The answer is LEADERSHIP

I was reading on-line today about the ways in which different countries are beginning to address the long term impact of the global economic mess. The BBC World Service asked me to comment about California on their nightly live radio broadcast. We discussed three examples:

"Britain's coalition government announces the biggest programme of spending cuts in decades, with thousands of public-sector jobs facing the axe. "

"French strikers impose new fuel blockades, hours after security forces clear protesters from three depots."

"NBC/WSJ poll: GOP poised for big midterm gains 'Democrats, with two weeks left, are facing very, very difficult arithmetic'."

Clearly, we face a global economic crisis. In California things are much the same as in France, the UK, and across America. There are three questions we need to answer:
• How did this happen?
• What can we do to "fix" the situation?
• Who among us will provide the Leadership to make these changes?

Our current global economic situation is a result of over spending for the past forty years. Following the end of the Second World War, global economies expanded. This growth seemed to be unending and led to overspending. The idea was that we will have more money, either higher salaries or more taxes, in the future and we can pay for everything then. This flawed thinking was fueled by the fall of communism and an additional expansion in Eastern Europe in the 90s. All of this came to a halt with the last big economic bubble in Housing.

Today, we need to face the new 21st century reality. Western economic expansion has reached its limit. Everyone in the developed countries has a car and a TV. All future growth will be driven by China, India, and Brazil. These are the growth markets for the next fifty years. The traditional Western Developed countries need to rethink their economic future and live within their means.

The idea of living within our means is painful for many. The concept requires individuals to only spend the money they currently have. This leads to reduced credit spending and reduced consumer spending going forward. Likewise, Governments must reduce spending to levels based on current revenues from Taxation and Fees. On paper this is not too difficult. The hard part comes to the prioritizing as to where to spend and where to stop spending.

On an individual basis these decisions regarding how to prioritize spending can be difficult. As Governments begin to make these decisions, the task will be nearly impossible. Britain this week announced its plan to cut the UK budget by 20%. This includes the cut of 500,000 government jobs. In France they are rioting over the decision to move the retirement age to 62 years old. Only the French would do this. The current retirement age is 60 in France and it is the lowest retirement age in the Western World. Only the California State workers, who can retire at 55, have a better deal.

The difficult decisions we face will require real Leadership. As individuals we can help ourselves by making these decisions NOW. We can also use the upcoming election process to pick the Leaders who will make these decisions for Governments going forward. The longer we wait the more painful this change will be for all of us. I'm voting for Jerry Brown to provide the Leadership we need in California. I think we are stuck with President Urkel for two more years and his version of "hope and change".