Tuesday, September 30, 2008

Financial Bailout: The Wisdom of Crowds

there's no real evidence that one can become expert in something as broad as 'decision making' or 'policy' or 'strategy' . . . And much of what we've seen so far suggests that a large group of diverse individuals will come up with better and more robust forecasts and make more intelligent decisions than even the most skilled 'decision maker.'
James Surowiecki
The Wisdom of Crowds

Modern Marketing

The Modern Marketing paradigm and social media toolsets at our finger tips as citizens and employees of Clear!Blue provides us all with an opportunity to shape the debate currently occurring in the White House and others. With the election just over a month away, people are talking all over the Internet about the pros and cons of each candidate. While the following is my opinion, and yours may differ, last night, I was able to start a conversation through social media. Thanks to the Internet, I made my mark on the debate.

There is panic in the street. Rome is burning and I don't mean the sportscaster Jim Rome. Our financial markets are in disarray and are on the brink of a global catastrophe.

The funny thing about this crisis is that it is more of a crisis of confidence than the typical cash flow crisis that almost all of us have experienced sometime in our lives. Cash is not the problem here; there is plenty of that being hoarded here and there.

The crux of the problem is that institutions that typically freely make loans and take deposits from each other are reluctant ("terrified") to trade amongst themselves and this lack of confidence could bring the economy to its knees if confidence is not restored here in short order.

While lawmakers in Washington are busy trying to protect their fiefdoms and ensure their re-elections, the crisis of confidence is steadfastly eroding options and pushing our economy toward depression, not just the current recession. Washington's inaction and failure to come to a compromise on the financial bailout package yesterday represented a colossal failure of leadership that will be felt for generations to come if something is not done to restore confidence in short order.

The bottom line is that once confidence reaches the tipping point, the domino effect will take hold and there will be no going back.

Step Up

In Bill Abele's words, now is the time for our elected officials to "step up" and selflessly lead. The stock markets 700+ point decline yesterday was a vote by the crowd that the "decision makers" made a grave error yesterday. Unfortunately, the stock market does not have the power to propose legislation in the US Congress. Hopefully, the US Congress is listening and will consider the wisdom of the crowd's vote and craft a solution that helps to maintain and restore confidence.

Individual Solutions

I spent two hours last night creating a blog post detailing my thoughts and opinions on the current financial crisis entitled: Bailout Voted Down: Colossal Failure of Leadership. When I started writing the post, I did not know what I was going to do with it, but figured I could at least get my frustrations off my chest. By the end of the night, I sent the post to the following people 9in additon to posting it on facebook):

  • Office of the President
  • Senator Levin
  • Senator Stabenow
  • Congressman Knollenberg
  • Board of the Federal Reserve
  • Secretary of the Treasury
  • Governor Granholm
  • Mary Kramer at Crain's
  • Matt Roush at Great Lakes IT Report
  • Eric Morath at Detroit News
  • Free Press - Washington Bureau
  • Emailed Numerous Friends

How are you going to change the world today?

Make it a great Tuesday.


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