Postscript on Gen Y - BusinessWeek catches on

It's always moderately satisfying to be 'ahead of the curve' on something, and it's equally encouraging to see mass media picking up interesting issues.  In this case, BusinessWeek has produced a special report on managing Gen Y in the downturn, quoting a range of folks in the space on how Gen Y should behave, and will be managed through the downturn.

The report is solid, although I suspect it is still a little 'Abercrombie and Fitch' in tone - perky and optimistic, essentially arguing that Gen Y is principled, socially connected, resilient, tech-savvy, and ready to fliexibly navigate the recession with their 'guerilla' job search tactics.  As I pointed out in my post last year, those arguments definitely carry weight and will help carry Gen Y through the recession.  They are certainly more open-minded, have fewer commitments (a better cost structure), and rely less on work for personal fulfilment than any previous group.  On the other hand, we shouldn't underestimate the psychological impact of having no options, or being fired, for the first time.  While Gen Y don't have commitments, they do have egos and expectations - which are bound to suffer a few dents.  

The positive spin, for me, is that Gen Y will emerge in five years with all the great attributes listed above, but with more humility and appreciation for opportunities.  Managers should look forward to their current proteges evolving into 'Gen Y, v2.0', and bringing both inspirational leadership and pragmatic perspectives to their work. 

http://thepainfuljobofthinking.blogspot.com/2008/11/gen-y-in-tough-times-reality-check-or.html

Let's see how far we've come - social responsibility in the downturn

Foreword: This is the first post in a while. In the interests of full disclosure, I have recently been reintroduced to the painful job of thinking for someone else. While highly fulfilling, my day job has interfered with all my painful hobbies, including this one. My apologies.

In these grim times, it's always comforting to think back to the good, not so old, days of easy money, rich homeowners, and job security. When oil was going to hit $200 per barrel, but nobody would care because their little ex-urban bungalow would be worth $2 million by then. Having transported yourself back, take a look around. Amongst other things, you'll notice it's a very... 'conscious' world. Organic - and most likely local - produce is taking over. Bottled water is marketed by giving X cents per unit to pump African wells. Companies are spending real money on 'greening' themselves, and those that don't attract scorn from consumers and employees alike. BP cool, with its petals and its green logo (great foresight there); Exxon, not cool, with it's impressive profitability and its unshakeable association with Alaskan birds. Even those making a real effort, like Starbucks, came under attack for not doing enough. Any way you care to look, in the far off world of 2006, there is a relentless march of fair trade, biodegradeable, re-useable, ethically and morally sourced, sustainable... everything.

So, if everything else has changed in the last three years, what of this 'consciousness' trend? Do we still care? Can we, or our businesses, afford to?

There are really three players in this piece. First, consumers, whose individual preferences and willingness to pay directly encourage certain 'conscious' product attributes 0 paying a premium for fair trade coffee, say. Then there are the business leaders: managers who believe they can create less obvious (non-revenue) value - brand preference, employee goodwill, regulatory relief - by acting responsibly. Finally, there are Governments, who act to address market failures or externalities, using instruments like carbon taxes.

Let's start with consumers. Specifically, organic food, which is a good acid test - food which tastes a bit better, but costs quite a bit more, with the premium justified by 'consciousness' and long term health benefits. During the boom, sales were growing strongly - in 2007, the Organic Trade Association dubbed their members' products as the 'shining star' of grocery sales, with growth of 22 percent. Growth seemed unstoppable, and chains like Wholefoods rolled across the US on the back of the trend. Could this be a true 'structural' shift, like the move from filter to espresso coffee? As it turns out, no. Organics are a 'nice to have', like the Coach handbags that defined 'mass luxury' during the boom. By November last year, annual growth had fallen to 4 percent. Recent data from the UK suggests the picture is even worse; a 19 percent fall in organic sales year-on-year.

If consumers aren't paying, then maybe businesses are? The Economist takes a typically pragmatic and measured assessment; yes, businesses are trimming back on the frivolous stuff, but aren't making a 'wholesale retreat'. What the examples cited in the article really show, though, is that there are many activities that look like 'socially responsible business', but are really just good business. Online meetings save money and reduce Gap's carbon footprint, sustainable cocoa supplies create reliable supply chains for Cadbury. This is certainly good for the world, but is no more 'socially responsible' than companies moving from letters to email - fundamentally, it's about better business, with some nice environmental benefits. It seems that it's time for the 'and' rather than the 'or' when it comes to cashflow and CSR.

