GEOFF BEATTIE
KNIGHT BAGEHOT SPEECH
W. GEOFFREY BEATTIE, DEPUTY CHAIRMAN OF THOMSON
REUTERS/ PRESIDENT, THE WOODBRIDGE COMPANY
NOVEMBER 2, 2009
INTRO
GOOD EVENING EVERYONE AND THANK YOU FOR INVITING ME.
IT’S MY GREAT PLEASURE TO BE HERE WITH YOU TONIGHT. AND
IT’S MY HONOUR TO BE ASKED TO MAKE THESE REMARKS.
FIRST, I WANT TO CONGRATULATE ALL OF KNIGHT-BAGEHOT’S
FELLOWS AND ALL OF YOU WHO CONTRIBUTED TO THIS
EVENING’S DINNER AND TO THE COLUMBIA SCHOOL OF
JOURNALISM.
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WHEN TERRI INVITED ME TO SPEAK I WANT YOU TO KNOW THAT
I SUGGESTED SEVERAL OTHER PEOPLE WHO I THOUGHT WOULD
BE MORE INTERESTING AND HAVE MORE TO SAY TO THIS
AUDIENCE. HOWEVER, AS YOU CAN IMAGINE, SMART PEOPLE
KNEW HOW DIFFICULT IT WOULD BE TO GIVE SOME “NEWNESS”
TO A SPEECH IN THE MIDDLE OF A RECESSION AND POLITELY
DECLINED.
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SO, YOU HAVE ME. LET ME GIVE YOU A LITTLE OF MY
BACKGROUND, ESPECIALLY AS IT PERTAINS TO MEDIA.
THROUGH MY ASSOCIATION WITH THE THOMSON CORPORATION,
NOW THOMSON REUTERS, AND THE WOODBRIDGE COMPANY,
WHICH IS THE HOLDING COMPANY FOR THE THOMSON FAMILY
AND THE CONTROLLING SHAREHOLDER OF THOMSON REUTERS, I
HAVE BEEN ENGAGED WITH THE MEDIA SECTOR FOR OVER 20
YEARS.
THE FIRST BUSINESS OF THE WOODBRIDGE COMPANY DATING
BACK TO THE 1950S WAS NEWSPAPERS, WHICH CULMINATED IN
THE LATE 1980S WITH THOMSON NEWSPAPERS BECOMING THE
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LARGEST OWNER OF DAILY NEWSPAPERS IN CANADA, BRITAIN
AND THE UNITED STATES.
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WHILE MUCH OF THAT HAS CHANGED, TODAY THE THOMSONS,
THROUGH WOODBRIDGE, REMAIN THE LEADING SHAREHOLDERS
IN CTVGLOBEMEDIA, THE OWNER OF THE GLOBE AND MAIL, THE
NEWSPAPER OF RECORD FOR BUSINESS AND PUBLIC POLICY IN
CANADA, AND CTV, CANADA’S NUMBER ONE PRIVATE TV
BROADCASTER AND NUMBER ONE NEWS NETWORK.
WOODBRIDGE’S FLAGSHIP ASSET TODAY IS, HOWEVER,
THOMSON REUTERS, THE WORLD’S LEADING PROVIDER OF
INTELLIGENT INFORMATION TO PROFESSIONALS GLOBALLY,
WHICH AS YOU KNOW INCLUDES REUTERS’ HIGHLY RESPECTED
NEWS BRAND AND CONTENT. SO MY ENGAGEMENT WITH THE
NEWS MEDIA AND THE FUTURE OF JOURNALISM CONTINUES.
I HAVE GREAT REGARD FOR THE WORK OF JOURNALISTS AND I
KNOW THAT RESPONSIBLE, QUALITY JOURNALISM PLAYS A
CRITICAL ROLE IN ENABLING US TO SCRUTINIZE OUR SOCIETY,
OUR ECONOMY AND OUR PUBLIC INSTITUTIONS.
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AND WHAT A PARTICULAR CHALLENGE BUSINESS JOURNALISTS
HAVE HAD THIS LAST YEAR – A RINGSIDE SEAT FOR THE MOST
DEVASTATING FINANCIAL CRISIS IN 60 YEARS; THE FALL OF
GIANTS OF WALL STREET AND THE PAIN OF MILLIONS ACROSS
THE UNITED STATES AND AROUND THE WORLD WHO SAW THEIR
PERSONAL WEALTH DIMINISHED AND THEIR FINANCIAL
FUTURES THREATENED OR WORSE.
