Friends & Colleagues,

Over 10 years ago, I started showing friends and clients a chart of the progression of enlightened public awareness from 1960 to what was then the turn of the century:

Of course, this was before 750 million people worldwide joined Facebook and long before I stumbled onto the notion that we are actually seeing the democratization of almost everything.

My chart tracked public awareness from the debates and first primaries in 1960, through the activism during the Vietnam War and Nixon’s impeachment, and then through the Internet boom, the newly easy access to buying stocks and finally, the backlash against corporate excess in the late 1990s.

I used to predict that activism would extend to sports and almost every institution. I had no idea how small I was actually thinking. Today, that activism has exploded into what I refer to as the disintermediation — a trend towards bypassing those who traditionally filter and provide information to the public — of almost everything.

During World War II, information was delivered days after the fact, in printed form and mostly with still visual images or heavily edited newsreels. The Kennedy years brought us programmed television with the debates and reports of the moon landings using the one-to-many broadcast model. More live TV emerged with the Nixon years, but again in a largely one-to-many broadcast format. The Internet, access to mobile phones, and social media like Facebook and Twitter have upended communication, making the one-to-many intermediaries obsolete and empowering the individual.

We’re seeing sports heroes called into question, governments falling unexpectedly, and almost every institution struggling to stay ahead of public opinion.

I believe that even economic swings, both high and low, are exacerbated by this explosion of public activism and the related loss of confidence in traditional sources of wisdom. Almost every economic leader in Washington — and many around the world — is struggling to say something that appears to show some degree of wisdom about the economy, but the public remains highly skeptical.

From the seemingly sudden, dramatic economic calamity in 2008 that surprised almost everyone to the equally rapid upswing in the early days of the Obama administration, we saw the public reacting to low confidence in our leaders in 2008 by investing unusually high confidence in the new president. What if we are in a new period of economic trends where the democratization of everything, the 24/7 news cycle, the uncertainty of leadership again reaching a high are all actually influencing the economy in more significant ways than economic experts have in their modeling? My friends, who have grown weary of my talking about this, have begun to call this the “Martin Principle.”

Today, we see the Republicans in the U.S. Congress and the president struggling to get a foothold on the government debt issue, each assuming that the tried and true methods of taking their respective messages to the public will secure support for their position. Well, guess what? It’s not working for either side, for this public I love to talk about is not listening to the messengers. They close their eyes and see … Greece.

As you will see in the data I am sharing today, the public is disgusted with both sides and not listening to the intermediaries: what we have is disintermediation.

Certainly our leaders in Washington should be rethinking their approaches to the public. Data from recent NBC News/Wall Street Journal and ABC/Washington Post polls released Tuesday suggest that politicians’ methods of messaging to the public are at least inadequate — if not outdated — for the current debt ceiling debate.

Politicians find themselves in a bind of their own making, one that has grown out of cynical campaign rhetoric that underestimates the public rather than communicates in ways that bypass the media intermediaries to talk directly to the public and take into account the wealth of information that the public has at its fingertips.

The public expects the two parties to come to an agreement. Large majorities of Democrats (62%) and independents (73%) prefer that Democratic congressional leaders make compromises in this budget debate, while almost 70% of independents want Republicans to do the same. Further, 71% believe that the two sides will somehow reach agreement in time to avoid a shutdown, while only 25% think there will be a shutdown. Neither party gets a pass if the parties fail to reach agreement; 57% would blame both parties equally, while the two parties would split the blame equally 21%-21%.

Congress doesn’t start from a position of strength as it sits at the bottom of the reputational barrel, with only 12% of those surveyed saying they have a great deal or some confidence in Congress in a recent Gallup poll, down from its historical average of 26%. The ABC/Washington Post poll finds dissatisfaction with the federal government (80%) at its highest level in 20 years.

Public preferences in terms of spending cuts and revenue solutions leave politicians little room to maneuver. Americans are no different from Europeans, who want the good life to which they have become accustomed but don’t believe they have to sacrifice or compromise to keep it. Inadequate communications have done nothing to convince them otherwise. Cynical campaign rhetoric to win elections without explaining hard choices has left politicians with a public that is unrealistic about what it will take to get the job done.

According to the NBC News/WSJ Poll, the only program cuts acceptable to majorities of Americans include nuclear power plant construction subsidies, federal assistance to state governments, the EPA and transportation and infrastructure subsidies. Further, about half of the public say significant cuts to Medicare, K-12 education and Social Security are “totally unacceptable.” Meanwhile, the targets for deficit reduction include the usual suspects: taxing the wealthy, earmarks for pet projects, defense spending, eliminating tax credits for the oil and gas industry and phasing out the Bush tax cut for high-income families.

To come full circle, my chart of 10 years ago suggested that the trend of activism challenging institutions would continue. So here we are today watching with interest the media expose the media in the form of the extensive coverage of the Murdochs and their issues in London.

What are we to make of all of this? First, there is no substitute for honest, constructive communications with our constituents — no matter who they are. I think we are only at the beginning of a very exciting time in our history and the old rulebooks don’t apply. One thing I can say for sure is that if your public can be defined as customers, voters, employees, stockholders, members, readers, or regulators, you’d better figure out real quick how to eliminate every possible barrier between your message and them.

-Jack

 

 

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