Finally, where are the politicians going? Are they backing away from expensive environmental promises, or pushing ahead where consumers and business no longer have the vision? Obama, for his part, is ploughing ahead with increasing fuel economy standards in the USA. This is excellent politics, as he has correlated several interests - climate change, national security, labor market stimulus, and whipping US carmakers back into competitive shape - while leveraging his newfound position of power with respect to the automakers. Downunder, Kevin Rudd, Prime Minister of Australia, has had to compromise. The Government's proposed emissions trading scheme has been pushed back in order to win favor from legislators, and still faces challenges in being enacted. On balance, Governments probably have the strongest hand to play out of all the actors, given their ready access to money, long term view, and focus on job creation; but the change agenda won't be easy, particularly as the public starts to do the math on the costs of stimulus and non-critical programs.

Bottom line? 'Conscious' behavior seems to have been at least part bubble-within-bubble, a little indulgence while times were good. But as Gap's recruiters point out, there has been a real generational shift. The heirarchy of needs seems to have shifted a bit, so even if a correction is underway, the world won't end up back where it started. Al's truths are still true, and highly inconvenient. The oil ain't coming back any faster. We may not have come as far as we've hoped, but it's still progress, and with progress comes hope.

Please, protect me from myself: when does 'Nanny State' know best?

Many of us, including myself, find something satisfying in Ronald Reagan's pithy summary of Government interference: "The nine most terrifying words in the English language are, 'I'm from the government and I'm here to help.' " We've all seen the inefficiency of state bureaucracies as they try to 'help' with problems. To begin with, they often lack the capabilities and powers - for example, the real problem may be legislative, but rather than tackle the complexities of changing laws, Governments fund agencies as a mode of appeasement. Even if they have an appropriate mandate, execution is often poor. With no competition or market forces at play, organizations inevitably become more inwardly focused and less efficient.

Given the benefits of markets, and the recognition of these benefits, it's somewhat surprising that around the world, many young, educated researchers and voters are suddenly asking for more Government. Increasingly, Governments are being given a mandate to act in the 'best interests' of citizens, where for the last 20 years the trend has been towards empowering individuals to make choices and live free lives. What's going on?

Firstly, let's look at the specific action the public are asking for: protection from this recession, and future ones like it. This demand stems from the painful aftermath of financial irresponsibility during the boom, and the transfer of blame for this pain away from consumers and onto the financial sector. Home lending that was once heralded as 'enabling a home ownership society' is suddenly 'predatory' and 'greedy'. Credit cards are coming in for criticism as well; apparently, individuals should not be given the option of higher-interest, unsecured credit as a source of funding for their lives. None of this mattered on the way up, when it was all BMWs and Wholefoods, but now the masses have spoken: the financial sector tricked everyone into this mess, and we the people deserve protection from such reprehensible deception in the future.

This is simply crisis-driven populism writ large. Consumers who were spending more than they could afford, and in most cases knew it, are collectively angry at their fiscal irresponsibility. But tightening lending criteria isn't the answer. People can be irresponsible in many creative ways: poor investments, excessive lifestyles, neglecting their performance at work. Telling people what house to buy is not a complete answer to the personal financial responsibility; and if it is to become a complete solution, it must be extended to cars, hedge funds, even handbags (how much of the US housing bubble went into Coach bags over the past 5 years?). Even if you do extend the regulation to this extent, the market will undoubtedly create a new outlet for human irresponsibility. Hedge funds are a case in point (especially as the Madoff debacle unfolds). After the Government regulated most financial securities, to protect consumers, the financial industry created a non-transparent 'magic box' security which avoided the reporting requirements. Investors chased the returns in the 'magic box', without pricing in the risk signaled by the lack of reporting. In summary, pursuing this line of 'protection from poor decisions' leads to either complete state control, or ineffective partial interference.

