Page last updated at 00:03 GMT, Thursday, 11 December 2008

US needs to take a longer term view

VIEWPOINT
By Michael O'Malley
Executive editor, Yale University Press

Protest outside a home that is under foreclosure in South San Francisco
The human cost of US financial policy is clear

When the invisible hand reaches into the cookie jar, it often is too late to notice that goodies have been plundered.

The parental admonition to wait until after supper for dessert was lost on the many executives who couldn't resist the excruciatingly seductive call of easy money.

And so, in America, with the temptation of the many renderings of mortgage-related profits before them, and with no discernable punishment in sight (indeed, with only praise from boards, analysts, and shareholders) it was a simple matter to take what was there and ignore the longer term consequences.

And besides, everyone else was doing it.

Greater vigilance

The reactive cure for these sleights of hand in American politics is to threaten regulation.

Our collective instincts are to blame a permissive business environment and lack of oversight for permitting what greater vigilance could have prevented.

But what parent wants to stand guard over the cookie jar or eliminate the possibility of theft by banning cookies or gluing the jar shut?

We don't want to be stupid about human nature, but we also don't want to implement policies that make creativity, experimentation and risk-taking obsolete.

There is a failure of leadership in America and it is a failure to convince the population that there is a long term worth working toward and that it will involve sacrifice.

We want to keep the values that make economies vibrant without doing away with values - like trust - that make them work.

And so we are suspicious of too much regulation that negates the very system we wish to promote.

Weakness

It is possible to stop the type of shenanigans we haven seen on display, but probably not without changing the nature of enterprise itself and producing new problems that may be much more severe in their effects.

As long as we are dealing with a market-based economy, then aside from regulations that make exchanges more transparent and fairer, we are sorry to report that we will be faced with the realities of human weakness for a long time to come.

In place of regulations, then, we propose a different solution that places leadership at the core.

As a nation, we seem to have forgotten that the most important goals take time to accomplish, and that lacking this perspective we succumb to what amounts to bribery and pandering - the recipe for winning elections these days is to promise to put money into peoples' pockets…now.

But that seems to be our new timeline for most everything.

In America, we want higher achievement scores...now. We want to spend more…now. We want greater profits…now.

Lost virtues

There is a failure of leadership in America and it is a failure to convince the population that there is a long term worth working toward and that it will involve sacrifice.

Let's hope the new administration can alter our frame of reference and lead us in a more distant direction.

Showcasing the lost virtues of patience and persistence couldn't hurt our national ethic.

No doubt this will be a hard sell since we have become accustomed to stealing from the future to pay for today in government and business.

The mortgage meltdown in America and elsewhere could have been averted if more adults would have been able to delay gratification for just awhile longer.

Michael O'Malley is the executive editor for business, economics, and law at Yale University Press, and co-author of the book "Leading with Kindness"



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