How can the economy survive when the news is bad? Part of the problem is that many of us are getting information from 20-second sound bites, rather than a more complete analysis of what's going on. Let's put things in perspective.

In terms of current dollars, we've no doubt witnessed the greatest loss of wealth in the equity markets in history. However, immediately before that we had one of the most sustained increases ever. In fact, markets have now returned to price/earnings ratios that for decades were considered more than reasonable.

We're also witnessing the largest number of initial jobless claims per week — with more to come. But as a percentage of the work force, jobless claims fell well short of the levels reached in previous downturns.

Nevertheless, we do have a problem — and management bears much of the responsibility. Companies used cheap capital, ignored long-term earnings in the dash to short-term market-share gains, and in general made bad decisions because they weren't totally accountable for failure.

In many industries, manufacturers have taken the risk out of buying their products. In trucking, for example, this was accomplished by giving customers guaranteed residuals and cost per mile, and fixed financing. Companies focused on product durability at the expense of productivity.

Our system works on a delicate balance of investment and profit. It's been tested before and we've seen a return to an appropriate cost/price structure. But I'm not so sure it will happen this time.

As I see it, one problem is the way we train professional managers. A significant portion of the “meat and potatoes” content of their education has been replaced with what I call whipped cream. We need people who know a duck when they see one. We have too many short-term managers who reap financial rewards even though their businesses ultimately fail. They'd be making very different decisions if their compensation were based on the long-term consequences of their behavior.

Then there's the issue of the world economy and its impact on our businesses. Many manufacturers have discovered that it's less expensive to use overseas suppliers. The disadvantage is that we have to transport the parts and products to the U.S. But it also gives us access to new markets. If an overseas supplier benefits from having a U.S. company as a customer, shouldn't it send some business our way in return?

If multinational companies are forced to seek less expensive unit production outside the U.S, we'll have to rely even more heavily on small- to medium-size businesses to create jobs here. This means increasing our investment in the factors that support this business segment.

One of those factors is our distribution system. We need to improve it significantly, as well as invest in the infrastructure necessary to support the movement of goods.

Since our scarce tax dollars are becoming even scarcer, we need accurate information to help us decide how to use them wisely. This means gathering reliable data to identify the trends in delivery systems and equipment requirements that will enable equipment developers, distribution-system designers and infrastructure planners to meet future needs.

We all need to better understand the decision-making that affects how goods and services ultimately get to market — no matter what our role in the supply chain. The consequences of constricting the flow of goods will be far-reaching, causing harm to the economy that could be difficult to overcome.