Over the past sixty days the word "hubris" has repeatedly crossed my mind. Hubris is a Greek term referring to overwhelming false pride. Simply put, hubris can delude you into making presumptions about your own abilities that are vastly inflated. As a direct result, you engage in behavior that encompasses a far greater of a degree of risk than you can really handle. Hitler and Napoleon both choosing to invade Russia at the apex of their powers are classic examples of overreaching due to inflated notions of ability. The old saying about "it seemed like a good idea at the time..." refers directly to ill circumstances that oftentimes derive from hubris.
To backpedal a bit, the reason why hubris has been so much in my own mind is that I, or, more specifically my company Mile High Comics, have been savaged by the current financial crisis. That is not to say that we have suffered any worse negative effects than any other retailer in America, but rather that we have not been nearly as immune to the current financial suffering as I would have first believed. My own case of hubris had me firmly believing that my years of effort at shoring up our comics inventories, building our mailing list, and maximizing our website content would insulate us from most of the ill effects of any possible financial recession. Hah! My own efforts certainly helped keep conditions from being any worse, but when the idiots in Washington threw the magic switch on October 10th that somehow caused an enormous number of consumers to completely stop spending, we went from seeing our year-to-year comparative sales growing +21% for all of September, to our sales dropping a gutwrenching -30% during the second half of October. In my 38 years of experience, I have never seen things go from good to bad, in such an unbelievably short period of time.
Where I am going with all of this is that I have now been firmly reminded that we all need to be careful not to fall into the trap of believing that those events that have already occurred in our lifetimes actually define the absolute limits of what potentially CAN happen. As we all now know quite clearly, the world economy is far more interdependent and fragile than was ever believed possible. A burst housing bubble in the USA has caused massive financial losses at financial institutions around the world, with the resulting credit crunch creating a savage recession (depression?) that is causing the economies of even the most conservative nations in the world to rapidly contract. Fear is spreading wildly, and that fear is causing consumers to cut off their purchasing of all consumer goods, almost overnight. Simply put, I have never experienced such instantaneous financial trauma in my lifetime.
Where this all becomes more than a bit ironic is that I, a long time student of economic history, failed to see the danger. Over 35 years ago, I was entranced by John Kenneth Galraith's THE GREAT CRASH - 1929, very possibly the best book ever written on the origins of the Great Depression. In it, Galbraith clearly explains why our institutions failed us in the period from 1929-1932, and even explains why many of the New Deal recovery programs of Franklin Delano Rosevelt failed to resolve the Great Depression. Had I but remembered Galbraith's outline, I think that I might have foreseen the present financial crisis much more clearly. Instead, however, in my own state of hubris, I presumed that because I had already survived everything that the world could throw at me for the past 38 years, that I was insulated from any financial recession. I now know better.
Now that I have suffered through swallowing the bitter pill of my comeuppance, I am moving forward as quickly as I can. At Mile High Comics we have savagely slashed costs, cut our comics prices, and then cut our prices again. I've gone so far as to sell some comics on my website for only 38 cents each, which is below my labor cost for grading and shipping them. Blessedly, our efforts are seemingly paying off. We are giving up vast numbers of comics for a relative pittance, but we began to see some measure of recovery in our gross sales at the end of November, with the beginning of December actually running ahead of December of last year. Being back in positive territory is great! In light of the current unpredictable circumstances, however, I have still scaled back our expectations for this holiday season to that of only hoping to match last December's sales. If we exceed last December's sales, that would be wonderful. Nonetheless, I am still being quite conservative. Simply put, Heaven only knows what January will bring...
For those of you who buy, read, and collect comics, an interesting sidebar to this story is that our sudden sales decline only affected our online sales. Our retail stores continued to show strong sales increases during October and November. This was actually what I would have expected, as comics have been quite popular during past recessions. Since e-commerce is nearly completely dependent upon consumer willingness to use their credit cards, however, our website sales fell apart when the season of fear began. That sudden unwillingness of consumers to use their credit cards is completely unprecedented in our history, and is what really threw the curve into my original projections. That having been said, I have organized successful financial retreats several times in my career. Even with that past experience to comfort me into believing that the steps that I am taking are right and proper, do not think for a moment that retreating is not painful. It just kills me to have to devolve, destroying years of careful growth in the process. In addition, where I worry most today is in the potential for a self-feeding downward economic spiral during 2009, as nationwide waves of layoffs lead to lower consumer spending, which then leads to even more layoffs. That's where Galbraith's theories encourage massive spending by the government on infrastructure projects to both inject working capital into the economy, and to also to simply create jobs. This kind of massive government intervention is reportedly the plan of the incoming Obama administration. I really, genuinely hope that they can pull it off...
I'll close out today's column by reiterating that my sense of hubris has now been significantly diminished. I still believe that I've positioned Mile High Comics, as well as can be expected, to withstand the buffeting of our continuing financial storm. Given that we are in completely uncharted territory these days, however, I no longer feel that I am in any measure of control. I'm still cautiously optimistic about the future of our country in general, and comics retailing in particular, but only if things don't go completely to Hell. Together, we'll just have to wait and see what tomorrow brings...
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your letters to:
Mile High Comics, Inc.
Attn: Chuck Rozanski
2151 W. 56th Ave.
Denver, CO 80221