Already this year, we’ve started to see the unfortunate fallout of the global financial meltdown.  Companies laying off workers, regular Americans losing their homes and regular people beginning to move to tent cities.  Additionally, with taxes shrinking, local governments are struggling to meet their increased obligations of unemployment insurance checks and social services that rise in times like these:  homelessness and mental health.  To put it bluntly, there a precious few positive side effects of a global recession.

Unfortunately, I’m an extrovert.  What that means is that I feed off  the energy of others.  Therefore, when people are happy, I feel happy and when they’re bummed out and hopeless, I feel a strong motivation to cheer them up.  I’m also an optimist because it’s the only outlook that has ever made sense to me.  This is a blog post about good things that I see that will emerge from the Recession. Perhaps these observations are just glib words — on the other hand, we’re equipped with all the tools to turn ideas into action.   I recently heard Desmond Tutu say, “Language creates the reality it seeks to describe.” If you agree with my ideas here,  please forward this to a friend so we can collectively create a better reality.

We have all watched the business press cover sales trends for the holidays and seen firsthand the deep discounting going on at retailers.  What I found more fascinating were the changes in attitude and behavior that took place around me this year.  One of the parents at my son’s pre-school offered us a few boxes of books and clothes that his children had outgrown.  At first, I politely refused, largely out of pride.  When my wife heard the story, she chastised me and when we saw the parent next, we accepted.  This might be an isolated example except for the fact that it made a deep impression on us.  And we realized that we also have boxes of beautiful clothes in the basement and friends that could use them.

Perhaps more importantly, we altered our attitude on Hannukah and Christmas gifts.  While we still overbought, you could see everyone making an effort to be more thoughtful in their purchases.  This really stood out for me as a healthy move away from a trend of spending to convey love while simultaneously showering more and more people with less and less attention (I’m not only talking about Twitter here. . . .)

If our behavior is any indicator of national trends, we’re going to see disappointing Holiday sales figures released soon.  But here’s why this may not be all bad.

What is the Economy?  At it’s simplest (meaning when we’re not double hedging Mortgage Derivatives), it is simply the way we keep score.  Of what?  Theoretically, the economy keeps score of the value we create (spending and savings) relative to the value we take (spending and debt).  So what does that mean?

Well, for me it means that there’s going to be a lot of bad news in the days and months to come.  And most of it will be in areas that you and I cannot control, which can really make you feel hopeless and powerless.  But we’re not — we’re powerful and more so, the more we have hope and trust in eachother.  Because the economy is a reflection of us all — how well we create value and help eachother.

Which leads me, I think to my point.  One thing we can control, is how we each behave.  The behavior that I saw this Holiday season is stuff that won’t show up on the economic report card,   We spent less, but hopefully, we paid more attention to the people around us, and valued them more.  The two concepts, spending and supporting, are interrelated but not equivalent.  So lets create value and support eachother.  Inspire eachother.  Invest in eachother.    That’s the way value has and always will be created.  And we need it now, more than ever.

This is my friend Ashok — he owns the aptly titled and fantastic Marindian restaurant called Avatars.  Every year, he has a celebration at 2656 Bridgeway in Sausalito where he serves a fantastic dinner to as many people as possible on the Wednesday before Thanksgiving.  For FREE.  From 4 PM to 10 PM.  Yesterday he told me I couldn’t come unless I brought at least 20 people.  This is his way of saying “Thanks”.  I think its a beautiful idea — I will be there with my family.  Please twitter this and help me out.  Last year he served 1100 people.

Ashok, owner of Avatar's

I had an interesting experience on Saturday night.  My sister and I were in a candy story in San Francisco, where I found some amazing toy robots.   In the last month, my son and I have been obsessed with robots.  I made him a costume for Halloween and I’ve been taking pictures of all robots I see in my travels.

In any case, there I was in the candy store, taking each one out of the box and comparing their relative merits.  Finally, I chose one and looked at the price:  a very fair $21.  Here’s where it gets interesting though.  My sister appeared at my shoulder and said the following words, “Oh, you don’t need to buy it, just take a picture of it.”  Times are tight, and her logic was so sound that I obeyed.