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BUT AS WE KNOW, THE ROLE OF JOURNALISTS IS TO DO MORE
THAN OBSERVE. IT’S TO FIND MEANING, ANALYZE, AND IDENTIFY
CAUSE AND EFFECT.
IN THAT WAY, THE ROLE OF JOURNALIST AND CEO ARE ALIKE.
WE ARE BOTH TRYING TO DISTIL CURRENT EVENTS, IDENTIFY
MACRO TRENDS, AND LOOK AHEAD TO FIND LONG TERM
IMPLICATIONS.
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[INTRODUCTION OF THEME]
SO TONIGHT, RATHER THAN FURTHER EXHAUST THE TOPIC OF
THE FUTURE NEWS AND MEDIA, I WANT TO SHARE WITH YOU MY
ANALYSIS OF THE UPHEAVAL OF THE LAST YEAR.
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AND MORE IMPORTANTLY I WANT TO SHARE A HOPE WITH YOU.
MY HOPE IS THAT THE REAL LEGACY OF THE FINANCIAL CRISIS
WILL NOT BE THE NEW REGULATIONS, A NEW RELATIONSHIP
BETWEEN THE PUBLIC AND PRIVATE SECTOR, OR NEW
GOVERNANCE PRINCIPLES.
MY HOPE IS THAT WE SEE THE EMERGENCE OF A NEW BUSINESS
PHILOSOPHY THAT HAS A FUNDAMENTAL AND
TRANSFORMATIONAL EFFECT.
JUST AS MANY BUSINESSES AROSE OUT OF THE CHALLENGE OF
THE GREAT DEPRESSION, I AM HOPING THAT THE FIRES OF THE
LAST YEAR FORGE A NEW KIND OF BUSINESSPERSON WITH A
NEW VISION.
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OR SHOULD I SAY, WITH A FRESH VERSION OF AN OLD VISION.
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CONSIDER THAT WE HAVE A GENERATION OF AMERICANS WHO
HAVE LIVED THEIR LIVES IN A PERIOD OF ECONOMIC
PROSPERITY, GROWTH, AND DIZZYING ACQUISITION OF WEALTH.
THEY FACE A DIFFERENT WORLD AHEAD.
CHANGE OF THE SORT WE HAVE BEEN EXPERIENCING LATELY IS
NO DOUBT DIFFICULT. IT KNOCKS PEOPLE OFF BALANCE; IT
CAUSES ORGANIZATIONS TO CONSIDER DRAMATIC SHIFTS IN
DIRECTION AND FOCUS. AND UNFORTUNATELY IT MAKES
OTHERS SEIZE UP.
CHANGE LIKE THIS CAN CREATE FEAR AND FEAR PARALYZES
GOOD THINKING.
BUT CHANGE CAN ALSO GALVANIZE NEW THINKING. NOW IS
WHEN WE MUST BREAK THE MODELS THAT DIDN’T WORK AND
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SEIZE THE OPPORTUNITY TO FIX THE ERRORS OF THE PAST
DECADE.
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I HAVE TO TELL YOU THAT I THINK THE COURSE CORRECTIONS
WE ARE SEEING AROUND US ARE HEALTHY AND LONG OVERDUE.
THEY ARE TOUGH MEDICINE FOR AN ILL PATIENT.
AS I SEE IT, THERE HAS BEEN OVER THE LAST DECADE AN
INSIDIOUS AND DANGEROUS SHIFT IN HOW WE ALL MANAGE OUR
LIVES AND, IN PARTICULAR, OUR FINANCIAL ASSETS – AS
INVESTORS AND BUSINESS MANAGERS.
WE HAVE SEEN COUNTRIES LIKE CANADA AND THE UNITED
STATES -- WITH THEIR LONG HISTORIES OF INNOVATION,
ENTREPRENEURSHIP AND BUSINESS-BUILDING -- TURN INTO
FINANCIAL PLAYGROUNDS FOR SPECULATORS, INTERESTED
ONLY IN PLAYING THE MARKETS FOR THE GREATEST PERSONAL
RETURN. WE HAVE BECOME IMPATIENT, WHICH IN SOME
CIRCUMSTANCES IS A MORE POLITE WAY OF SAYING GREEDY.
AND GREED ISN’T JUST A SIN; IT’S AN ECONOMIC MENACE.
