The Crisis Of Confidence Is No More. It Has Metastasized Into A Crisis Of Conscience Caused By A Crisis Of Leadership.
As I briefly tuned into Treasury Secretary Paulson's testimony before Congress yesterday, I was reminded how much trouble we are in. And, how Paulson is deeply complicit. Yet Paulson doesn't seem to understand his complicity. And, indeed that is the fundamental paradox.
If Paulson wants to restore confidence, he should announce regulation of hedge funds, modernize banking regulation, re-institute Glass-Steagall, forbid any off balance sheet accounting by money center banks, put some teeth back in SEC enforcement, go after rampant insider trading by hedge funds, increase shareholder transparency, step up to a strong dollar policy and on and on. Otherwise, personally I believe Paulson should refrain from incoherent public ramblings until he has an announcement involving beneficial policy as he isn't helping matters. People realize his actions are an attempt at pacifying markets because of flawed policy based initially on greed and now based on fear. That will make matters of confidence even worse.
We wrote this as the global equity markets were making new highs. When there was still time left to restore some modicum of confidence. Since then what exactly has any leadership anywhere done to instill confidence of any kind? In fact, the issue of confidence has eroded even further. We have taxpayer funded bailouts for the people that created this environment. These same crooks are paying themselves handsome bonuses while receiving government handouts. All asset markets are collapsing. Government is seemingly unable to develop any type of workable plan for anything. We still have no idea what is going on in our financial system because government refuses to enforce transparency and we have people being booted into the street around the globe. The world is literally coming undone.
It is hard to grasp in the blink of an eye that the entire world has changed so rapidly. I can assure you that no one reading this sentence will ever see a return to the environment that existed just a year or so ago. I mean that literally. Ever. In many respects this environment is worse than the onset of the Great Depression. Firms that have weathered the most diverse of economic environments are failing or are teetering on the precipice.
Leadership is such an uncommon commodity that there is seemingly none available as the global financial system and global economy careens off the road. Where are our leaders of government? Of business? Of society? Where is the leadership publicly explaining this crisis, its potential impact, what is being done to address it and what is being done to restore trust? Not the abbreviated fear-based public pronouncements or the yammering of misinformation or the Neville Chamberlain proclamations. But, the considerate and compassionate explanation and exhortation of a nation. Any nation.
I had a post back in June that said we are experiencing a systemic crisis in leadership. Even then many likely didn't understand the full impact of that statement. But, now more and more in society are starting to appreciate the depths of a world void of leadership. This systemic crisis in leadership didn't start with the current political leaders. Nor is it a political party issue. Frankly, neither is it an American issue. It is a global one.
If anyone believes this crisis of confidence is confined to the banking system or financial system, you might want to reconsider the gravity of this situation. This crisis of confidence is because of a generational crisis in leadership.
The majority of today's leaders don't even understand the traits of great leadership. How can one therefore become what one doesn't understand? How can Secretary Paulson provide leadership when he apparently doesn't recognize its qualities? When it comes right down to it, this is not a crisis of confidence in capital or liquidity or Wall Street or banks or markets or any of the other causes being bandied about. In an odd bout of irony, the systemic crisis in leadership is exactly the reason why we have this environment in the first place. In other words, in many regards it could not have been any other way. And, it has now metastasized into something very dark. A systemic crisis of conscience. Not of society's conscience but of society's recognition of the lack of conscience of those in which we have placed our trust. In those we have elevated to a protectorate position. Those we have entrusted to protect our society, our wealth and our ideals.
Given this development, an expectation that we would see leadership arise from the status quo during this environment would be completely illogical and unexpected. The generational ability is apparently lacking. It's officially time to pass the torch. Leadership will come from the next generation as it always does in times such as this. Leadership will come from the next generation because the market is going to demand it of them not because they are ready to take the mantle. They will be America's next Greatest Generation. Why? Because they have to be. Just as it was with the Greatest Generation.