As we walked away, I began to try to unpack what had just happened.  I saw an object that I liked and after investigation, decided I wanted to buy it.  But instead, I took a picture of it, which in a sense, virtualized it and allowed me to satisfy 75% of the buyer’s impulse.  I now have something to remind me that I saw the robot and that robots, or classic robots, make up part of the tapestry of my personality.  Included in that tapestry are songs (already virtualized), movies (already virtualized) and all manner of cultural and personal relics and encoders of ideas.

What this points to, I don’t know? In times like these, its nice to know that I can seperate things that  I want to embrace and remember from what I really need.

In fact, a few nights ago, Angel Island caught fire in the middle of San Francisco Bay. With my sister, I drove to the Marin Headlands to watch more than 700 acres burn. As we stared at this surreal volcano-like image in the midst of a sea of normality, I remembered how I felt following 9/11. As we watched those burning ashes, we had so much pent-up emotion following the bloody dot-com financial meltdown and plunged headlong into the uncertainty of recent years. We also, perhaps for the first time, used social software to bind to others: I remember not having cell reception in N.Y. but staying in touch with others via e-mails, blogs and IM.

A panic feedback loop
I believe what we’ve been watching is clearly panic, starting in our financial institutions (though triggered by consumers, who in losing their homes, also must have panicked). These institutions are notable for me in that they are little more than repositories of trust, which they accumulate, hold and invest in the form of investors and depositors’ money. As soon as the trust placed in them erodes, the funds quickly follow. So the opposite of panic is trust and the calm that results from knowing you are safe. These two states inform every relationship we have and every transaction we make, and they hold together our society and economy.

The unfortunate phenomena of panic that we’re witnessing right now are examples of a panic-amplifying feedback loops. I’ve recently described this as the societal equivalent of a person who is completely healthy but knows he or she will drop dead if their heart rate exceeds 160 beats per minute. This should be just fine; don’t run marathons and all will be well. Unless you start thinking about it. And your heart rate rises. Which worries you. And your heart rate rises …

Will we escape unscathed?
Unfortunately (or fortunately), panic and trust do not exist in a vacuum. Many people, myself included, may have thought at the beginning of this crisis that we might escape its wrath. My logic went like this:

1. We do great work and our clients are largely in the entertainment sector.

2. Virtual worlds present a cost-effective and comforting refuge in troubled times.

3. As companies cut costs, they will increasingly look to replace costly flights and hotels with virtual meetings.

The reality is that nobody will escape unscathed because we are all so fundamentally interconnected. The question we must ask ourselves and each other is, “How can I be a force of trust and stability in my dealings with others?” Ironic as it may seem, the market is simply a reflection of all of us and our collective health. Sometimes that reflection is distorted, but for the most part it’s accurate. Therefore, if we relax and focus, this too shall pass.

Agree? Disagree? Why?

The Ting Tings on Yo Gaba Gaba! via stereogum

My kids may be too old for Yo Gaba Gaba! but ever since Bart turned me on to it, I’ve been hooked. It’s just plain cool and the music is great. When I saw The Ting Tings do this cover of the old Altered Images song Happy Birthday I went and downloaded their album right away and I’ve had it on repeat ever since. Whatever they’re doing over there it’s certainly working on me.

My friend Rupert pointed me to this video of Keven Kelly. It’s a really great 20 minute summary of a lot of ideas that have been floating around for awhile. The basic thing that I get from it is that we’re all becoming part of one global machine and what really makes it powerful is us being open or transparent to it.

Being open to the network is an idea that I personally find inspiring and liberating. I have a few blogs, I participate in a number of social networks and virtual worlds and I post lots of videos and photos of myself, my friends and my family online. Some people find that kind of behavior somewhat alarming - especially where my kids are concerned. But I’m looking at it from a little farther down the road. A cell phone used to mean you were on call 24/7 but now it means you have access to everyone and everything 24/7 and that’s powerful. I think for many people, putting yourself out there on the web feels like an invasion of privacy. If you were only one, I’d agree it might feel like being the only naked person in the room. But if everyone were naked, then maybe it’s not such a big deal.

I’m not saying there aren’t issues with everyone putting everything online but I’m optimistic that we’ll figure it out as we go without turning the world into some version of Gattica or 1984. Either that or the cyborgs will be showing up soon and they’ll start making their way through the list of TED speakers.