Living In A World Of Extremes

Dear Client and Employee Partners,

1. Hard Brexit or Reverse Brexit

2. Interest Rate Increases or Interest Rate Decreases

3. Red Hot Economy or Imminent Recession

4. Socialism or Hard Right

5. Sky High Energy Prices or Collapsing Oil

6. Re-elect or Impeach

7. Amazon Please Come or Stay Out of Our City!

8. Wall or No Wall

9. Technology Companies Revolutionizing How We Live or Break Them Up!

10. Open Borders or Closed Borders

11. Nationalism or Joint Cooperation

12. Tariffs or Free Trade

The list goes on and on and on….

It feels that today we live in a world of passionate extremes, with both sides believing their opinion is absolutely 100 percent right. We are not talking “mostly right,” or “75 percent right,” or even “90 percent right.” We are talking black and white “100 percent right!” Wow, in a complex world including some of the complicated issues above, is anything really that crystal clear?

To be fair, the media is having a field day in today’s world and it sure feels like they are adding a lot of fuel to this bonfire. It’s really not fair to blame them because when you step back and think about it, what is their main job? Yes they want to inform and do a public good by being honest and fair, and drive for the truth. In fact, many of them do a decent job in this regard. But what is a media company? It is a “for profit” enterprise that is responsible to shareholders and other stakeholders. Their executives are operating businesses that employ lots of people and have responsibilities to meet payroll, provide careers, grow revenues and produce financial results. People today (and this probably hasn’t changed and maybe never will) are entertained, educated and kept interested by reading and watching opposing sides aggressively slug it out. We are not saying all the world is a UFC match, but people get very bored watching calm, balanced and thoughtful people discuss the intricate pros and cons of grey issues. It just isn’t enough fun for most people. They would much rather see two loud people duke it out publicly with absolute conviction in their diametrically opposed competing opinions.

All this said, there is reason for optimism and perspective.

First, most rational people in the world will recognize that issues like those above are neither black nor white. Greyness, nuance, tradeoffs, details, compromise and factual debate are all good and healthy. Getting to the right compromise answer is much more important than espousing one’s ideological and borderline “religious” belief. Just like in geography, most of the world does lie somewhere between the polar extremes. The voices of people who are “100 percent right” merely serve to sway on the margin the large population that lives in between them. On almost every economic/political issue, compromises are forged, conditions are attached, incrementalism wins the day and the life or death decision never comes to having to be decided in the manner demanded by the extremes. Yes, there can be grave mistakes that allow things to spin out of control, but in our experience even those extreme cases result in after the fact adjustments that ultimately allow for more time, which allows things to settle and better solutions to present themselves.

The point of our note today is merely to highlight that all of today’s pressing issues that may seem impossible to adjudicate will most likely find their way to ultimate compromise. It can take hours, days, weeks, months, years or decades. The ones that “take decades” probably need that long runway because of their complexity and the requirement for the realities around the issues also to change. In fact, sometimes the world itself must change before these issues can be properly addressed.  The concerns that take “hours, days or weeks” probably don’t deserve to be on the list of critically important societal issues. It is the ones that take “months that may turn into years” which occupy the most intellectual and emotional bandwidth of people who invest in or lead companies. These are the issues that the people on the polar extremes are demanding need to be solved immediately. They also are the ones that have such critical importance that they can’t sit for a decade or more to pass or the world around them to adapt.

A. Despite all the pedantic loud voices we hear, compromise most likely will rule at the end of the day. While we need to listen and learn from the passionate energy around us, we should also accept the way the world realistically works, not overindulge in the process of considering and fretting about the global large issues, and focus on the individual day-to-day and strategic pressures we face in our own complex businesses and lives. If we stay focused on what we can affect and control, and make the best choices for the companies we run and the investments we make, the world of extremes will eventually settle. We then can all sit back and wait for the very next (new) set of urgent and diametrically opposed views to present themselves. They always do.

B. While we can’t readily change the reality of the macro issues and the extremes that are in contention, we can each make the world at least a little bit better and, as leaders, we can engage others to join with us in this effort. If we increase the civility and community mindedness in our own families and work units, the world will surely be a better place.

C. When faced with opportunities to express our own views on issues and choices, including electoral choices, we can dedicate the time and energy to do the real work to assure our views are based on the facts and the full picture, and not merely sound bites, emotions and personalities.  The quality of our choices matter today even more than ever.

In partnership with all of you as we see and live through the greyness together,

Rich and Brian

 

RICH HANDLER
CEO, Jefferies Financial Group
1.212.284.2555

rhandler@jefferies.com
@handlerrich Twitter | Instagram
BRIAN FRIEDMAN
President, Jefferies Financial Group
1.212.284.1701

bfriedman@jefferies.com