18 Jun Some say the world will end in stupidity…
Everyone I know is anxious.
Those who are employed are worried about how long their jobs will last. My entrepreneur-friends are all anxious that they are not making enough money, not getting enough recognition, not realizing their goals fast enough, etc. Of course those who are neither working nor “entrepreneuring” are also anxious.
If we are going to eradicate the root of our economic problem, we must embrace the possibility that these three propositions are true:
- Balance sheet realities largely determine economic reality.
- Information, in today’s complex world, has many powerful gatekeepers standing between ordinary individuals and the whole truth.
- Our generation studiously hides our insecurities (am I hard enough? rough enough? rich enough?) behind a thick veneer of entitlement. We are helped by a collective amnesia about the connection between information and value.
Alas, institutionalized concealment of information to further the agendas and interests of the powerful is driving our economy into the ground. For evidence, we need look no further than the Credit Crisis. Trusted credit information monopolies failed to provide updated performance information on structured securities. Their “oversight” enabled powerful financial institutions to misrepresent the quality of securities they placed, defrauding investors, freezing up the credit markets and clogging the financial system with unwanted risk. Five years later we are still talking about reform, and not because we lack the requisite information. We simply lack the will. We are paralyzed by a fear of renovating the information layer lest the entrenched interests, with their pet theories, lose their grip on the economy, leaving us to think for ourselves.
We amuse ourselves with squandering wealth we did not make, on bubble concepts with the right in-crowd attributes and feel-good factors, while those who would contribute to our stock of high quality capital go unfunded.
Whatever you may think of FDR’s economic solutions, he was right about fear.