A Crisis Begging To Happen

Hindsight aside, if no one paid any attention to falling interest rates and layoffs over the past fifteen years, we almost deserve to be in the soup that we're in.

Some people say they never saw the Wall Street meltdown coming. Question: where were they looking?
I was invited to a dinner party last year where one of the guests pointed out that a certain amount of capital invested twenty years ago would have generated an extraordinary sum by today. He went on to say a similar result would be likely over the next twenty years.
When I hear or read references to the returns on historical investments, I usually cringe. Promoting the stock market as the source of great fortune, without qualification, is damaging and unfair to the public.

I have been advising people that, as of year 2000, financial markets would not be the same as in previous years. The key reason for my viewpoint is based on suspicions that leadership has taken a back seat to greed for decades.

An excessively compensated corporate executive begging Congress for billions of dollars to get his company back on track doesn’t impress me. On the contrary, it tells me management is inept. How can you take a high salary for running a company that loses money selling a product that’s in high demand?

It’s probably clear by now that the common denominator among the key markets is greed. I believe that, in every case of collapse or failure, the cause for the current financial crisis is lack of respect for consumers and taxpayers. We all have received the proverbial wake-up call that I believe has been delivered to two fronts. Wall Street and big business cannot continue to run rampant with their lack of ethics. Meanwhile, the consumer must not continue to think the U.S. economy is a distant, mystical force that cannot be defined.

I believe one of the best things that could have happened in America is the prospect of a new forum that can alert each of us to the causes and effects of irresponsible spending. While government leadership is crucial, we should all be a little more aware of the indicators that show the direction of our economy. Our finances, both personal and collective, will be jeopardized if we continue to be influenced by propaganda that impedes on our intelligence.

One of America’s key problems is that an economy that was once built on production, leadership and integrity is now gasping for survival due to faulty principles of spending and credit.

The sight of three highly paid executives sitting before Congress with hat in hand, begging for a hefty bailout, is the sorriest visual I have ever witnessed in my 50 years in business. If the Big 3 receive financial aid – as I believe they should – the lesson from this unprecedented debacle should be learned by everyone, from business school levels and upward. Can the motto inscribed on the U.S. dollar bill be that hard to take?

Hudster