If you haven't seen the news, both Greece and Spain have had large protests the past couple of days, with the crowd getting as close to rioting as you can without actually crossing the line in to a full-blown riot.
In Spain it got pretty hairy when protesters actually started attacking police.
In Greece protesters threw fire bombs at the police.
The conventional wisdom is that the public is reacting to Draconian austerity measures. And while this is true, I think the antecedent source behind this behaviour is not the austerity measures but rather more of a PR issue.
People tend to lash out violently when they feel their trust has been broken. For instance, if you went to the doctor and they said that you have cancer, you wouldn't attack the doctor right? Which is a basic example of how people don't necessarily respond violently or aggressively to bad news.
However, if you went to the doctor and they told you that during your last check-up when they took your blood they accidentally used a dirty needle and now you have HIV.... well, the vast majority of people would become enraged. Not only would they want to attack the doctor physically, they would sue the doctor for millions.
So what's the difference between the two situations? The difference is the first situation the doctor didn't breach any trust the patient had in them. In the second situation, they completely breached that trust.
So when we look at Greece and Spain, yes, austerity is the reason everyone gives for people in the streets. But the real reason, I believe, is that the people don't trust the politicians or the banks.
Now, I'm using the word 'trust', but you could easily substitute it with the word 'brand'. Over the past 10 years both politicians and the banking sector have not managed their brands well at all.
Does anyone 'feel' anything towards their bank? At best people are ambivalent towards their bank and the banking sector. At worse, they feel that the banks are crooks who destroyed the economy. In either situation, trust is not a term most people would use to describe how they feel about the banks.
And the same can be said for politicians. In the US anyway, congress gets a 10-13 per cent approval rating. So basically 87-90 per cent of Americans feel their congress is filled with utterly useless politicians.
So in Greece and Spain the reason you are seeing anger bubble up is not so much the austerity as opposed to the reason behind the austerity.
People are waking up to the reality that they were conned. That the banks and the governments ran up massive debts, very little of which was used for the people in any way, and then when everything blew up, the people are expected to pay back these debts.
As a result, the people feel they are being ruled over by crooks. If the felt differently, if they felt that the politicians and banks were not crooks and were responsible, mature and concerned for the greater good, they might not fill the streets in protest. They may simply get to work at rebuilding their country.
But they don't feel that way. Case in point, look at the poster a Greek protester was carrying which compares Merkel to Hitler (the sentiment being that Germany via the IMF/ECB, is imposing austerity upon the Greeks).
The anger people feel comes more from their lack of trust in the politicians and banks who are now asking them to suffering years of further austerity.
This is a breakdown in PR as much as it is the result of austerity.
Neither the politicians nor the banks have really done anything to explain to people why they must go through austerity. They simply have used the line that if they do not, things will be even worse.
Now, there's a reason why no one attempts to manage the public relations in all this, and that is that this is a giant mess that the people did not create. Any type of PR requires an honest dialogue. But if you can't be honest from the get go, then PR will never work (you instead have to go with propaganda).
So if the banks and the politicians were to come out and say that the world fell apart because banks created a giant debt bubble using credit derivatives and politicians worked hand-in-hand with the banks to over-leverage their countries (despite most of the money never 'trickling down' to people on the street) and that as a result there's a mountain of debt that now has to be paid off by 'the people', you can imagine the reaction of the people would not be positive.
There simply is no way to make that sound good. It's clear that what is happening is that the consequences of bad behaviour by a group of people (banks and politicians) is being suffered by a group of people who did nothing wrong themselves.
So from a PR perspective how do you handle this?
My personal view is that it's actually quite simple and we return to our notion of trust for the answer. The only way to regain the public's trust is to prosecute those who broke the laws (ie. throw the politicians and bankers in jail who caused all this).
But we know that is not going to happen because it would require the government going after the banks, who in turn who use their lawyers to say "You can't charge us because it was YOU who removed all the regulations. Hence, we technically didn't break any laws. YOU are the one's who sold out your citizens by letting us commit fraud on a global scale."
(And just to re-cap, the banks basically took junk debt, got it rated as AAA debt, then sold it in the market (which is fraud). In addition, they then insured that debt. So basically they created a giant ponzi scheme built on junk debt rated as AAA debt, and then multiplied their exposure to losses by insuring it. All of this would be 100 per cent ILLEGAL under any sane economic system. But because they were deregulated and because they are too big to fail... they are now essentially too big to prosecute as well, if you could even find a politician prepared to prosecute them, which you won't since the politicians get their campaign funding from the banks and deregulated them in the first place.)
So the politicians and bankers are now holed up in their bunkers while the people take to the streets.
If, by some miracle, those who created this mess were actually thrown in jail, the rioting would end almost instantly. People would accept whatever austerity they had to go through, as painful as it may be, without getting violent or aggressive.
It's actually the fact that their trust was broken, that they were conned, that they are suffering for the actions of others, that creates the anger.
Which is why what we are seeing in Greece and Spain is merely a preview of things to come across Europe and the West. People simply do not trust the people who are running their governments and their economies.
If the powers-that-be has a PR person in the room and were willing to listen to what they said, the best advice they could get is that restoring trust is paramount. Austerity is not what will send a country in to chaos, lack of trust though will.
Restore trust and the entire global economic system would be back on its feet in no time. Yes, it would mean a lot of the bad debt would be liquidated in bankruptcy, but the system would begin to repair itself.
Without restoring trust however this global recession will not get better, and it could very well get much much worse.
While it's easy to see people protesting austerity and think 'clearly austerity is causing this', I think such a conclusion misses the real cause behind people's dissent, which is their perception that their politicians and banking institutions are not to be trusted.