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IN BUSINESS, IN INVESTING, AND IN OUR OWN LIVES, WE HAVE TO
BALANCE TWO PHILOSOPHIES – THAT OF CONSTANTLY LOOKING
FOR A BETTER TRADE AND THAT OF BEING A BUILDER.
WHAT WE HAVE EXPERIENCED IN THE LAST YEAR ARE THE
CONSEQUENCES OF AN UNBALANCED MARKET DOMINATED TOO
MUCH BY THE TRADING MINDSET. IT’S IS TYPICAL OF THE FINAL
STAGES OF AN ECONOMIC BUBBLE: PEOPLE BETTING ON THE
MARKET INDICATORS RATHER THAN INVESTING ON THE BASIS
OF THE UNDERLYING FUNDAMENTALS.
WE HAVE TOO LITTLE BUILDING TODAY AND THE IMPACT
EXTENDS BEYOND JUST THE DAILY MARKET RETURNS, TO
DEEPER, LONG-TERM, AND TROUBLING IMPLICATIONS FOR
BUSINESS AND SOCIETY.
WE HEAR A LOT THESE DAYS ABOUT “RESETTING THE AGENDA”
AND GETTING BACK TO FUNDAMENTALS. MY HOPE IS THAT WE
CAN FOSTER IN SOCIETY THE RECOGNITION OF THE GREAT
VALUE OF A BUILDING STRATEGY… AND BY DOING SO RESTORE
STABILITY, GROWTH AND ENERGY TO OUR ECONOMIES.
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SO WHO ARE THESE TWO – THE BUILDER AND THE TRADER?
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LET ME START WITH MY DEFINITION OF A TRADER. A TRADER
SEEKS THE BEST RETURN IN THE SHORTEST AMOUNT OF TIME
AND WILL TAKE ON SIGNIFICANT SHORT TERM RISK IN PURSUIT
OF THAT BIG REWARD. BY DEFINITION, TRADERS HAVE TO
FOCUS ON THEIR EXIT FROM AN INVESTMENT. ALL
CALCULATION IS ORIENTED TO DETERMINING THE HIGHEST
POINT OF GAIN RELATIVE TO INITIAL INPUT.
THOSE ONLY FOCUSED ON TRADING ARE NOT COMMITTED TO
THE STRATEGY OF THE BUSINESSES IN WHICH THEY INVEST BUT
ON HOW THAT ORGANIZATION’S ASSETS CAN BE BEST
LEVERAGED FOR GAIN IN THE SHORTEST PERIOD OF TIME. A
TRADER WILL ENGAGE IN SHAREHOLDER ACTIVISM TO COMPEL
COMPANIES TO TAKE QUICK – SOMETIMES SEVERE -- ACTION TO
CREATE SHORT-TERM RETURNS AND THEN SKIM OFF THAT
VALUE AND WALK AWAY.
THE PATTERN OF CONSTANT TRADING OF HOLDINGS HAS A LONG
TERM DETERIORATING EFFECT.
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DEDICATED TRADERS BECOME EXPOSED TO EVER-ESCALATING
LEVELS OF RISK. BECAUSE THERE SIMPLY ISN’T AN UNENDING
PIPELINE OF NEW, HIGH-QUALITY INVESTMENT OPPORTUNITIES,
TRADERS ARE FORCED TO TOLERATE HIGHER LEVELS OF RISK.
(THAT IS WHAT CREATES BUBBLES.) OR THEY BEGIN TO PLAN
INVESTMENTS BY CYCLES RATHER THAN UNDERLYING
FUNDAMENTALS.
ON THE OTHER HAND, A BUILDER INVESTS WITH THE INTENT OF
SEEING A BUSINESS EVOLVE OVER TIME. THEY’RE PROCEEDING
ON THE BASIS THAT AN INJECTION OF CAPITAL AND SUPPORT
CAN MOVE A COMPANY FORWARD TO NOT ONLY GREATER
RETURNS BUT GREATER CAPACITY FOR FUTURE GROWTH AND
STABILITY.
BUILDERS INVEST OVER THE LONG TERM AND INTEGRATE RISK
MANAGEMENT INTO THEIR STRATEGIES AS THEY MUST
INEVITABLY RIDE THE HIGHS AND LOWS OF THE ECONOMY. AND
THERE’S NO QUESTION THAT THE LAST 18 MONTHS HAVE PUT
THE BUILDERS TO THE TEST.