However, there is a second, far more compelling basis for Government involvement in individuals' decisions. There is increasing evidence that in some instances, markets will not deliver sensible outcomes. This may be due to consumer behavior that isn't rational, or market structure that breaks the traditional supply and demand linkage. For example, people are less able to see long-term benefits, especially in certain decision circumstances. Take light bulbs. There are now two types of light bulbs: incandescent (filament) bulbs, and CFLs (compact flourescent lightbulbs). CFLs use much less power, and save money in the long run via lower electricity bills, but they are more expensive on the shelf. The problem is that bulbs are inexpensive, and purchased in a retail environment alongside bread and flour. When a consumer is cruising the shelves, price-comparing on the bread to save a dollar here and there (which, as we all know, adds up at the checkout), it's hard for them to change mental gear and make an NPV-based financial calculation about CFLs. In addition, each light bulb is still cheap, so it's not really worth expending the brainpower on the decision. Finally, there are no clear functional benefits - both light bulbs illuminate the room, and are easily interchangeable. So the consumer sticks with what they know, and what is cheapest on the day. Incandescent bulbs therefore survive, in the face of a strictly dominant technology.

This is a situation which truly justifies Government interference. Yes, there are some plausible reasons why some consumers would be better off with incandescent bulbs; there may be aesthetic preferences, agency problems (the bulb-buyer isn't the electricity-buyer), or financial limitations (on a tight budget, incandescent may be the only affordable option - especially if the Government 'protects' people from the credit market). At a macro level, though, the case is strong for forcing the changeover - everybody saves money, the country uses less power, and the CFL industry can gain scale, further improving the overall product economics. Critically, the basis for this interference is that the human brain has demonstable difficulty making the 'right' decision, and the 'right' decision is very clear. This is different to someone buying a large home, which is an individually unique decision involving job prospects, health, real estate values, and so on.

Now, let us briefly consider what Governments are doing, today. Unsurprisingly, they're doing what the people want. Around the world, states are increasingly wading into the financial markets to 'protect' consumers, thereby constraining their personal financial options, and preventing the development of responsibility and skills in this area. Tighter credit card regulation is on the horizon in the US; FDIC protection is being increased to $250k. At the same time, the NZ Government has just announced that it will not legislate in favor of CFLs. While these cases are not statistical evidence, they illustrate that we are applying the wrong framework for how to think about Government interference. Yes, people need protection, just not the protection they ask for. Sometimes we don't know what's best for us; but we don't know when we don't know.

The printed page is fading a little faster

It's almost 600 years since Gutenberg's first printing press, and it's an innovation that commands some respect: there aren't many technologies that have persisted for so long. Sure, the presses have changed, but the idea of paper and ink combining to create knowledge is still hard-wired in our minds. Let me be clear, the point of this post is not to claim that the age of paper is ending; that idea has been in play since the first computer display. The news is that there are signs, at last, that we've reached the tipping point. Signs that there is at last some excitement around this trend - rather than bemoaning the loss of the glossy magazine or the dusty book, people are enthusiastic about getting a new book without the trip to the store, not having to recall books from the library, and killing a few less trees in the pursuit of their noble knowledge.

Let's start with books. For as long as I can remember, my attempts to convince people of the value of e-books were entirely futile. I would argue convenience, paper-saving, avoiding the garage / eBay sale of a thousand old books from the basement, and availability. Inevitably my passionate book (or magazine, or newspaper) loving targets would respond with the usual list of lame counterpoints: battery life (please, you carry an iPod, not a harmonica), readability (have you tried an e-Ink screen? No? OK then...), the 'feel' of paper (for me that invokes a different kind of paper entirely), portability (see previous comments), and finally, ridiculous things like 'the smell', and 'lying in bed with a book' (yes, people believe that statement is somehow an argument for printed material). Now, my arguments are no longer necessary, because I have that most irrefutable of proof: Oprah has a Kindle.

To be fair, the Kindle does deserve some serious credit for solving the biggest problem: book availability. In a genius twist on Apple's disruption of the music industry, where Apple used technological skills to win a place in the content game, Amazon used its power in content distribution to gain unprecendented content availability for their first foray into consumer technology, the Kindle. Sure, the Kindle could be been better designed (by, say, Apple or Sony), but once a device has e-Ink (the cool display that reads with the contrast of paper) and wireless connectivity to pull down the books, it can do the job technically. Then what you need is range, and for range you need publisher support. Again, as Apple proved with the iPod, a seamless customer experience and strong content-maker support makes DRM acceptable to users - at least temporarily - and breaks open the market. So kudos to Amazon for forcing the industry over the threshold.

