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Ethical aftermath of the market meltdown

Following the rise and fall of the world’s economy is exhausting; we are all weary living in the chaos. Yet there are silver linings…moments of clarity, humility and truth by leaders:

Former Chair of the Federal Reserve, Alan Greenspan U.S. House Committee on Oversight and Government Reform…Observing the humility of  this long-standing champion of the free market is remarkable: “Those of us who have looked to the self-interest of lending institutions to protect shareholders’ equity, myself included, are in a state of shocked disbelief,” he said. The market had gotten out of control.

United Nations Secretary-General Ban Ki-moon reported to BBC that world leaders must help poorer nations navigate this global financial crisis. the International Monetary Fund adn central banks may even have to set up an emergency credit lines for impoverished countries.

In the U.K., the Ethical Trading Initiative recently celebrated its 10th anniversary – this is a movement among retailers, suppliers, trade unions and others to ethically and collaboratively manage supply chains in a globalized economy.  The caution? Make sure that this economic meltdown doesn’t cause us to forget the vulnerabilities of workers in poorer countries along our supply chains.

For richer or poorer, in sickness and in health, our global economies are connected.

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  • Alan Greenspan a silver lining … of a leader? The Alan Greenspan, the regulator not believing in regulation? The one whom experts including Joseph Stiglitz blame to be in part responsible for the crisis ( link )?

    I think there must be some hidden irony in this post which I don’t get.


    • a recently honoured mr. paul krugman already wrote in 2005 in a then much discussed commentary this about mr. greenspan:

      But his words of wisdom come too late. He’s like a man who suggests leaving the barn door ajar, and then – after the horse is gone – delivers a lecture on the importance of keeping your animals properly locked up.

      full commentary.

    • Fair comment! Let me be clearer. What is ironic (and even infuriating) is the after-the-fact confessionals by people, like Greenspan.

      Have you read Greenspan’s recently published memoirs? In his book, Greenspan explains the motive for the 2003 Iraq invasion:“I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil.” Now he admits that self-regulation of the free market didn’t really work to curb the negative impacts of reckless spending. Greenspan didn’t accept full blame for the market meltdown, but Greenspan did concede that the exotic and complex financial vehicles that fueled the crisis had gotten out of control.

      Wouldn’t it be amazing if “leaders” could be this honest while in positions of power?

      Let me also point you to Christian realist Reinhold Niebuhr who encouraged a disavowal of pretension.  In 1952, Niebuhr addressed the American people in his book, The Irony of American History. The Second World War was over, thanks to the atomic bomb, and America had just become the most powerful nation on earth.  Then, communism was the dragon to be slain, and with uncanny similarity to Al Qaeda, this inflexible enemy had the audacity to claim divine purpose.  Niebuhr’s advice to America in 1952 remains relevant: “For if we should perish, the ruthlessness of the foe would be only the secondary cause of the disaster. The primary cause would be that the strength of a giant nation was directed by eyes too blind to see all the hazards of the struggle; and the blindness would be induced not by some accident of nature or history but by hatred and vainglory.”