The financial crisis: wir haben es allen gewust

With my apologizes to our German friends for adapting this somewhat unfortunate sentence. It was used by number of German people, after the second world war, when they were asked whether they knew about the holocaust.  And their answer was: wir haben es nicht gewust. We did not know it, we were not aware of it.

With the financial crisis, of course years later now, we get a remarkable turn of that sentence.  Economists, managers, management professors all seem to have seen the crisis coming. Everybody forgot to tell so, but they all saw it.  Yesterday I read an article in the Dutch newspaper De Volskrant, written by Hans Labohm, who said that everything is to blame for the crisis, but not our liberal capitalism. Of course, according to him, the banks have played an important role.  Of course rating agencies have, and the bonus system in general has invited managers in the financial sector to take too high risks.  Then we have short selling (gambling) and securitizing, but all that, it seems, has nothing to do with our liberal capitalist rules of the game (or has it ?).  According to Labohm, the real cause is the simple bankruptcy of two major American mortgage banks.

Yesterday, I took also part in a panel of French Business Schools, in fact, to inform potential new students.  One of the students asked whether any of us had changed their programs after the crisis.  And there, one of my colleagues gave the famous: we have seen this coming, I don't understand what the problem is. We have always given courses dealing with responsible management, it are only some managers that have misused them.  No we have not.  We have all preached a short term orientation, an almost exclusive focus on the shareholder value, a very reductionist managerial style of mananagement by objectives, supported by bonusses that were only reinforcing the optimisation of each and every individual's behavior.  We did not bother about any systemic approach of the company, and/or of management; we did not bother about the stakeholder.  Of course, if we would have done so, or at least have understood it, we could have seen coming it. But we did not.  Let us be humble and indeed, maybe, avoid reinventing capitalism, but rather come up with a somewhat more systemic view on markets, countries, companies, etc. We owe this to future generations. 

For ideas, go to the readings page of this blog (in the little window, upper right corner). 

Comments

[Emmanuelle M.]

It is always so much easier and comfortable to find consistency of what happened after it did. It is easier because we have been educated to think looking back instead of analyzing and looking ahead. And it is comfortable because it makes us feel like we know and are/have been able to take control.
It reminds me of this video which was inserted in one of the post in this blog about management dogma's: Steve Job's commencement speech at Stanford graduating ceremony in 2005. It looked so easy and comfortable for him to outline the consistency of all the erratic things that happened in his life. This is all what growing old is about, I guess.

[SImon]

Now to the German "we-know-it-better" habit:

The German phrase is:
"Wir haben es alle gewußt." The Germans interviewed after WW2 did say:
"Nein, wir haben es nicht gewußt."

[Daydayfoorm]

Zeki a fight with arson
In Yekaterinburg, paid tribute to Anna Politkovskaya
Heroin America


Status of Warren Buffetts estimated The Forbes magazine at $ 50 billion.Similar records:

Iran is ready to use suicide bombers
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November 14, 2007 age Yamal Duma deputies approved on first reading a plan law on the district budget for the year 2008 and for the planned period 2009 and 2010. Submitted a plan of the successor to the Governor, Head of the Department of Finance YaNAO Albina Svintsov. As if the correspondent REGIONS.RU in presvmeste Service Governors Yamalo-Nenets, the formation of the revenue base budget of the Autonomous Okrug, was carried out taking into account changes in tax and budget legislation. In determining the income of the district budget took into account the conditions of the Agreement regarding the relationship between the State chief of the Tyumen region, Khanty-Mansi and Jana Nenets autonomous district, which, to forecast, for the three age will reduce the revenues of the Autonomous Okrug budget to 40 billion rubles. The main taxpayers in the budget of the Autonomous Region in the medium term will remain subsidiaries Gazprom - 35.4%, Gazprom Neft - 7.2%, Rosneft - 10.2%. The share of payments to small-TEC will be 8,2%. The main revenue sources of the budget of the Autonomous Okrug - it: for tax profit organizations - 32.9% tax on personal income - 29.4% tax nhotya muschestvo organizations - 24,5%. Expected value of consolidated revenues for the Autonomous Region in 2008 determined the amount 63.4 billion rubles for 2009 - 65,9 billion rubles for 2010 - 70,5 billion rubles. According to the district budget forecast value of revenues in 2008 amount to 50.6 billion rubles, in 2009 - 52.0 billion rubles in 2010 - 55,6 billion rubles. On spending the main tasks of the administration of Yamal will be: the challenge of improving the efficiency of budget expenditure; the challenge of improving the quality of financial management in the public sector; the task of raising the level and quality of life in the autonomous region. Cost of consolidated budget of the Autonomous Okrug in 2008 identified a total 71.3 billion rubles in 2009 - 73.9 billion rubles in 2010 - 79.3 billion. a part of those expenses of the district budget in 2008 are planned in the amount of 57.9 billion rubles in 2009 - 59,4 billion rubles in 2010 - 63.8 billion rubles. On accordance with the Charter for the Yamal-Nenets in recent years the budget of the Autonomous Okrug is accepted only socially-oriented. to the regional chief is no doubt that as the most rational, most reliable and profitable investment project for Yamal are investing in people. The years indicate the sole allegiance to this principle, and that is therefore socially important expenditures of the budget is traditionally exceed 80%. On projecting the budget were taken into account and the costs associated with wage increases in the amount of 6,4 billion rubles. Speaking on the substance and mandatory spending priorities of the district budget, Albina Svintsov stopped for education. The amount of funds for duty, and the planning period is defined in the sum of 52.1 billion rubles. This property should provide action plans for large-scale construction of the educational system, adequate to modern social and economic challenges. on therefore Rapporteur noted as a priority national plan of education, as well as other national projects, for state chief district became a kind of Yamal priority. On the reporting and planning period to maintain financial aid to all areas of work with youth and adolescents. on Budget includes provision for funding of targeted regional programs, the Youth Yamal and Children of Yamal, actions are aimed to support young people as a separate socio-demographic group. only budgeted property for the organization of summer holidays for children will acquire in each fiscal year, organized recreational activities more than 27,000 children and adolescents. Nhotya spolnenie spending commitments in the sphere of culture, film and media from the budget of the Autonomous Okrug and in the next planning period rather spent more than 10.0 billion rubles. Cost to health for medium-term planning period would amount to more than 30 billion rubles. apart from the fact, through a system of compulsory medical insurance for the three age is sent to 8 billion rubles. in the main financial document provided for the obligation to invest and subsidize housing and communal services, transport, agriculture and Roads and communications. For the next three age range of housing is planned to send more than 32 billion rubles, including the costs of both the current, without cause and nature of the investment. in a matter of priority should be to solve the problem to bring within the scope of municipal complex private sector, increasing economic efficiency and optimize the performance of the enterprise. In the field of housing services bid is made for de-monopolization of the market for services and product of the competitive environment of professional managers and operational organizations, homeowners associations. Implementation for 2,010 of these measures will reduce costs budgets of all levels, to stabilize the financial situation of the municipal utilities, to improve the quality and comfort of the living conditions of the population. This will open up new promising possibilities in the implementation of priority national project Affordable and Comfortable Housing - to Russian citizens. At the district to implement program Real Estate in the budget for a three-year period provided the financial resources of $ 7 billion rubles, ie, increased in the calculation for each financial year, almost three times. The magnitude of budgetary subsidies, aimed for the resettlement of dilapidated housing stock, increased by four times. The concentration of budgetary funds for the verdict of this important social problem to be able to provide better living conditions in the course of three years, nearly three thousand Yamal families to continue the development of mortgage lending, increase affordability index in the acquisition of housing. Note, this is a rather indirect help create conditions for further improving the demographic situation in the district and improve fertility. Budget investments represented District Address investment program amounting to more than 16 billion rubles. as if the successor to the governor stressed, Head of the Department of Finance District, only 80% of state capital investments rather transferred to local budgets for co-financing in accordance with the requirements of the Budget Code. This I do prostimuliruem involvement in building a set of additional investments in the form of citizens, local budgets and outside investors, - said Albina Svintsov. The amount of funds the program, to Compared with 2007, increased more than threefold. Maintain the necessary transport infrastructure in terms of territorial specificity of the Autonomous Okrug is probably just about the condition of the organizations subsidize road, river and air transport, which carry freight for the major, socially significant areas. Funding for the operation of the industry, will retain the availability of transportation services for all County residents. To support agro-industrial complex is planned to send more than 3 billion rubles. The priority task, a sentence that fairly provide budget subsidies will be, first, the task of raising investment attractiveness of the industry, the formation of small farms and the involvement of private businesses in the Yamal agricultural industry. The development of processing base will attract the maximum for the production of knowledge lko major suppliers, but also the private sector herders. Creating an innovation system, plus the introduction of modern technology rather key to a successful and sustainable economic development of traditional forms of farming in the county. In recent years by state and head of the local authorities of the Autonomous Okrug pursuing a consistent policy aimed to improve the quality of life and the preservation of all the measures of social support yamaltsev. In the medium term will be retained compensation payments to public sector workers, pensioners, the disabled and those yamaltsam, once in traditional industries and who leads a nomadic life. the coming financial period will be performed 16 targeted regional programs for social support. President of Russia in 2008 declared the Year of the Family. In Yamal created a holistic way for a state family support, has taken the necessary steps to improve the social status of motherhood ottsovstvhotya, the revival of family values and traditions. The social support and advancement of the Yamal families and children in the draft budget provided for the property in the amount of 6 billion 569 thousand rubles. Total for measures of social support of citizens in the budget of Autonomous District provided 25 billion rubles. Help, in part or another, rather provided more than one hundred eighty thousand people in the region, ie, every third yamaltsu. Upcoming budget gap rather the final stage of municipal reform. Through the work done to improve the system of intergovernmental fiscal relations, in the autonomous region the transition to the distribution of financial assistance for the basis of formal methods. The volume of inter-budgetary transfers for the past few years has been steadily to increase. Specific authority municipal budgets in the amount of the consolidated budget increased from 40% in 2005 to 70% in 2010. From the funds financial support of settlements, municipal districts and urban districts, the property in the amount of 17.0 billion rubles will be provided in the form of grants for equalization fiscal capacity of municipalities. From the District Fund co-financing will be provided with subsidies for equity financing of local issues. The volume of the fund in 2008 was 8.0 billion rubles in 2009, 17.0 billion rubles in 2010 17.9 billion rubles. In order to provide subventions for the financial security of individual delegated governmental powers created by the district regional fund payments. only for the approximation of the budget by the way its service provision in 2008 quite accurately conveys all 10 state authority. Results from the regional budget rather provided 32 kinds of subventions nhotya spolnenie autonomous powers okrughotya Russian Federation. to individual value of stock compensation for the fiscal period will amount to 29.3 billion rubles. Budget deficit in 2008 was 7.9 billion rubles In 2009, 8.1 billion rubles in 2010, 8.8 billion rubles. on the part of the lack of regional budget in 2008 was 7.3 billion rubles in 2009, 7.4 billion rubles in 2010 year, 8.1 billion rubles, ie, within the permitted Budget Code of the Russian Federation.Similar records:

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