So, in books we have Oprah's endorsement and Amazon's catalog breaking things open. What about magazines and newspapers? Several things indicate an inflection point here. First, you can now win a Pulitzer Prize for an online-only publication. In the past, you had to be writing for a 'serious' publication, one that could afford presses and salespeople and stuff. Now, if you're writin' good, even on the inter-web, you're in play. There are still some conditions, but the cat is out of the bag. It does make me wonder how wide they will cast the net in looking for nominees, and how they'll manage the 'long tail' of blogs, but rightly, that's no reason not to move forward.

Second, that most polished and well-managed of newspapers (which looks like a magazine, just to confuse you), the Economist, is now available entirely online. They still print copies if you want 'em, because there are enough people who want to flip through a copy and for whom $100 per year for a subscription is no big deal. But for the long tail of consumers who previously couldn't access this high-quality information, it's a knowledge boon. I don't sense any hand-wringing about the economics of online from the Economist; their readership demographics and reach should allow them a good monetization model, and their content-creation model is more flexible than the average paper.

Third, the Tribune Co. (owner of the Chicago Tribune and LA Times, among other assets) is going broke. This is a pretty big signal; it's reminiscent of when Polaroid's bankcruptcy signposted the terminal decline of film (incidentally, Polaroid did try to build a digital camera... check the PDC-2000 out). This shows that somewhere, somehow, consumers are getting a good enough substitute for their daily 'paper paper' that they're no longer buying. Of course, there is the argument that they may still be reading, say, the Chicago Tribune, but doing so online and taking advantage of an implicit subsidy. This argument often continues (if you're talking to journos or newspaper execs) to conclude that people are enjoying a temporary situation of high-quality free news online, and that once the industry collapses, there will be a sudden realization that it's worth paying (somehow or another) for quality news. Consumers will then accept either intrusive ads or subscriptions to get 'good content' as opposed to all the subsidized or recycled content on the web.

There's something of a point to this last idea, that news doesn't cover itself and needs a funding model, but resurrecting the print business model online isn't the answer. Remember, newspapers were built as a highly integrated operation, incorporating news gathering, analysis, editing, layout, printing, distribution, advertising sales, on a daily cycle. The online world will almost certainly be much more disaggregated. Distribution is effectively free. Google or Yahoo will monetize your advertising space for you, better than you can. And news gathering can be separated from analysis like never before: one news wire service (say, Reuters) can tell you that Congress and the White House are discussing an automaker bailout; then a thousand bloggers can tell you within ten minutes what they think it means. Surely this is better than 20 reporters attending the press conference (which would be less efficient), and creating 20 different interpretations (offering less choice than the thousand bloggers). The point is, shifting away from paper removes the old linkages which constrained the flow of ideas.

Personally, these are exciting and vindicating times. I can't wait to get my new tablet laptop and use my personalized home page as the first port of call for news in the morning. I hope to see myself under a palm tree with a Kindle next year some time (the uncertain bit is the palm tree, not the Kindle). But for many people, there is still the fear and dread of 'losing' the paper experience. To them I say: do you remember where you put that Polaroid camera? Exactly.

Gen Y in tough times: a reality check, or time to shine?

The topic of 'Gen Y' (or 'Millennials' - I'm going with 'Gen Y' here) has been hot over the past few years, with business media offering 'solutions' on how to manage these mysterious youngsters, and mainstream media marvelling at their assertive, take-charge attitude towards life. In general, the commentary identified a few key characteristics of Gen Y: they're demanding, they want work that is holistically rewarding, and they believe in the value they can bring to an organization (this Time article captures the sentiment pretty well). However, there has always been a darker, intergenerational undertone to the topic. Yes, Gen Y are willing to step up, but they seem to lack respect for their elders. Gen Xers and Boomers have tut-tutted the new generation, with their demands of flexible hours and travel sabbaticals, and don't trust their openly social ways - but there was no choice during the boom but to hire them. The WSJ recently dubbed them 'Trophy Kids', and the tone of that article pretty much says it all: they're spoiled brats, but we (Gen X / Boomers) are stuck with them.

