As I pondered on the future, I am reminded of the book that became a bestseller years ago: Who Moved My Cheese? It was a book written about change. How apt it is in this season of change we are going through – changes in our spending habits, changes in our investment options, changes in the core of our financial systems. The economy that was built upon credit is shaken to the core, forcing us to rethink the fundamentals. Americans and many others have been bought with a lie that we can spend on what we want and borrow into our future. That poisonous belief has piled a $10 trillion debt onto America’s backyard. Our proud capitalistic view is crumbling to the age-old foe of socialism. China who has been condemned for its closed-door economic policy to foreign investment has breathed a sigh of relief.
But eventually, it is not a matter of capitalism or socialism. It is a matter of integrity. The new economic order will have to be built upon trust. Accounting standards will have to revamped to reflect the true value of investment. Complicated financial derivatives will have to be debundled to manager risk a better way. On the extreme side, it is very easy to enact more stringent regulation on the financial industry. However, greater inhibition without wisdom will only suppress further growth and curtail the speed of recovery from the current financial crisis.