Dear Leaders, Can We Trust You to be The Doctors?

TCE, shares conversion, bad debt bank, TARP, direct liquidity injection…. we see the new way regulators are trying to fix the financial markets but ensuring the health of major players. As of now, the whole game is a delicate balance between the need to intervene and prevent chaos while not stepping too deep into private territory. Governments around the world are trying and proposing various alternatives and observing the reaction of the markets. So far the feedback is taken in a passive way, similar to this scenario:

Government: Let me do this...
Market: No, no, no!!
Government: Ok, let's go back…

Instead, the government should have business leaders more involved in a dialogue like this:

Government: So what are the best solutions for you guys?
Market: This, this and this.
Government: Ok, let's work on this.

The problem in implementing the 2nd scenario is the eroded confidence in business leaders - CEOs and top executives of large firms as well as top academicians and regulators. Everybody at the top failed and is responsible more or less for this mess, starting with Greenspan and ending with new Treasury Secretary Timothy F. Geithner who was New York Fed Chairman. Can the same people come up with new ideas?

With leaders at all levels being exposed as lacking the diligence and wisdom at the best, and as crooks as the worst, it's hard to know who is in the position to devise a working solution. Scandals of the magnitude of the Great Depression seem to break out almost every week: Stanford, Blagojevich and Madoff (who not only lost billions of investors’ money that will reverberate throughout the global economy for years, but also caused outright suicides) are the villains of the late, of course. But even the Treasury Secretary got under fire over his questionable handling of tax obligations, and Merrill Lynch former boss John Thain caused public outrage with gross spending of government-supplied cash in the midst of financial meltdown. Even such venerable figures as Allan Greenspan, George Soros, Lloyd Blankfield and other executives of top financial institutions and hedge funds were questioned by Congress over their role in the global financial crisis.

We are in the toughest of times, but our biggest problem is not even the loss of capital but the loss of confidence and trust.