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BUT TRUE BUILDERS EXPECT TO HAVE TO NAVIGATE THROUGH
DOWNTURNS BY RELYING ON THE UNDERLYING FUNDAMENTALS
OF THEIR BUSINESSES, THEIR MARKETS, AND THEIR
MANAGEMENT.
BUILDERS UNDERSTAND AND ENGAGE IN THE ORGANIZATIONS IN
WHICH THEY INVEST AND THUS CONTRIBUTE TO THEIR SUCCESS.
I AM IN THE VERY FORTUNATE POSITION WITH THE
WOODBRIDGE COMPANY TO HAVE AN INVESTMENT MANDATE
FOR THE LONG TERM – IT’S MULTI-GENERATIONAL, IN FACT.
WE SEEK TO WORK WITH HONEST AND COMPETENT MANAGERS
AND IN RETURN CAN GIVE THEM LONG-TERM COMMITMENT AND
SUPPORT. AND WHEN WE INVEST, WE LOOK FOR BUILDERS --
PEOPLE WITH REAL BUSINESSES, COMPETITIVE ADVANTAGE,
SOLID MANAGEMENT AND LONG TERM PROSPECTS. THAT IS THE
VALUE WE ADD.
I DON’T MEAN TO SUGGEST THAT WE ARE SOMEHOW ABOVE THE
REST OF THE MARKET. WE TOO HAVE HAD TO MANAGE THE
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BALANCE BETWEEN BUILDING AND TRADING. BUT WE HAVE
SHAREHOLDERS THAT ARE NOT LOOKING ONLY FOR SHORT
TERM GAIN.
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I AM ALSO NOT SUGGESTING THAT ALL TRADING IS BAD AND ALL
BUILDING IS GOOD. IT IS ABOUT BALANCE. TRADING KEEPS
BUILDERS FROM BEING COMPLACENT.
CLEARLY THERE HAS ALWAYS BEEN A SPECULATIVE MENTALITY
PRESENT IN THE MARKETPLACE. WHAT HAS BEEN
PARTICULARLY TROUBLING, HOWEVER, IS THE RECENT
DOMINANCE OF THAT APPROACH PARTNERED WITH A SEEMING
BLINDNESS TO -- OR AVOIDANCE OF -- THE INHERENT RISKS AND
COMPLICATIONS.
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INVESTORS HAVE BEEN CHASING INAPPROPRIATE BENCHMARKS
AND LEVERAGING MASSIVELY TO GET THERE. TOO MANY SHORT
CUTS THAT UNDERMINE THE INTEGRITY OF THE WHOLE SYSTEM.
THE IMMEDIATE IMPACTS OF THE TRADER MENTALITY ARE
STARKLY CLEAR: BURSTING MARKET BUBBLES, COLLAPSING
HIGH RISK CREDIT STRATEGIES, AND UNDERINVESTMENT IN
RISK MANAGEMENT AND GROWTH. AND SUCH CORRECTIONS
ARE THE HARSH MEDICINE NECESSARY TO SHOCK SOME
MARKET PLAYERS.
BUT WE SHOULD ALSO BE CONCERNED WITH THE DEEPER
INFLUENCES OF THE TRADER STYLE.
WE ARE CREATING A GENERATION OF BUSINESSPEOPLE
ORIENTED TO SHORT-TERM GAIN, UNFAMILIAR WITH SACRIFICE,
INSUFFICIENTLY ORIENTED TO RISK MANAGEMENT, AND LOSING
TRACK OF THE REAL MEANING OF ‘INVESTMENT.’
SADLY WE HAVE A GENERATION OF YOUNG BUSINESS PEOPLE
WHO SOMETIMES MISTAKE LUCK OR TIMING FOR SKILL. IN
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RECENT YEARS, SOME INVESTORS WERE PERFORMING A HIGH-
WIRE ACT WITHOUT A NET BECAUSE THEY’D NEVER SEEN
ANYONE FALL. NOW THAT THE DOWNSIDE REALITIES HAVE
BEEN MADE CLEAR, HOPEFULLY PEOPLE WILL APPROACH
INVESTING WITH DIFFERENT STRATEGIES AND A MORE
REALISTIC OUTLOOK.
