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Friday, October 28, 2022

What Caused the Current Crisis?

The world is spinning through a dangerous downward spiral. We are caught up in a financial crisis of epic proportions. Comparisons with the great depression take place every hour. Regardless of whether or not it is bigger than the great depression, we need to give serious thought to the possible reasons behind it.

The financial crisis is just one of many crises faced by humanity. The threat of terrorism is constantly present. There is no evidence that it has abated one bit. In fact, some developments point to the contrary. For instance, the region of SWAT in Pakistan being taken over by the Taliban is a giant step back into the dark ages. The whole of Pakistan is a tinder box, ready to explode any moment.

Then there is the ever growing divide between the very rich and the very poor. The long term consequences of this phenomenon will be no less significant than large scale terrorism. A Gallup poll today shows that while 34% of respondents feel that the standard of living is getting better, 45% think it is getting worse.  A recent CNN poll shows that Americans trust politicians more than business leaders. When was the last time people felt that way? We humans have to get together and address this issue now.

Why is all of this happening? How come we are so much worse off in so many ways while we claim great inventions and improvements in all walks of life?

The quality of human leadership is largely responsible for this unfortunate state of affairs. Let us face it, national and corporate leaders affect virtually everything today. Their decisions ripple through very large segments of society. They touch every nook and cranny of the world.

Just look around. Can anyone claim that the world is governed by leaders who we feel proud of? Can we say we are proud of our business leaders? The answer is a resounding “NO”.

So why is this happening? Here are some possibilities.

Too many of us are bringing up our children to be greedy and uncaring. Parents have simply not been sitting with their children and talking to them about the enduring values of humanity. They don’t share stories of people who made great sacrifices for others. We have slowly but steadily become ‘HUMAN DOINGS’ from human beings. We have filled every moment of our lives with things about work, making money, and then some more money. We don’t devote time exclusively to our little ones long enough or often enough. And when we do, we exhort them to be successful, be macho, get out there and make it happen. We drill the need for success so incessantly that the end justifies the means, and sense and sensibility are lost in the cacophony.

Children grow up learning to be selfish, and to make it at any cost. The only currency they comprehend is the physical. Much of the appreciation is in the form of money. We end up developing digital versions of one dimensional men and women.

These thoughts slowly seep into the subconscious mind and ultimately turn into habits one day. They are then reinforced in business schools. Business schools teach that greed is not just good, it is great. We end up developing business men and women who arrive at the workplace, aiming to make as much money as they can, for themselves. That is precisely what Joe Cassano of AIG and his colleagues on Wall Street did when they created those toxic weapons of mass financial destruction, gave them exotic names such as CDOs and CDSs, and sold them to unsuspecting investors across the world. That set off the current volcanic eruption.

Just look at the ads projected in the media. There are few expressions of kindness, bravery, chivalry, or hard work. Athletes, supposed role models for our youth, use steroids, collect multimillion dollar checks, say ‘sorry’ when caught, and carry on as before. Too many ads show success in a single minded way – flashy cars, huge houses, expensive jewelry, and gorgeous looking mates. Somehow we have subliminally begun to believe that such possessions stand for success. Unfortunately, they are the misunderstood to stand for happiness as well.

We are on a seemingly endless journey of more, more, and some more. Restraint has no place except in the dictionary. Excesses are the norm. No wonder there are lobbyists like Scott Talbott claiming that regulating Wall Street will kill its innovativeness. The world has had enough of Wall Street’s innovativeness for a century. Talbott even had the gall to claim that the foreclosure bankruptcy plan would undercut everyone’s efforts to help the housing market. He is paid to say these things by his greedy masters. The Talbotts are thieves masquerading as lobbyists, advocating more self-regulation. The media should shun these charlatans. How much more carnage will it take for these people to recognize that their greed has destroyed millions of people across the world?

What do we do when there is more crime in the neighborhood? We augment the police force, and set up more neighborhood watches. We don’t dismantle them. Self-regulation can work only when people have been brought up on a diet of sensibility, kindness, and reason.  

That is what the government should be doing now. Beef up the regulating agencies, attract the best talent, encourage corporations to become the stewards of society, and take draconian measures to punish wrongdoers. This is different from Bernie Madoff languishing in his Manhattan penthouse while the people whose money he stole have lost their homes. What kind of justice is this? You can bet that a plea bargain is in the making as we speak. His crooked lawyers will also enrich themselves and get plenty of airtime in the months to come. No self-respecting lawyer should be willing to take up this case. That would point towards a new standard of ethics in the world.

At the same time, we need to review what we do at the dinner table and our business schools.  We need to set ourselves a target to transform the national thinking in ten or fifteen years, while simultaneously working on tightening the loopholes available to businesses and government agencies to look the other way.

This is not the time for less regulation. We humans have not given a good account of ourselves, so we need to learn what self-regulation is. While we learn it, we need external help to keep us from swaying away from what is right.

This is an inflexion point in the history of this world. Let us seize the moment, and lift ourselves out of the hole into which we have driven ourselves.    

Written by Sam Swaminathan