Now, with the global economy entering a deep freeze, it seems the tables may have have turned on these upstarts. Blog posts are turning up proclaiming the end of the good times for spolied Gen Yers, and HR managers everywhere are breathing a sigh of relief at not having to 'negotiate with the terrorists' during this year's recruiting season. Now, the Gen Yers are going to have to knuckle down and work, deal with some hard times, and learn some tough lessons. But how real is this perception? Will Gen Yers relive the Gen Xers experience of the early 90s (the 'tough times' in Gen Xers folklore) and come out 'cured' of their seemingly unreasonable expectations and sense of self worth? Perhaps Gen Y is less a generation, and more merely a symptom of an unprecendented period of economic growth and global stability, which is now unwinding around them?

No, they're not going to be 'fixed' overnight. The world view that Gen Yers have developed runs deep (especially with an Obama White House), and the technologies which have informed their intellectual development aren't going away. Even in hard times, Gen Y will still look for interesting and innovative angles in their work. They're connected into the flow of ideas, with their iGoogle homepage and RSS feeds, and will be looking for the next new thing in whatever they do - and by the way, this should be good for business, too. Flexible working is in the same category: it makes sense for employers and employees, and is easier than ever with smartphones and home broadband pipes.

In addition, they are well positioned to adjust their cashflow expectations. For all that Boomers and Gen X decry the profligate lifestyles of today's young employees, Gen Y has a flexible cost structure, and Gen X are the ones with mortgages, kids, and 'big ticket' fixed cost items such as private schools and new cars. Gen Y might go out and drop big coin at a club, but they can stop doing that easily enough. To put it another way: who owns all those houses that are in negative equity? It's not Gen Y. Another quick test: who is being paid what? Gen Y has pulled down good salaries compared to historical graduate norms, but they still come cheaper than the Gen X home makers with gold-plated experience, and are more willing to take contract positions. So hard-working Gen Yers (yes, there are some out there) will shine as employees who can lead new thinking, take risks, and won't break the bank.

Of course, there's a new reality out there, and there are likely to be some fundamental shifts in expectations of the job market. Most Gen Y people I know have rarely been turned down for a job; in fact, they've often been headhunted, or found opportunities through friends. The next few years will be a genuine introduction to the grind of managing a job funnel - ten interviews, three second rounds, one (or maybe no) offers - that earlier generations are familiar with. There will also be adjustments to the non-profit / travel / flexi working mindset: yes, at some point, employees need to actually work. Gen Y graduates who built resumes on six month bursts of work interspersed with charity work and European rail trips will rapidly discover the financial and professional benefits of putting in some time, as the market tightens up.

So if employers and older managers are expecting to 'break in' Gen Y in the coming years, they'll be disappointed. Gen Y have the flexibility and openness to change to see them through, while retaining their openness, innovative mindset and global outlook. We don't need an intergenerational war, especially when we're facing an overhang of retiring boomers and a global recession. On the contrary, if handled correctly, this should in fact be a time of opportunity for businesses and managers to groom the next generation of leaders. It's a time for older managers to use the newfound focus of their young charges as a lever for professional development - building loyalty and teaching the Gen Y tearaways about leadership in difficult times. In twenty years, when Gen Y is taking charge of things, they'll certainly need more maturity than they've shown in the last decade: this is a great time to grow up.

You'll get a good sense of the Gen Y zeitgeist at: www.bretthummel.com

Populist redistribution of risk in the financial crisis: The dark side of the ownership society?

There is a common and reasonable concept which informs much of our society and behavior: that people should bear the consequences of their actions. In seeking rewards, players must assume some risk. Bet a buck, and you may or may not get it back - here are the odds, it's over to you.

This principle should make life, and the law, fairly simple: do what you like with your money and your time, but be prepared for both the good and the bad consequences. Of course, it’s not that simple; there are usually some aspects in which it seems reasonable to believe people should be protected from risk. Take, for example, the risk of a house fire. In theory, there could be a market for fire fighting services, with higher and lower levels of protection – and of course, the option to save a buck and buy no service. However, house fires are pretty terrible, so we collectively shoulder the cost to ensure nobody gets burned (so to speak). As a quid pro quo, there are fire codes specifying how houses should be built. Is this inefficient? Perhaps. If there were no fire service, and individuals got insurance discounts for being prudent (installing sprinklers, say) then the total fire damage bill might be lower. But when it comes down to it, we extend the protection.

