I had a nice chat this week with a colleague from my Capitol Hill days, and it made me think about what I'd be doing if I still worked for a Democratic Senator.
I've mentioned before that I worked on the Senator's economic policy team and one of the things I enjoyed preparing the most was a "weekly economic update" every Friday. It was just a quick, one-page list of facts and brief commentary on that week's data - weekly jobless claims, housing starts, consumer confidence numbers, and so on. Typically I would find data and explain how it was relevant to the Senator's positions on issues and proposals for the future.
The one thing I often liked to do with this weekly note was find a morsel of data that didn't necessarily fit into the economists' toolbox but really illustrated how working families were getting by in the current economy.
Recently the talk in some PR circles is about "recession" - and more specifically, what will happen to both the web2.0 startups that need VC and the larger PR/marketing firms that depend on available cash from large companies.
Communications firms will get through a recession by showing they "get it." We must demonstrate that we understand the issues companies and consumers face in hard economic times and we know how to leverage available tools to help clients address those issues. They could start by putting together something like one of my old weekly notes.
Of course, some PR folks need a little economics glossary to help them do this. For example, "Leading Economic Indicators" is not a collection of the best or most important indicators. It's a set of data the Conference Board collects to help predict economic activity in the next 6 to 9 months - but just about all of those data, like initial jobless claims and housing permits, are already public by the time the Conference Board reports it. There are also "coincident indicators," like GDP, which are data that move as the economy or business cycle moves. "Lagging indicators" are NOT indicators that can't seem to keep up with the leading ones. They're data such as the value of commercial loans or the changes in consumer prices that help confirm economic activity of the last few months.
All this stuff is important and I would share it regularly with the Senator. But when you're in politics, or communications, you need to find the information that humanizes the economy. Afer all, on paper the economy grew 4.9 percent in Q3 2007 - that's pretty fast - and will still probably grow a smidge in Q4. But that number doesn't seem to jibe with how people are living these days. So the bits of data I'd give the Senator tomorrow would probably include the following:
Home forclosures rose 68 percent in November from the previous November. We've all heard about the "sub-prime" lending mess that the "housing bubble blogs" (there are a lot of them) have been predicting for literally years now. We've also heard about the major multi-national banks writing down billions in debt because they issued unaffordable loans. But the foreclosure number is what will have the real impact on voters in November. Because the US savings rate is so low, people have been relying on their houses as a source of wealth and equity. When adjustable rate mortgages reset, wages remained relatively stagnant, and other costs (like healthcare) continued to rise, people lost their houses. That's a financial and emotional hit that most people won't ever forget.
20 million Americans will use credit cards to pay for home heating this winter. This is obviously a double-whammy. Energy costs are up - frankly, due to demand more than anything else - and people don't have the available cash to make up the difference. This cash flow issue (probably caused by higher mortgage and rent costs, higher health care costs, and stagnant wages) will effectively increase home heating costs by up to 20 percent when you consider interest carried over a few months, putting many Americans even further behind trying to pay for life's necessities.
More Americans will have catastrophic health expenses in 2008. Nearly 1 in 4 Americans under the age of 65 live in a family that will spend more than 10 percent of that family's pre-tax income on health expenses. More than 80 percent of these people have health insurance. This sounds like a health statistic, but it's unquestionably an "economic indicator" in my book. Poor health affects a family's ability to make money, and it reduces the amount it can pay for anything else. Parents - especially poor, single parents - will often pay for healthcare for their kids before they'll pay for healthcare for themselves. This is ultimately a long-term loser, since mom gets sicker, longer, and can't work for an extended amount of time.
Companies have to understand that this is the reality for many if not most of the people they're trying to reach. Since the current conventional wisdom is the Democrats will increase their power in Congress, companies also have to understand that this is the political context in which they'll have to communicate to "opinion elites." Smart, experienced communications professionals - with the perspective of working with Democrats - can help.