In Spain it got pretty hairy when protesters actually started attacking police.
In Greece protesters threw fire bombs at the police.
The conventional wisdom is that the public is reacting to Draconian austerity measures. And while this is true, I think the antecedent source behind this behaviour is not the austerity measures but rather more of a PR issue.
People tend to lash out violently when they feel their trust has been broken. For instance, if you went to the doctor and they said that you have cancer, you wouldn't attack the doctor right? Which is a basic example of how people don't necessarily respond violently or aggressively to bad news.
However, if you went to the doctor and they told you that during your last check-up when they took your blood they accidentally used a dirty needle and now you have HIV.... well, the vast majority of people would become enraged. Not only would they want to attack the doctor physically, they would sue the doctor for millions.
So what's the difference between the two situations? The difference is the first situation the doctor didn't breach any trust the patient had in them. In the second situation, they completely breached that trust.
So when we look at Greece and Spain, yes, austerity is the reason everyone gives for people in the streets. But the real reason, I believe, is that the people don't trust the politicians or the banks.
Now, I'm using the word 'trust', but you could easily substitute it with the word 'brand'. Over the past 10 years both politicians and the banking sector have not managed their brands well at all.
Does anyone 'feel' anything towards their bank? At best people are ambivalent towards their bank and the banking sector. At worse, they feel that the banks are crooks who destroyed the economy. In either situation, trust is not a term most people would use to describe how they feel about the banks.
And the same can be said for politicians. In the US anyway, congress gets a 10-13 per cent approval rating. So basically 87-90 per cent of Americans feel their congress is filled with utterly useless politicians.
So in Greece and Spain the reason you are seeing anger bubble up is not so much the austerity as opposed to the reason behind the austerity.
People are waking up to the reality that they were conned. That the banks and the governments ran up massive debts, very little of which was used for the people in any way, and then when everything blew up, the people are expected to pay back these debts.
As a result, the people feel they are being ruled over by crooks. If the felt differently, if they felt that the politicians and banks were not crooks and were responsible, mature and concerned for the greater good, they might not fill the streets in protest. They may simply get to work at rebuilding their country.
But they don't feel that way. Case in point, look at the poster a Greek protester was carrying which compares Merkel to Hitler (the sentiment being that Germany via the IMF/ECB, is imposing austerity upon the Greeks).
The anger people feel comes more from their lack of trust in the politicians and banks who are now asking them to suffering years of further austerity.
This is a breakdown in PR as much as it is the result of austerity.
Neither the politicians nor the banks have really done anything to explain to people why they must go through austerity. They simply have used the line that if they do not, things will be even worse.
Now, there's a reason why no one attempts to manage the public relations in all this, and that is that this is a giant mess that the people did not create. Any type of PR requires an honest dialogue. But if you can't be honest from the get go, then PR will never work (you instead have to go with propaganda).
So if the banks and the politicians were to come out and say that the world fell apart because banks created a giant debt bubble using credit derivatives and politicians worked hand-in-hand with the banks to over-leverage their countries (despite most of the money never 'trickling down' to people on the street) and that as a result there's a mountain of debt that now has to be paid off by 'the people', you can imagine the reaction of the people would not be positive.
There simply is no way to make that sound good. It's clear that what is happening is that the consequences of bad behaviour by a group of people (banks and politicians) is being suffered by a group of people who did nothing wrong themselves.
So from a PR perspective how do you handle this?
My personal view is that it's actually quite simple and we return to our notion of trust for the answer. The only way to regain the public's trust is to prosecute those who broke the laws (ie. throw the politicians and bankers in jail who caused all this).
But we know that is not going to happen because it would require the government going after the banks, who in turn who use their lawyers to say "You can't charge us because it was YOU who removed all the regulations. Hence, we technically didn't break any laws. YOU are the one's who sold out your citizens by letting us commit fraud on a global scale."
(And just to re-cap, the banks basically took junk debt, got it rated as AAA debt, then sold it in the market (which is fraud). In addition, they then insured that debt. So basically they created a giant ponzi scheme built on junk debt rated as AAA debt, and then multiplied their exposure to losses by insuring it. All of this would be 100 per cent ILLEGAL under any sane economic system. But because they were deregulated and because they are too big to fail... they are now essentially too big to prosecute as well, if you could even find a politician prepared to prosecute them, which you won't since the politicians get their campaign funding from the banks and deregulated them in the first place.)
So the politicians and bankers are now holed up in their bunkers while the people take to the streets.
If, by some miracle, those who created this mess were actually thrown in jail, the rioting would end almost instantly. People would accept whatever austerity they had to go through, as painful as it may be, without getting violent or aggressive.
It's actually the fact that their trust was broken, that they were conned, that they are suffering for the actions of others, that creates the anger.
Which is why what we are seeing in Greece and Spain is merely a preview of things to come across Europe and the West. People simply do not trust the people who are running their governments and their economies.
If the powers-that-be has a PR person in the room and were willing to listen to what they said, the best advice they could get is that restoring trust is paramount. Austerity is not what will send a country in to chaos, lack of trust though will.
Restore trust and the entire global economic system would be back on its feet in no time. Yes, it would mean a lot of the bad debt would be liquidated in bankruptcy, but the system would begin to repair itself.
Without restoring trust however this global recession will not get better, and it could very well get much much worse.
While it's easy to see people protesting austerity and think 'clearly austerity is causing this', I think such a conclusion misses the real cause behind people's dissent, which is their perception that their politicians and banking institutions are not to be trusted.
Comments
Post a Comment