At some point in the future, someone is going to have to deliver the Fireside Chat with the American people explaining what is going on, how new leadership is doing to deal with this and what the people can expect from its leadership. And, in a great bout of irony, that is as exactly as history would have it.
If Paulson wants to restore confidence, he should announce regulation of hedge funds, modernize banking regulation, re-institute Glass-Steagall, forbid any off balance sheet accounting by money center banks, put some teeth back in SEC enforcement, go after rampant insider trading by hedge funds, increase shareholder transparency, step up to a strong dollar policy and on and on. Otherwise, personally I believe Paulson should refrain from incoherent public ramblings until he has an announcement involving beneficial policy as he isn't helping matters. People realize his actions are an attempt at pacifying markets because of flawed policy based initially on greed and now based on fear. That will make matters of confidence even worse.
We wrote this as the global equity markets were making new highs. When there was still time left to restore some modicum of confidence. Since then what exactly has any leadership anywhere done to instill confidence of any kind? In fact, the issue of confidence has eroded even further. We have taxpayer funded bailouts for the people that created this environment. These same crooks are paying themselves handsome bonuses while receiving government handouts. All asset markets are collapsing. Government is seemingly unable to develop any type of workable plan for anything. We still have no idea what is going on in our financial system because government refuses to enforce transparency and we have people being booted into the street around the globe. The world is literally coming undone.
It is hard to grasp in the blink of an eye that the entire world has changed so rapidly. I can assure you that no one reading this sentence will ever see a return to the environment that existed just a year or so ago. I mean that literally. Ever. In many respects this environment is worse than the onset of the Great Depression. Firms that have weathered the most diverse of economic environments are failing or are teetering on the precipice.
Leadership is such an uncommon commodity that there is seemingly none available as the global financial system and global economy careens off the road. Where are our leaders of government? Of business? Of society? Where is the leadership publicly explaining this crisis, its potential impact, what is being done to address it and what is being done to restore trust? Not the abbreviated fear-based public pronouncements or the yammering of misinformation or the Neville Chamberlain proclamations. But, the considerate and compassionate explanation and exhortation of a nation. Any nation.
I had a post back in June that said we are experiencing a systemic crisis in leadership. Even then many likely didn't understand the full impact of that statement. But, now more and more in society are starting to appreciate the depths of a world void of leadership. This systemic crisis in leadership didn't start with the current political leaders. Nor is it a political party issue. Frankly, neither is it an American issue. It is a global one.
If anyone believes this crisis of confidence is confined to the banking system or financial system, you might want to reconsider the gravity of this situation. This crisis of confidence is because of a generational crisis in leadership.
The majority of today's leaders don't even understand the traits of great leadership. How can one therefore become what one doesn't understand? How can Secretary Paulson provide leadership when he apparently doesn't recognize its qualities? When it comes right down to it, this is not a crisis of confidence in capital or liquidity or Wall Street or banks or markets or any of the other causes being bandied about. In an odd bout of irony, the systemic crisis in leadership is exactly the reason why we have this environment in the first place. In other words, in many regards it could not have been any other way. And, it has now metastasized into something very dark. A systemic crisis of conscience. Not of society's conscience but of society's recognition of the lack of conscience of those in which we have placed our trust. In those we have elevated to a protectorate position. Those we have entrusted to protect our society, our wealth and our ideals.
Given this development, an expectation that we would see leadership arise from the status quo during this environment would be completely illogical and unexpected. The generational ability is apparently lacking. It's officially time to pass the torch. Leadership will come from the next generation as it always does in times such as this. Leadership will come from the next generation because the market is going to demand it of them not because they are ready to take the mantle. They will be America's next Greatest Generation. Why? Because they have to be. Just as it was with the Greatest Generation.
At some point in the future, someone is going to have to deliver the Fireside Chat with the American people explaining what is going on, how new leadership is doing to deal with this and what the people can expect from its leadership. And, in a great bout of irony, that is as exactly as history would have it.
<< Home