“Have You Recovered?”
It has been one year since the economic tsunami swept across our world. There were lots of financial volcanoes bubbling with excitement, building pressure and spilling over. It became very evident that we did not have lots of volcanoes, but rather outlets under a sea of molten financial foundations with unstoppable pressures. In panic, some of the eruptions were temporarily plugged with financial corks, borrowed from our future, but a big one went and blew up. In the Straits of Wall Street, our own Krakatau, aka Lehman Brothers blew its top, exploded and sent a blanket of financial darkness around the world. The effects were a big contributor to meltdowns that nearly destroyed our capacity to transact business.
Economists have packaged the last year into a classification that fits the lexicon, and called it a Recession, something that happened before, but a bigger one. Yesterday, Chairman Bernanke indicated that as he reads the chicken bones on the dirt, the Recession is ending, but unemployment is not likely to improve for a long time. Some stay still that recovery will not be at all like those we have experienced and that fragility still underpins our economic systems… Some add that the behaviors we found offensive on Wall Street have not changed, and with fewer big players owning the game (my recollection of economics would use the term oligarchs), transparency into behavior is still at serious risk. I’m not feeling better about this Recovery just yet.
President Obama is raising the flag of urgency with the oligarchs, “Unfortunately, there are some in the financial industry who are misreading this moment. Instead of learning the lessons of Lehman and the crisis from which we are still recovering, they are choosing to ignore them. They do so not just at their own peril, but at our nation’s. So I want them to hear my words: We will not go back to the days of reckless behavior and unchecked excess at the heart of this crisis, where too many were motivated only by the appetite for quick kills and bloated bonuses. Those on Wall Street cannot resume taking risks without regard for consequences, and expect that next time, American taxpayers will be there to break their fall.”
It’s troubling that while we fight a potential pandemic of swine flu on one front, we may have left the dangerous spread of the “hubris flu” still unchecked. What I read so far indicates that we’ll be fighting the symptoms of “hubris flu” by withholding any more “cash shots” in the arms and increasing the use of thermometers (regulation) to find those with fever symptoms to isolate or confine. History is replete with evidence that oligarchies are very susceptible to the hubris flu and these flu strains are typically antidote resistant. They have become resistant by adapting to prior treatments, a bit of Darwinism. Also, the “hubris flu” is deadly, even for those that don’t have it, but are near.
Within the hubris stricken are good people who are capable of getting well, but only from their own will and effort. Compliance suppresses infections, drives them further into the dark and delays transparency. Many of the health improvements must come from a wellspring of personal purpose, ethics, values, and a commitment to a greater purpose, be it national, social, or societal. We have all been changed, for the better or worse, by the Lehman Krakatau eruption. Public trust has been lost for many of the systems and leaders that had our faith, blinded for many. This trust cannot be legislated, mandated, or regulated back. It must and should be earned. All of us must challenge our decisions and actions against the higher standard and expect more from leaders to end illusionary wealth creation and real wealth destruction.
President Obama is clear that more principled initiative and leadership is essential from within, “One of the most important ways to rebuild the system stronger than before is to rebuild trust stronger than before – and you do not have to wait for a new law to do that. You don’t have to wait to use plain language in your dealings with consumers. You don’t have to wait to put the 2009 bonuses of your senior executives up for a shareholder vote. You don’t have to wait for a law to overhaul your pay system so that folks are rewarded for long-term performance instead of short-term gains. . . . It is neither right nor responsible after you’ve recovered with the help of your government to shirk your obligation to the goal of wider recovery, a more stable system, and a more broadly shared prosperity.”
So, back to where we started, is the Recession over and are we in Recovery? If Recovery means getting back what we had and how we were, I hope not. I would welcome a transformation led by a team different than Recovering Hubrisholics.
Recovered yet?
