We are all aware of the dramatic nosedive of the stock markets, which has eroded trillions of dollars from the value of US and foreign corporations, and is causing economic stress globally. A CNBC TV series suggests that a major cause for this situation, at least in this country, is American Greed. Others blame our government for loosening regulations and ignoring their role of oversight, as CEOs of now bankrupt Wall Street firms walked away with the hundreds of millions of dollars bankrolled by U.S. taxpayers. Listen to this excerpt from my lecture on quality improvement in September 2007 (4:09): Unjust Rewards: Compensation for Failure.
Is greed the only negative core value (of the five: lust, anger, greed, attachment/possessiveness, arrogance) that caused this crisis?
Can you discuss, with examples, how all five negative core values have played a role in creating this crisis?
Everyone is now accustomed to hearing that the financial crisis in the United States and in Britain was caused by American financial institutions lending money to unsafe borrowers for buying houses, thereby breaking with the long-established rule of lending only to those with a steady income and a good credit rating.
http://www.politicalaffairs.net/article/articleview/7196/
The cause for greed is desire. Desire of wanting things that may not a neccessity for a purposeful life.
If Greed is caused by a desire, then desire becomes a negative quantity. I agree that, but it’s left to the individual though. If there is a thought of wanting everything, then a desire is what caused it may be a wrong statement. But yes, I can’t agree more that desire of wanting things may not be a necessity for a purposeful life.
I absolutely believe that the “lack of integrity” has made a cyclical economic downtown much worse. This lack of integrity is seen in both the private sector and in the government that is suppose to regulate the private sector.
The links below show CEO payouts and the pay for semi-government agencies like Fan
nie Mae
http://abcnews.go.com/Business/Economy/story?id=5876413
http://blogs.bnet.com/secdocuments/?p=59
Interesting link on the payouts. I never imagined they would be making that much money. Looks like Richard Syron and Kerry K. Killinger got the shaft in 2007 compared to their compadres. Just a mere $4-5M.
I’m finding that I often have to keep my emotions in check when I hear of executives making millions of dollars a year. I try to step back and not automatically assume that they aren’t worthy. There are many top executives out there that are bringing home millions but are also worthy.
I find that Costco CEO Jim Sinegal is a worthy executive and something for other CEOs to aspire to.
http://abcnews.go.com/2020/business/story?id=1362779
Lust: Prime example would be Eliot Spitzer: http://www.time.com/time/nation/article/0,8599,1721095,00.html
Anger: All I can think of for this one is how people have been getting angry over the rising prices and job losses that retail sales have gone down along with industrial revenue because of their changing spending habits, causing the economy to get even worse making it a vicious circle of peril.
Greed: This audio excerpt is one worth listening to as well: http://www.npr.org/templates/player/mediaPlayer.html?action=1&t=1&islist=false&id=94930841&m=94941836
Possessiveness: “The financial crisis is a result of many bad decisions, but one of them hasn’t received enough attention: the 1998 bailout of the Long-Term Capital Management hedge fund.” “With the Long-Term Capital bailout as a precedent, creditors came to believe that their loans to unsound financial institutions would be made good by the Fed — as long as the collapse of those institutions would threaten the global credit system. Bolstered by this sense of security, bad loans mushroomed.” [ http://www.nytimes.com/2008/12/28/business/economy/28view.html ]
The stubborness that causes politicians to make bad decisions surrounds the attachment they have to their policies and finanical views. This goes along with the next negative core value as well.
Arrogance: “Even the word ‘arrogance’ comes from arrogate, which means to harvest more than you sell or take more into yourself than you have the right to take. I think that’s what happened here.” Greed, self-orientation and adrenaline hunger—these were the mental engines behind the financial play that is now dragging down economies worldwide. [ http://www.cbw.cz/en/%E2%80%98arrogant%E2%80%99-american-leadership-will-be-watered-down-by-the-financial-crisis-/9430.html ]
From listening to Dr.Chopra’s audio clip, it highlights the lack of honor on the part of American executives when it comes to backing up their decision making over the years that led to the fall of their company. Even though we do not expect or want them to commit suicide, the lack of committment and greed for money that is prevalent in this society itself is brought to the forefront
I am sure there will be post about the greed of some of the leaders of companies that lost money. But it goes beyound private companies.
The U S Postal Service is planning on scaling back delivery by one day a week and is losing approximately $3 Billion a year. BUT, the Postmaster General total compesation and retirement benefits is more than $800,000 in 2008. (this amount is higher than that of President Obama)
Justification for this salary is: “have to pay this package in order to get the people with the needed experience to take the job”
So, my thoughts, if the Govt wants to restrict payment to top executives in private companines that LOOSE money, why not do it for the U S Postal Service
http://www.washingtontimes.com/news/2009/feb/17/in-hard-times-postmaster-earned-800000-in-pay-perk/
This in an interesting link I found on this
http://www.moolanomy.com/866/what-caused-the-financial-crisis-of-2008/
I think we can sum up the cause of the current economic crisis everywhere in one word — GREED. Over the years, mortgage and money lenders were happy to lend money to people who couldn’t afford their mortgages or loans. But they did it anyway because there was nothing to lose. These lenders were able to charge higher interest rates and make more money on loans. If the borrowers default, they simply seized the house and put it back on the market. On top of that, they were able to pass the risk off to mortgage insurer or package these mortgages as mortgage-backed securities. Easy money!
I agree that the lenders had nothing to lose, they “sold” these mortgages and had their money, but also at fault are the borrowers who did not tell the truth about their income.