CONFIDENCE: Final Thoughts

HAVING CONFIDENCE OR ACTING CONFIDENTLY?

That is the key question, the key difference: the passive state of enjoying confidence or the active state of affirming it?

Efforts to measure the confidence of consumers or the investing public easily miss the point that passive confidence means little more than ungrounded optimism, a desire, a wish. Saying that you have confidence is saying little more than that is how you prefer to see yourself and others.

To mean anything, confidence must stem from understanding and rely on a sense of control. It is a basis for action, not opinion.

Poll takers and consumer researchers tend to stay at a superficial level because there really isn’t that much difference between taking one brand off the shelf or another, or pulling down one of two levers in a booth. Real confidence has to involve something more, a commitment to put down $20,000 for a new car, or to sign a mortgage requiring substantial payments over 20 years. But the recent credit debacle has revealed that, even in those circumstances, consumers were misled by a false sense of confidence, or by false promises.

Do we really want to know what is the real confidence of consumers or investors? Or do we just want them to resume their optimism and get back into debt, whether or not they can make their payments. Put baldly like that, I doubt anyone would say the latter. And yet without any change in our measures or our habits, that is actually too likely to happen.

We all want to believe that recovery is around the corner. Encouraging a boom that leads to another bust would be one way to help it along.