My uncle Gino's advice

When I look at my face in the mirror while shaving my beard, I always think of my uncle Gino from Toronto, who used to give investment advice (he had his own investment letter for many years). One morning, the only morning I stayed at his home near Toronto, he told me that I did not need to hurry when shaving, as this would not finish the job more quickly. "Just do it quietly," he suggested.

This morning I had to think of my uncle Gino's advice when I was hurrying back to my computer to finish a post I've wanted to write for a long time, about visions of the future of finance in the global system. Why should I be in a hurry, I said to myself, if it won't speed the writing of a good piece?

The picture shows my uncle Gino in his youth, in the Netherlands. He died a couple of years ago, in Canada, the country that had become his new home when he emigrated in the late 1940s or early 1950s. I know him as one of my many uncles and aunts in Canada (my brother also lives in Canada). Gino was a successful investment adviser until he lost his money, not because of an international credit or debt crisis but because of something else.

PS: I see that the original date of drafting the first two paragraphs of this post appears as the date of this post. However, today it's 25 November 2008 and not 13 October 2008, so "normally" I would have felt that I should hurry to finally finish that post on visions of the future. But, listening to my uncle Gino's advice and seeing the speed of information and the speed of financial transactions as one of the problems of global finance and development, I know that slow writing (and slow financial transactions) may make a better contribution to world stability than all this frenzy chasing after financial news and financial opportunities.

Es esa locura de "breaking news" y "today's financial opportunities" (Act now!) en que vivimos que es una de las causas de la crisis... It is this madness of "breaking news" and "today's financial opportunities" in which we are living that is one of the origins of the crisis...

Solving the credit crisis: we need a visionary view

To understand the functioning of the global financial system, prevent its crises and propose a better system, is a tremendously challenging job. No economist alone or group of economists would be able to do that job. In order to do it properly, one needs an overview and comprehensiveness of knowledge (including that of the other social disciplines) that economists alone cannot possess. Thinkers from other disciplines are needed as well.

Most officials working at ministries of finance and central banks see it differently. They still think they can do the job. However, we do not only need technical expertise but also a broad and in-depth view that takes into account how the system works for all citizens, rich and poor.

OK, I agree, the most urgent job for officials is now to manage the crisis as good as they can, and make steps towards a better regulation of financial markets. But even accepting the adagio that “only small steps are possible”, we still need a broad, visionary view of the system.

Can we create such visionary view? How?

The last laugh

In the media and the bakery shop around the corner, I hear more and more people say that the global financial system is ludicrous. Yesterday, in my daily newspaper NRC Handelsblad Dutch writer Willem van Toorn said, "It is amusing for the outsider that the army of economists, who always have said to us with serious scientific economic faces that we should not stop growing, now do not seem to have any scientific text available and instead speak with deep concern about 'the emotion of the market'."

Willem van Toorn's concern (and amusement) with economists was shared the day before in the same NRC Handelsblad in a column by Jan Sampiemon, a former Chief Editor for Foreign Affairs and former Deputy Chief Editor of NRC Handelsblad. He said:

"European politics followed until the beginning of this week European business, which was captured by the new US managerial capitalism. … Among other things, you recognise an ideology by the commonness of opinion among nearly all those who are dealing with the issue as economist, politician, CEO or journalist. Relevant questions were not raised. 'Fundamentals' could not be debated and scientists who raised critical questions were turned to the corner where they could puzzle over their stalled career."

I circulated these two quotes among a number of economists of my FONDAD Network (the group is larger than the link indicates) and in response one of them sent me a nice video clip. I think it will make you either smile, burst out in laughter, or laugh like "een boer met kiespijn" (a farmer with toothache), as the Dutch expression goes. According to my dictionary the English would say, "laugh on the wrong side of your face (mouth)".

The Last Laugh - George Parr - Subprime - subtitulos
Cargado por erioluk