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THE TRADER MENTALITY HAS NOT BEEN LIMITED TO THE
INVESTMENT MARKETS. IT HAS INFILTRATED OUR SOCIETY ON
A BROADER BASIS.
WE HAVE CULTIVATED A CULTURE OF INSTANT GRATIFICATION
IN WHICH CONSUMERS RELY ON CREDIT RATHER THAN SAVINGS
TO PURCHASE AND GET HOOKED ON STRONG PERFORMING
INVESTMENT RETURNS: o I WILL GET A HOUSE NOW EVEN THOUGH I CAN’T AFFORD
THE MORTGAGE.
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o I WILL BUY THAT IPOD OR RACING BIKE TODAY WITH
CREDIT BECAUSE I JUST CAN’T WAIT. o I’LL TRY TO TIME THE MARKET AND MAKE A KILLING
BECAUSE I CAN’T SIT AROUND WAITING FOR LONG-TERM
RETURNS.
MUCH HAS BEEN MADE OF THE ROLE OF CONSUMER
CONSUMPTION AS AN ECONOMIC STIMULUS TOOL. THIS IS A
VERY DANGEROUS APPROACH. WE HAVE LET OUR ECONOMY
HINGE ON IRRATIONAL BEHAVIOUR BY CONSUMERS.
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IN MARCH, THOMAS FRIEDMAN SUMMED UP THE SITUATION
WELL WHEN HE WROTE: “WE ARE COMING OFF A 20-YEAR CREDIT
BINGE. AS A COUNTRY, TOO MANY OF US STOPPED MAKING MONEY
BY MAKING "STUFF" AND STARTED MAKING MONEY FROM MONEY -
CONSUMERS MAKING MONEY OUT OF RISING HOME PRICES AND
USING THE PROFITS TO BUY FLAT-SCREEN TVS FROM CHINA ON
THEIR CREDIT CARDS, AND BANKERS MAKING MONEY BY CREATING
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COMPLEX SECURITIES AND LEVERAGE SO MORE AND MORE
CONSUMERS COULD GET IN ON THE CREDIT GAME.”
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EXCESSIVE CONSUMER CONSUMPTION IS NOT AN ECONOMIC
STRATEGY, IT’S AN ADDICTION: YOU KNOW IT’S BAD FOR YOU,
YOU KNOW TROUBLE IS COMING, BUT YOU DO IT ANYWAY
BECAUSE IT FEELS GOOD.
IN THE WORDS OF MARK TWAIN “IT’S NOT THE THINGS THAT YOU
DON’T KNOW THAT GET YEAH … IT’S THE THINGS YOU DO KNOW
THAT AIN’T SO”.
AT THE RISK OF SOUNDING LIKE SOMEBODY’S GRANDFATHER,
WE’VE LOST THE CULTURE OF SACRIFICE. SACRIFICE IN ALL ITS
DIMENSIONS: o THE SACRIFICES OF MILLIONS OF IMMIGRANTS WHO
WANTED TO MAKE A BETTER LIFE FOR THEIR FAMILY;
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17 o THE DEFERRED ENJOYMENTS OF PARENTS TO ENSURE THEY
COULD AFFORD A COLLEGE EDUCATION FOR THEIR
CHILDREN; o o THE RESPONSIBILITY TO ACCUMULATE ENOUGH SAVINGS
TO TAKE CARE OF THEMSELVES.
NOT ONLY DID WE DEVALUE SACRIFICE BUT WE REWARDED
SHORT-TERM THINKING. IN BUSINESS, WE PRESSURED CEOS TO
RAISE EARNINGS EVERY QUARTER AND DISREGARD THE DEEP
STRUCTURAL CRACKS APPEARING IN THEIR BUSINESSES. AND
WE REWARDED THEIR BEHAVIOUR.
AS JUDITH SAMUELSON PUT IT: “THE ECONOMY DID NOT GET INTO
A MESS BECAUSE PEOPLE WERE PAID TOO MUCH. IT GOT INTO A
MESS BECAUSE THEY WERE PAID TO DO THE WRONG THINGS.”
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AND ONE OF THE MOST DAMAGING OUTCOMES IS THE RISK TO
INNOVATION -- R&D BUDGETS SLASHED; AND SOME OF THE
GREAT RESEARCH INSTITUTIONS UNDER-FUNDED.
