The failures of Lehman Brothers, Merrill Lynch, and Bear Stearns, the three biggest financial management firms in the US paints a picture of how organizations fail.
Unfortunately, it also casts a reflection of our government for the past eight years.
But most importantly it offers us an opportunity to explain how the Obama administration will make government work again, prevent failures in the future and contrast against continued Republican orthodoxy.
First, the Triangle of failure.
These financial giants failed for three basic reasons:
- Opaque Disclosure: These companies were a black box to financial analysts. They would not share their true financial status with their investors, analysts, and regulators.
- Gambling with other people's lives: These companies were willing to take on massive amounts of risk because they were using other people's money and livelihood to do it. It's easy to gamble with other people's money.
- Incompetent, management at the top with ulterior motives: The companies that survived this financial crisis (BofA, JP Morgan, etc.) all did so because of VERY good management that was dedicated to taking care of the interests of their shareholders and customers. NOT taking care of the interests of people outside the company.
Do any of these sound familiar? The Republican mantra for the last 8 years has been to hide things from the American People, to gamble on a risky foreign policy using other people's money and lives as the chips, and to employ incompetent leadership at the top who are there not to serve the interest of their stake-holders but to serve the interest of their friends.
The failure of Lehman Bros is a very real example of what can happen with a mix of bad management, lack of transparency, and taking risk with other people's lives and money. McCain's economic policies offer more of these:
- Bad Management - McCain himself has said he doesn't understand the economy. Does it get any less competent than that?
- Gambling with other people's money and lives - McCain promises turning over the public trust to continue to spend money in Iraq, it's OUR money, not his.
- Opaque disclosure - Where are Palin's Financials? McCain's medical records? What would McCain do about opening the meetings of energy task force to public review (a la Dick Cheney). What do the lobbyists running his campaign have to say about why John McCain won't talk about his economic policy? The ultimate example of lack of transparency is the fact that McCain refuses to talk about issues and instead uses the smoke screen of controversy.
Granted, everyone isn't going to find an analog between the current financial situation and their person situation. But the fact is, a LOT of American's are invested in 401Ks, and invested pensions. You may know someone for whom this financial crisis looms large. When you talk to them remember, there are very concrete reasons why these companies failed. Those mirror the Republican governing model. This is another concrete example of how large organizations fail and hopefully we can use it to our advantage.