual elimination of what was previously a very common word in the American business lexicon ... growth

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A year ago, most of us were introduced to a new financial term "subprime mortgages," which was cast as the villain for the demise of the United States residential housing market. No sooner had we begun to generally understand the role that subprime lending played in our economy than it slipped into the background as the credit crisis widened and spawned a seemingly endless list of historic financial calamities. It has now reached the point where one day the news headlines trumpet a major story like the potential failure of Citigroup Inc., one of the country's largest banks, only to have it relegated to obscurity within a few days with relatively little public discussion given its notoriety and huge asset base in excess of $2 trillion dollars.

Since mid-year 2008, we have been subjected to a steady diet of historic market volatility, both in U.S. across the world. Governments and central banks have reacted quickly and boldly to support their respective economies and attempt to stem the tide of bad news. These unprecedented actions have been met with a broad range of responses--from energetic support to confused skepticism.

Despite all of the unprecedented actions taken to date by some very bright and accomplished people, they have not been able to stop the flow of bad news on the economy or corporate financial results, and most of all, they have not been able to restore a sense of confidence in our economy, in corporate earnings forecasts or in consumer-spending behavior.

Right now, we continue to be caught in the grip of uncertainty. People want to believe that the worst is behind us, but the rhetoric of the cable financial news shows notwithstanding, people just aren't buying it. Fear of risk-taking has never been a component of U.S. economic success, yet today it seems to dominate the business landscape.

For example, the U.S. Treasury Department stepped in to provide more than $300 billion in liquidity to a small group of key banks and financial institutions to result our economic engine. However well-intended, Treasury did not foresee that the banks and financial institutions would simply prop up their balance sheets--for fear of doing anything else--appearing to show...

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