Monday, October 6, 2008

Moral leadership

Watching (and experiencing) the upheaval in the financial world, I cannot but think that there will be more and more people in need of some healing philosophy in the coming weeks and months! At times like these, passions are high. Blame is attached. The people demand a reckoning. Here is a heartfelt and scathing attack on Wall Street managers from Bill Mann at my favourite financial site, The Motley Fool:

And we have folks in our midst who are capable of reading financial statements. Remember those big fat bonuses you got last year for turning toxic paper into AAA-rated inverse IO Strips which you dumped on some benighted bank somewhere (who really ought to have known better)? If your bonuses come within an order of magnitude of where they were last year, I'm pretty sure there will, in fact, be bloodthirsty mobs.

Read the full post here: Dear Wall Street

It is entirely normal to feel this way, it is human nature. And there must be change if we are to get out of this mess and avoid it in the future. But perhaps it is really ourselves we need to safeguard against. We need to safeguard against human nature. I realised this when I read an interview with Warren Buffet, the billionaire investor, the ‘Oracle of Omaha’:

In a subsequent interview with, Buffett said he wasn't interested in placing blame for the crisis.
"I don't worry too much about pointing fingers at the past," he said. "I operate on the theory that every saint has a past, every sinner has a future."
He said the problem boils down to widely held assumption during the housing boom that prices could only go up. And while the theory's flaws are all too apparent now, the misconception is understandable, said Buffett, pointing to previous asset bubbles going back centuries.
"There are not bad guys in that situation," said Buffett. "It's a condition of human nature."

I only recently paid much attention to the financial world and therefore only recently discovered Warren Buffet. But the more I read his interviews and his letters to shareholders, the more I am impressed with his moral leadership. This is all the more impressive considering his immense wealth and power. Perhaps he is the living proof that it pays to be a gentleman in the long run, he is a living ‘tree on the mountain’.

See also: Integrity – the lesson of the swamp plant and Moral hazard

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Discover The Tale of Genji, the 11th Century classic of Japan (click image)

Discover The Tale of Genji, the 11th Century classic of Japan (click image)
Kiyomizudera Temple has a large veranda looking out over Kyoto and beyond