Bank Crises and Bankers' Renumeration Part 3

A few weeks ago I was on holiday in Genting Highlands, Malaysia. I came across this article by a westerner correspondent in their local newspaper, The New Straits Times. He was talking about the current global financial crisis, and drew parallels with the Asian Financial Crisis a decade ago.

I shall not go into details about the article, but rather, I want to bring to particular attention a term which the author used - the IBG mentality.

What is IBG? Well, it stands for "I'll Be Gone". The majority of the bankers and corporate managers have this I'll Be Gone mentality. This means that they are only interersted in short-term results; and they are willing to sacrifice the future of the companies they are in charge to achieve this. I think we have no lack of examples and I shall skip that part.

There are many reasons for the root causes of this IBG mentality. Indeed, just pick up any western magazines or listen to any western current affairs broadcasts, you will have no lack of explanations given by experts.

Well, I am no expert. But I have been following this financial saga, and interested enough to come up with my own views. I shall share them with readers here.

I have not heard any of the above (i.e. magazines, broadcasts, etc.) mention that the blame lies in a critical aspect of modernity - more specifically, in the separation between ownership and management. I believe the IBG mentality grew inherently out of the fact that ownership is separated from management. As the layers grew more numerous, and more complex, who is responsible for what becomes blurrer and blurrer, until in the end, a manager/management can commit acts so fraudulent as to defy societal conscience. An example was quoted in that article from The News Straits Times :"when someone in the USA who earns USD19,000 per annum can afford to buy and get a loan to finance a house worth USD750,000, you know something is terribly wrong!"

The reason why no one has yet to lay a blame on modernity, is of course political and... uh... come to think of it, i'm writing is blog using the products of modernity... shall i bit the hands that feed me?....

No of course not... lets be clear about this, I do not blame modernity for this state of affairs, per se. Nor do I blame the bankers or corporate managers... really! - when in Rome, do as the Romans do.

I write this article to highlight a flaw of modernity and capitalism - IBG - the "I'll Be Gone" mentality. I hope readers will think about this and ask themselves if they are inflicted with this disease.