Yes, it was unprecedented but we are living in unprecedented times.
Many weeks ago, I called for this kind of coordination. See my very first post in this blog - Open Letter to Legislators and Regulators (in any country) that was first posted on Facebook on September 19, 2008.
By acting, the governments sent the strongest signal of all - WE are talking, WE are not happy, WE are prepared to do something about this, and here is something. "WE" being the key operative word. Is it enough? No - everyone knows that. But it is a very significant start. So bring on the global coordination - careful, considered, constructive global coordination.
So let me be clear about what has made me so elated.
- We have inextricably interconnected global financial markets aided by the incredible power of technology, and extremely clever minds who have developed a web of complex instruments. Are they bad? I would say no, and I would add "not necessarily". Is there urgent need for regulatory overhaul.? Absolutely, without a doubt! Someone sneezes, not everybody catches only a cold - some develop bronchitis and pneumonia. So every country has a vested interest in a quick resolution to this crisis. The Governments have done more than indicate willingness to be coordinated; they have ACTED coordinated. The private sector has to step up to ensure we don't get overregulated restrictive markets that do not provide the kind of support to the real economy that is so urgently needed. There is a happy medium; this requires real cooperation - public and private sector - to find it.
- No matter how you feel about governments, they have power - real power to deal with a massive "virtual" problem with real consequences. They have power to amend laws and regulations, they have power to make new laws and regulations, they have power to enforce laws and regulations. Importantly, if you are worried about liquidity, they have the power to provide liquidity. And if you are worried about credit, they have the power to change interest rates and yes, if need be, force banks to behave differently. They have power to complete redo all the rules because governments have an obligation, frankly, to promote the welfare of their citizens and protect the lives of people. Simple equation: No people = no country. So, for all the free market capitalists, please hear me out. This is the reality: As important as markets are, if they are so dysfunctional that they do not serve the needs of the people and the economy, or worse destroy the sustainability of the populations and economies, and if it so determined that markets and market participants need reform, then governments have an obligation to reform them and reform them quickly. Global coordinated action can achieve this. However, let's not overregulate so while impoverished free markets (back to my earlier Bob Marley 101 post) are counter - productive, let's fix them - not chain them, but find ways - together with the coordinated governments - to take them out of poverty in an equitable and sustainable manner.
- Let's go back to my "lion is the king of the jungle" analogy. Make no mistake, the "jungle"" I described earlier exists. And the "lions" still rule. But here's the thing with Governments - they can either be tourists, environmentalists or hunters. Generally, they prefer to be tourists - that's the free market philosophy. Sometimes they have to be environmentalists - that is, intervening (you know, removing garbage, pollutants and overgrowth) so that species do not become extinct, or relocating species from overgrazed lands so they do not starve. Other times, they have to be hunters - that is, seeking out elements that cause severe ecosystem imbalances or pose real threats to mankind. Regardless of the role, they come to any jungle with lots of protective equipment because they are not about to be eaten by lions, mauled by bears, trampled by bulls or frankly, seriously impaired by any other animal. And once they have decided to act together, lets just say that the animal kingdom gets the message that the Governments are fully prepared to be environmentalists and hunters to keep the ecosystem stable, although as I said, they generally prefer to be tourists.
- And if I were to go back to my "Olympics of the Superpowers" analogy, can we really be in the Olympics with all this coordination? Absolutely! Even in the Olympics, as much as countries compete, they cooperate. They cooperate to set fair rules and policies. They cooperate to make the games clean from substance abuse so that natural talent can shine. Furthermore, athletes may compete for one country, but train in others, and often acknowledge the assistance they have been provided by other people and other nations. As far as I see it, it is in the countries' interest to cooperate so there are recurring Olympics. Evidently, they seem to see that too. So the message I got this morning was "We can get back to the competition later, but let's clean up the games first - even some of the events."
Finally, I want to see if we can place this in context to try to find a way to build back some trust and confidence, and in the process try to find a way to exercise some collective patience:
Previously, I have described what we have all been going through like a man-made hurricane, tornado, volcanic eruption, earthquake and tsunami all in one. Like every disaster, there is recovery. If you have ever experienced any of these, here's what you know for sure.
- You have to clean up.
- Clean up takes time.
- Clean up must be strategic. For example, clearing the road to the airport is priority so food and supplies can come in to those in need. For example, fixing electricity and water supplies first allows people and businesses to get on with their lives and productive activities
Is there going to be another disaster? Truthfully, who knows? But here's what I do know. Millions of people live through Hurricane Season every single year from June 1 to November 30. I am one of them. Almost half the year, you are bracing yourself for the worst while hoping for the best. What happens? Sometimes you get hit, sometimes you get hit badly, sometimes you get hit many times, and sometimes you just get spared.
So, what have those of us who live through Hurricane season year after year learned?
- On the bright side, most people learn to work together for the common good before the hurricane, during the hurricane, and cleaning up after. Yes, there are looters, but generally speaking, people are more kindly disposed towards each other.
- Since experience is the best teacher, you get really good at preparation and really good at cleaning up.
- No matter what, life moves on.