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FOR MORE THAN A CENTURY, AMERICA WAS THE CRUCIBLE OF
INNOVATION FOR THE WORLD: IN CONSUMER PRODUCTS, IN
SYSTEMS, IN HEALTH AND MEDICAL RESEARCH, AND IN NEW
SUSTAINABLE TECHNOLOGIES. FROM THE MODEL T TO THE
IPHONE, THE UNITED STATES FOSTERED THE ENTREPRENEUR
AND THE VISIONARY.
INNOVATION ARISES EQUALLY FROM BOLD AMBITION AND
PATIENCE.
ONE OF THE BEST EXAMPLES WAS THE U.S. SPACE PROGRAM.
INSPIRED BY PRESIDENT KENNEDY’S AUDACIOUS MANDATE, THE
SPACE PROGRAM FOSTERED BENEFITS FELT FAR BEYOND NASA –
DEVELOPMENTS IN SUPERCOMPUTING, NANOTECHNOLOGY, AND
BIOTECHNOLOGY THAT HAVE TRANSFORMED OUR LIVES.
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THE SPACE PROGRAM WAS NOT ONLY RICH IN AMBITION BUT
BROAD IN SCOPE.
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LOOK AT ANOTHER GREAT LEGACY OF THE UNITED STATES: THE
GREAT PUBLIC EDUCATION SYSTEM BUILT AFTER WWII FROM
UNIVERSAL BASIC EDUCATION TO THE FOUNDING OF SOME OF
THE LEADING INSTITUTIONS OF HIGHER EDUCATION. AMERICA
HAS BEEN EDUCATOR TO THE GLOBE WITH WORLD LEADERS
COMING HERE TO COMPLETE THEIR POST-SECONDARY
EDUCATIONS.
BUT RECENT YEARS HAVE SEEN THE DECLINE OF THE AMERICAN
EDUCATION SYSTEM; WHAT PAUL KRUGMAN IN THE NEW YORK
TIMES A FEW WEEKS AGO CALLED “THE SLOW-MOTION
EROSION” WHICH HAS CASED THE UNITED STATES TO FALL
BEHIND OTHER ADVANCED COUNTRIES.
AND WHY HAS THIS HAPPENED? BECAUSE OF THE LOSS OF
VISION TO SEE THE ONGOING INVESTMENT IN EDUCATION AS
CRITICAL BUILDING MANDATE AND A LONG-TERM ECONOMIC
IMPERATIVE.
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THE AMERICAN SPACE PROGRAM TOOK A DECADE TO FLOURISH.
THE PUBLIC EDUCATION SYSTEM TOOK A CENTURY. THESE ARE
NOT TIMELINES THAT SHOULD PERTURB US.
IN FACT, THEY HAVE MADE ME AN ADVOCATE OF
INCREMENTALISM.
OUR EFFORTS IN RESTORING BUSINESS TO A RATIONAL FOOTING
NEED TO BE DONE ON A SIMILAR SCALE. AMBITIOUS, FAR-
REACHING, BUT THOROUGHLY AND CAREFULLY DONE.
LOOK AT ENERGY POLICY: WE DON’T NEED A FULLY OPERABLE
RENEWABLE ENERGY POLICY TO BE IN PLACE NEXT YEAR. BUT
WE NEED TO BUILD IT GRADUALLY SO THAT IT’S IN PLACE IN A
DECADE.
THE KEY AREA TODAY FOR POLICY REFORM IS, OF COURSE, OUR
GLOBAL FINANCIAL SYSTEM. THE G-20 HAVE REACHED A BROAD
AGREEMENT ON BASIC MEASURES TO STRENGTHEN BANKS AND
OTHER FINANCIAL INSTITUTIONS.
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WE ARE SOME WAY AWAY, HOWEVER, FROM CONCRETE
PROPOSALS. THE AIM IS FOR A COHESIVE AND COMPREHENSIVE
PACKAGE OF REFORMS.
I AM CAUTIOUSLY OPTIMISTIC THAT REFORMS DEVELOPED AND
IMPLEMENTED IN THIS WAY WILL BE A SUCCESS FOR
INCREMENTALISM.
AMONG OTHERS, MARK CARNEY, THE GOVERNOR OF THE BANK
OF CANADA (AND A FORMER INVESTMENT BANKER), IS ON THE
RIGHT TRACK. HE SAID IN A SPEECH LAST WEEK THAT HE SAW
AS THE G-20’S OBJECTIVE THAT “THE FINANCIAL SYSTEM MUST
TRANSITION FROM ITS SELF-APPOINTED ROLE AS THE APEX OF
ECONOMIC ACTIVITY TO ONCE AGAIN BE THE SERVANT OF THE
REAL ECONOMY”. I THINK HE UNDERSTANDS BUILDERS AND
TRADERS.
