Last Updated Sep 26, 2008 9:12 AM EDT
If we are to believe Hank Paulson, the US Treasury Secretary, the financial sky is about to fall down. The only solution is to nationalise the banking industry, so that the US can become the leader of world socialism.
Or it is to pay vast amounts to greedy bankers who caused the problem in the first place. Either way, $700bn looks like it is about to poured down the sewer as fast as possible. At times like this, being a sewer rat becomes an attractive option.
In truth, the sky is not about to fall down. If the bureaucrats and plutocrats wanted to find out what a real crisis looks like, they could come with me on one of my trips to the highlands of Papua New Guinea.
Last time, we could not visit the first village: it had been burned down. At the second village, all the children drew pictures of burned houses, dead people and chopped down crops. We were escorted by 30 warriors back to the nearest town where we met the local magistrate, who had just been held up at gun-point on the highway. And that was before the tsunami struck.
The current crisis is not about toxic assets, regulation, leverage and complex financial products. The root cause of the crisis is much more simple. The crisis comes from a failure of values, not of regulation.
The tribes can teach us a thing or two about dealing with crises. It starts with leadership.
The tribes look for three things from a leader:
In the financial crisis, they are delegating the solution to the taxpayer, who is expected to bail them out.
- Courage. Tribes require physical courage, whereas business leaders need courage to make tough decisions and take people where they would not have gone by themselves.
- Contribution. Tribes want leaders who can give to the tribe. Money, wisdom, power, access are all things leaders can give. Businesses need leaders who focus more on what they can give to their organisation than what they can take out in terms of bonus, pension, stock options and all the other trappings of success from trophy house to trophy spouse.
- Responsibility. Tribal leaders are expected to take responsibility. Business leaders are good at taking responsibility for success but become like Macavity the cat when there are problems -- they become invisible and they get very good at delegating blame onto others.
If Wall Street bankers had focused on courage, contribution and responsibility instead of greed, we would have no crisis. Meanwhile, the bureaucrats are talking about changing the regulatory regime.
You cannot regulate values. Regulation addresses the symptoms, not the causes, of the problem. It is as useful as putting spot remover on a child's face to cure measles. The symptom may go away, but the disease will not.
Tribes also teach us how to deal with disaster if it really does strike. I was in the tent of a nomad in the middle of the Mongolian steppe. Nomads keep the absolute bare minimum of possessions to survive winters where the temperature can hit -40 degrees centigrade. At the end of our interview, I asked the nomad if there was anything she needed. She looked astonished. "Why would I need anything? I have everything already. I have my family, my friends, my health. What else do I need?"
In the hunt for the next car, handbag, pair of shoes, exotic holiday, latest phone or other stuff, we often lose sight of what can really make us happy. If we know what is important, we do not have to join in the suffering of greedy Wall Street and City bankers.