{"id":2529,"date":"2008-10-15T09:18:06","date_gmt":"2008-10-15T14:18:06","guid":{"rendered":"http:\/\/1boringoldman.com\/?p=2529"},"modified":"2008-10-15T09:21:01","modified_gmt":"2008-10-15T14:21:01","slug":"how-why-matters","status":"publish","type":"post","link":"https:\/\/1boringoldman.com\/index.php\/2008\/10\/15\/how-why-matters\/","title":{"rendered":"How Why Matters…"},"content":{"rendered":"
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Why How Matters<\/strong><\/a><\/div>\n

I have a friend who regularly reminds me that if you jump off the top of an 80-story building, for 79 stories you can actually think you’re flying. It’s the sudden stop at the end that always gets you.<\/p>\n

When I think of the financial-services boom, bubble and bust that America has just gone through, I often think about that image. We thought we were flying. Well, we just met the sudden stop at the end. The laws of gravity, it turns out, still apply…<\/p>\n

“In a connected world,” Seidman said to me, “countries, governments and companies also have character, and their character — how<\/strong><\/em> they do what they do, how<\/strong><\/em> they keep promises, how<\/strong><\/em> they make decisions, how<\/strong><\/em> things really happen inside, how they<\/strong><\/em> connect and collaborate, how<\/strong><\/em> they engender trust, how<\/strong><\/em> they relate to their customers, to the environment and to the communities in which they operate — is now their fate.” <\/p>\n

We got away from these hows<\/strong><\/em>. We became more connected than ever in recent years, but the connections were actually very loose. That is, we went away from a world in which, if you wanted a mortgage to buy a home, you needed to show real income and a credit record into a world where a banker could sell you a mortgage and make gobs of money upfront and then offload your mortgage to a bundler who put a whole bunch together, chopped them into bonds and sold some to banks as far afield as Iceland<\/strong>…<\/p>\n

Charles Mackay wrote a classic history of financial crises called “Extraordinary Popular Delusions and the Madness of Crowds,” first published in London in 1841. “Money … has often been a cause of the delusion of multitudes. Sober nations have all at once become desperate gamblers, and risked almost their existence upon the turn of a piece of paper. To trace the history of the most prominent of these delusions is the object of the present pages. Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one.”<\/p>\n

And so it must be with us. We need to get back to collaborating the old-fashioned way. That is, people making decisions based on business judgment, experience, prudence, clarity of communications and thinking about how<\/strong><\/em> — not just how much<\/strong><\/em>.<\/div>\n<\/blockquote>\n
Tom Friedman<\/strong>‘s op-ed is pushing business with integrity. Fair enough, but he might also want to focus on How Why Matters<\/strong><\/font> too. So why did "the banker sell the mortgage to a bundler who put a whole bunch together, chopped them into bonds and sold some to banks as far afield as Iceland." Why matters because the Mortgage has a large potential value, but you have to wait. By selling it for a value less than its ultimate potential yield, the banker has money in his pocket now. And so on up the line. So, the banker making the loan cares less and less about whether the borrower will ever pay it back, and loans more and more. And so on up the chain. It’s the Why<\/strong><\/font> that mattered, not the How<\/strong><\/font>. <\/div>\n","protected":false},"excerpt":{"rendered":"

Why How Matters I have a friend who regularly reminds me that if you jump off the top of an 80-story building, for 79 stories you can actually think you’re flying. It’s the sudden stop at the end that always gets you. When I think of the financial-services boom, bubble and bust that America has […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_bbp_topic_count":0,"_bbp_reply_count":0,"_bbp_total_topic_count":0,"_bbp_total_reply_count":0,"_bbp_voice_count":0,"_bbp_anonymous_reply_count":0,"_bbp_forum_subforum_count":0,"footnotes":""},"categories":[2],"tags":[],"class_list":["post-2529","post","type-post","status-publish","format-standard","hentry","category-politics"],"_links":{"self":[{"href":"https:\/\/1boringoldman.com\/index.php\/wp-json\/wp\/v2\/posts\/2529","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/1boringoldman.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/1boringoldman.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/1boringoldman.com\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/1boringoldman.com\/index.php\/wp-json\/wp\/v2\/comments?post=2529"}],"version-history":[{"count":0,"href":"https:\/\/1boringoldman.com\/index.php\/wp-json\/wp\/v2\/posts\/2529\/revisions"}],"wp:attachment":[{"href":"https:\/\/1boringoldman.com\/index.php\/wp-json\/wp\/v2\/media?parent=2529"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/1boringoldman.com\/index.php\/wp-json\/wp\/v2\/categories?post=2529"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/1boringoldman.com\/index.php\/wp-json\/wp\/v2\/tags?post=2529"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}