I’ve been reading The 80/20 Principle and could not help to see the link between this old rule and the current economic conditions.
The principle states generally that 20% of inputs are responsible for 80% of outputs. In the case of the current economy, 20% of the causes, are responsible for 80% of the problems. So let’s look at two things.
- The number of employed people is over 92%, yet the perception of jobs is that there are not any.
- The number of foreclosures is under 5%, yet the perception is that everyone is having to loose their homes.
It also seems that fear and uncertainty is driven by even lower percentages than 20%. The doom and gloom seems to creep in at about 5% to 8%.