The Financial Crisis: Perceptions of Business Leaders and Public

1
The Financial Crisis Perceptions of Business
Leaders and Public

• William J. Burns Ph.D.
• College of Business, CSUSM
• Decision Research
• Center for Risk and Economic Analysis of
  Terrorism Events (CREATE)
• http//www.decisionresearch.org/people/burns/
• bburns_at_csusm.edu

This research was supported by the National
Science Foundation under grant numbers
SES-0728934 and SES-0901036. It was also
supported by the U. S. Department of Homeland
Security through the Center for Risk and Economic
Analysis of Terrorism Events (CREATE) under grant
number N00014-05-1-0630. However, any opinions,
findings, conclusions, and recommendations in
this document are those of the author and do not
necessarily reflect views of the National Science
Foundation or the U. S. Department of Homeland
Security.
2
Topics

• Financial Crisis Causes
• San Diego Business Leaders Response
• Workforce, Demand, Business Risk
• Expected Returns
• Ideas for Recovery
• Public Response Nationwide
• Fears and Trust
• Confidence in Markets

3
Sectors in Survey

• Finance and Insurance
• Professional, Scientific and Technical Services
• Public Administration
• Information
• Manufacturing
• Real Estate

4
Sales

• Less than 1 Million 17
• 1 Million - 5 Million 15
• 5 Million - 10 Million 17
• 10 Million - 50 Million 22
• 50 Million Plus 28

5
(No Transcript)
6
Causes of the Financial Crisis

• Greed
• Easy Credit
• Lack of Oversight/Regulation
• Over Consumption
• Lack of leadership

7
(No Transcript)
8
(No Transcript)
9
Past Week
Past Month
10
(No Transcript)
11
(No Transcript)
12
Median 6
Median 10
Median 10
13
Diffusion of Investor Fear Following
Announcements of Potential Financial Meltdown1
Historic High
Reference VIX Index 9/20/2001 44
Election
1 http//finance.yahoo.com. Retrieved data
December 31, 2008.
14
Loss of confidence (Reduced investment rise in
savings)GDP, employment and capital(percentage
deviation from basecase)
15
(No Transcript)
16
(No Transcript)
17
Coping Strategies

• Tightening Expenses/Cost Management 42
• Diversify Business Activities/Looking for new
  opportunities 14
• Better Marketing 14

18
Needed Information from Public Officials

• Truth and Specifics on where the bailout funds
  are going 28
• Indicators of productive activities (spending
  cuts, help for consumers) 36
• Commercial credit and job availability
• More positive and less reactive

19
Governors Role

• Maintain sales tax but expand to cover the
  variety of services 17
• Increase sales tax (1.5 cents) but expand to
  cover the variety of services 15
• Reinstate vehicle license fee 11
• Reduce spending on programs
• Repeal Prop 13

20
Innovative Ideas

• Promote Energy, Clean, Green Technologies
• Enhance San Diego Business Environment
• Cooperation to create world-class businesses in
  carefully selected markets
• Reduce costs of doing business here
• Diversify across industry sectors
• City or county tax credits for job creation
• Promote tourism

21
Nationwide Longitudinal Survey

• Diverse group nationwide ( 800)
• Paid to do survey Online
• Four waves of data so far
• September 29
• October 8
• November 5
• December 17

22
(No Transcript)
23
(No Transcript)
24
(No Transcript)
25
(No Transcript)
26
(No Transcript)
27
(No Transcript)
28
(No Transcript)
29
Threat The Dynamics of Response and Resilience
30
Fear Right Understanding and Right Dialog
Events Focus (Reactionary)
Systems Focus (Causes Perspectives)
Media
National Level
Fear Uncertainty Perceived Lack of Control
Community Level
Preparedness
Global Perspective
Social Support Systems
Debriefings
Policy Engagement
Transparency
Risk Research
Messages
Cognitive Gaps
Perceptions
Testing
31
Essay On Our Policy Response to Terrorism

• http//www.cato-unbound.org