Drawing a line somewhere

If this is our starting point, the obvious next question is: where should we draw the line? More specifically, there are three sub-questions:

1. What should citizens be protected from by their government?

2. Who should pay for that protection?

3. Is this protection explicit versus implicit?

As an example, consider California’s mandatory car insurance rule. This seems to work pretty well: it protects all drivers from the risk of an uninsured wayward vehicle; is paid by all car owners, proportionate to their risk as assessed by the insurance companies; and is explicit (written in law and contracts). Everybody knows the deal, knows the excess, and can adjust their driving / drinking / road rage accordingly.

Let’s now jump to the current crisis, and the bailout. Without trawling through the details, the bottom line is (with reference to our three questions):

1. Homeowners and bank shareholders are being protected from losses – through asset price support and reduction of debt costs (this neglects broader impacts of the crisis, for simplicity)

2. All taxpayers are paying

3. The risk mitigation was never made explicit previously

This is troubling for a couple of reasons. Firstly, it’s not equitable – the prudent person who saw the risks in housing and didn’t buy a house, say, 3 years ago, is now paying for their neighbor’s risky investment (not to mention banks that did a better job of managing risks than their rivals). Secondly, it demonstrates a surprisingly extreme 'herd recklessness' – why did everybody take such dramatic risks, when there was never an explicit guarantee?

Here, neighbor, have some risk

There are many contributing factors – securitization, bad judgment, flawed assumptions – that have been discussed at length. The idea I want to focus on here is what I term ‘populist redistribution of risk’. Looking back in history, ‘labor versus capital’ debates have traditionally focused on redistribution of wealth, with populist politicians promising higher wages and benefits for the majority of people who didn’t have assets (‘labor’) at the expense of the wealthy landowners and tycoons (‘capital’). Now, most people in the US (and the rest of the western world) own assets – a house, some shares, cars, bonds – and moreover, they've financed it largely with debt, leaving the average US household looking a lot like a small private equity firm.

You can see where this is going. In 2008, the masses are no longer ‘labor’, they’re ‘capital’ – they have a clear interest in asset prices, sharpened further by all the debt they’ve taken on. As such, when the dream run of asset price growth (and debt growth) ends abruptly, it’s no surprise how the elected leaders of the country respond: try and hold up asset prices, and diminish debt. What about risk and reward? Well, it turns out that when a majority of the country has to face up to the risk, changing the rules seems attractive.

The end of principles?

The bailout entrenches expectations amongst members of the vaunted ‘ownership society’ that they should have rewards without the risk. Previously, this was an implicit hope; now it’s explicit. Previously, some taxpayers saw the risk in the housing markets and decided not to invest; those people are now paying for their neighbors’ misjudgments, and are less likely to be prudent in the future. Previously, people were expected to read the fine print that said FDIC only guaranteed $100k – and perhaps diversify their deposit holdings to manage risk; now, FDIC cover is being increased to $250k with funds from, of course, the taxpayer. To justify changing these rules, people cry ‘pragmatism’, implying that sticking to principles is impossible and unthinkable in this situation. I beg to differ. Tough times are when principles really matter, and the principle of individual risk and reward is one of the philosophies that made the US the greatest economy in the world. The US is capable of great things, and propping up a broken financial system built on rising house prices is no great job. Let’s hope some of the risk still hits home, and over the next few years the real economy gets the attention it deserves.

Relevant: Paul Romer, a leading US economist, discusses the choice between 'Fundamentalist' and 'Realist' approaches to the crisis here. In some ways, my assertions in this post are an extension of his 'Realist' concepts to include the forces of populist politics as a 'real' consideration.

Intro to first post

Having spent four post-MBA months cruising the world, unemployed and 'unplugged' from any responsibilities, I found myself with the time to really think. Which can be a dangerous thing, as it turns out, with respect to the 'big' questions about life and meaning and all of that. However, it's a very good thing with respect to 'minor' issues, such as this current financial crisis. Sitting in hotel rooms across the US, Europe, Asia, and Australasia (that's an slightly anachronistic term for Australia and NZ), I watched things play out on the news channels, and realized that there was a place in all the madness to sit back and think. To be sure, if you had a refinancing coming up, acting definitely took precedence over thinking. But watching from the sidelines allowed some insights to emerge. I thought:

1. These are some interesting ideas, it would be fun to share them
   
2. I wish other people (including my future self) would carve out the time to really turn over these situations and concepts in their heads

As a first post, then, one angle on the current crisis: perhaps the US government's bailout is the result of building a democratic ownership society, where asset values are such a big part of most voters' lives.