Thursday, April 17, 2008

Trillions lost ... and we are on the golf course!

Dear Colleagues

When speaking in Dubai a few days a go, Dr. Muhammad Yunus observed
"If I were to ask for a billion dollars for a good global cause, there would be a lot of uproar - but a trillion dollars down the drain, everyone off still playing golf, and not a word spoken."
This is a very thoughtful remark ... and very disturbing in many ways.

The people in the main who caused the financial meltdown are high level decision makers who are insulated financially from the working realities most of the world has to live with. The luxury industry is not much affected by the price of rice and the lack of consumer credit and tighter lending rules ... but almost everyone else is.

Sadly, some of the financial winners in the recent months are people who "bet" that the problem was bigger than anyone thought ... some hedge funds and one or two savvy investment banks. Another winner is the financial services industry that came up with a whole portfolio of predatory lending schemes and now is offering its services to service the foreclosure and refinancing market with equally predatory services.

It seems the law is not able to do very much until it is too late and everything is totally out of hand. Some lawyers are doing their best in a system that does not work very well, and they mitigate the damage ... but lawyers also wrote the laws that have failed society in a big way.

Society has failed to put ethics into business so that making money is balanced with some rules about doing damage to people and to society.

Tr-Ac-Net is developing an accountancy framework that assesses the impact of economic activities on the society as a whole ... Community Impact Accountancy ... that uses the concepts and principles of mainstream accountancy, but the added value to society is the key revenue and costs are the ALL the resources consumed. The ideas are simple, and its implementation not impossible because of the way modern technology allows data to be organized and analyzed in large volumes. More on this in due course.


Peter Burgess