Tuesday, October 14, 2008
"What we've got here is failure to communicate." The immortal line from the movie "Cool Hand Luke" is especially apt these days.
The systemic failures plaguing our banking and financial system are real and have caused genuine pain to millions of Americans. But the problems have likely been made worse by the public's reaction, or overreaction, to the systematic failure of our nation's political and financial leaders to communicate effectively with us since the crisis began.
At every step along the way, we have been told that the most recent government initiative taken to resolve the problem was sufficient and would be successful. And, within a matter of days or weeks, the claim was proven wrong. As a result, the banking crisis has morphed into a crisis of confidence in our leaders, our institutions and, in no small measure, in the free market system itself.
There are many rules to follow in the practice of crisis communications, but two are inviolate: when in crisis, communicate; and don't do anything to undermine your credibility. The people who run our government and financial institutions have violated both.
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