THE TRADER MENTALITY HAS ALSO PENETRATED THE REALMS
OF PUBLIC AND FOREIGN POLICY.
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THE GENERAL ANXIETY OF THE LAST YEAR WAS GENERATED
NOT JUST BY THE FINANCIAL CRISIS BUT BY THE FRIGHTENING
PROSPECT OF THE AMERICAN ECONOMY STUMBLING. AND OF
AMERICA’S PLACE IN THE WORLD FALTERING.
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YET I WOULD PROPOSE TO YOU THAT GENERALLY SPEAKING
THE MAJORITY OF THE WORLD IS MOST COMFORTABLE WHEN
THE UNITED STATES IS IN A LEADERSHIP POSITION.
I POINT TO THE RECENT AWARDING OF THE NOBEL PEACE PRIZE
TO PRESIDENT OBAMA AS A TELLING EXAMPLE. THE WORLD HAS
EMBRACED THE TONE PRESIDENT OBAMA HAS SET THAT IS
INCLUSIVE, HOLISTIC AND AMBITIOUS.
WE’VE EXPERIENCED TIMES OF EXTRAORDINARY UPHEAVAL
BEFORE WHEN CITIZENS FELT THE FOUNDATION OF THEIR
WORLDS CRUMBLING. THE BEST RESPONSES TO THOSE SHOCKS
INVOLVED A SETTING ASIDE OF SELFISH MOTIVATORS AND THE
RISE OF CO-OPERATIVE EFFORTS TO ADDRESS COMMON GLOBAL
INTERESTS.
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CONSIDER THE EXTRAORDINARY PERIOD AFTER WWII WHEN
NATIONS CAME TOGETHER TO BUILD INSTITUTIONS INTENDED
TO SERVE THE GREATER GLOBAL GOOD – THE EXTRAORDINARY
BRETTON WOODS MEETINGS THAT CREATED THE IMF AND THE
WORLD BANK; THE CREATION OF NATO AND THE UNITED
NATIONS.
WE ARE IN AN ERA WHICH REQUIRES SUCH FORWARD-THINKING
AND UNITY OF PURPOSE AGAIN. WE NEED TO BUILD THE GLOBAL
INSTITUTIONS OF A NEW CENTURY AND WE NEED TO BUILD
THEM SLOWLY AND STEADILY.
WE NEED TO REBUILD THE GLOBAL INSTITUTIONS. WE NEED TO
CHANGE OUR CRITERIA AND OUR EXPECTATIONS. WE NEED TO
RENEW OUR EMPHASIS ON INNOVATION AND REWARD GOOD
MANAGEMENT, NOT JUST GOOD RETURNS. WE NEED TO
EMBRACE INCREMENTAL CHANGE. WE NEED TO DO THE
IMPORTANT THINGS A LITTLE BIT BETTER.
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IN SHORT, WE NEED TO BUILD AGAIN. WE NEED AN ENTRY
STRATEGY FOR THE FUTURE, NOT AN EXIT STRATEGY FROM THE
PAST.
WHICH BRINGS ME BACK TO WHERE I STARTED -- THE ROLE OF
THE MEDIA.
WE CANNOT ABSOLVE THE MEDIA FROM THEIR ROLE IN FIRING
THE FLAMES OF SPECULATIVE INVESTOR BEHAVIOUR. WE ALL
KNOW THE OUTLETS, PROGRAMS AND INDIVIDUALS WHO FED
THE TRADER APPETITE FOR THE NEXT GREAT DEAL, THE FAST
TURNAROUND INVESTMENT.
HOW DO WE BREAK THAT CYCLE AND WEAN OUR VIEWERS AND
READERS? HOW DO WE GIVE EQUAL SPACE AND CELEBRATION
TO THE BUILDERS?
THAT IS THE CHALLENGE FOR THE PROFESSIONAL JOURNALIST
AND FOR THE MANAGEMENT OF OUR MAJOR MEDIA OUTLETS.
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IT’S TIME FOR THE RESTORATION OF THE BUILDER MENTALITY
ON ALL FRONTS.
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THANK YOU VERY MUCH.
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