[Welcome Crooks & Liars readers! -- lambert]

Rosabeth Moss Kanter is a management guru who holds the Ernest L. "Fatty" Arbuckle Professorship over in Allston, MA, at the school where George W. Bush got his Masters. And even she's worried. With Rakesh Khurana, she writes today in Bloomberg:

Polls show that confidence in business executives is at an all-time low in the U.S., and not only because of failures in financial and auto companies. Retirees whose pensions have plummeted and homes have been foreclosed are probably too tired* to protest, but the undercurrent of anger and blame is everywhere.

Where laws have been broken, individuals should be prosecuted. Where regulation has been lax, it should be fixed. But punishment and rule-making will not be enough by themselves, and a thrust toward excessive regulation could prolong the recession. If that is all we do, we could face years of rancor without recovery.

To turn around the economy, confidence in American business must be restored. Even rational economist [Oh?] Larry Summers has acknowledged the role that psychology plays in driving economic decisions. ...

President Obama is said to be taking presidential lessons from Franklin Delano Roosevelt. We urge him to also take lessons from Nelson Mandela. We propose that President Obama appoint a Financial Truth and Reconciliation Commission (TRC) around the economy. ...

The TRC provided both victims and perpetrators a forum where emotions could be freely expressed while facts were put on the table and people were educated about how past actions looked from other people's perspectives. An atmosphere of openness encouraged participants to reveal all details, no matter how gruesome, that would have been denied or obfuscated in a trial-like environment. More than 21,000 people delivered testimonies, either in person or in writing. After two and a half years of hearings across the country, a 3,500-page report was released in late 1998. Though the commission had critics from all sides, Mandela supported the TRC work, calling this a healing process that helped the country to concentrate on the future.

The analogy to the American economic crisis is far from perfect, and we do not mean to suggest moral equivalence between apartheid and economic collapse [Interesting denial. Why not? Because because racism is morally culpable, but class warfare isn't?]. ... An Obama commission headed by well-respected leaders [For example?] could holding grass-roots hearings throughout America in collaboration with state and local officials [Good!]. This could be a better use of Paul Volcker's time than the Economic Recovery Board Obama asked him to head in early February that has yet to meet. [Ouch!]

A financial T&R commission could conduct town hall meetings about what went wrong, who has suffered in the process, and what should change. In each community, people who testify could also take a positive step toward reconciliation — e.g., to voluntarily contribute to a community banking fund to invest in families facing foreclosures or small businesses with growth potential.

At the same time, those who feel unfairly attacked for receiving bonuses or simply being in the wrong role in banking at the wrong time could tell their stories. Leaders caught up in financial failures could admit mistakes (as many do in private) while discussing their views about a new moral code. Responsible business leaders of exemplary companies could showcase their best practices and be publicly applauded. We could find out what is right with American business, not just what went wrong.

Financial T&R dialogues could educate the public about why flaws in the financial system were not addressed. Scandals such as Enron, WorldCom, options backdating, and excessive executive compensation made clear that something had gone awry. The perils of sub-prime mortgage lending and the real estate bubble were discussed well before the crash. The commission could ask what prevented the nation from acting on early warnings.

Telling the truth and taking responsibility are the first steps in clearing the air and building support for change. Saying that we need more confidence does nothing unless we establish mechanisms and processes that can engage a large portion of the population in the search for truth and a basis for trust.

No kidding. Funny thing we need a TRC for both torture and finance. But then, we've been calling attention to the banksters strategic behavior for some time. Shocked, shocked.

NOTE * That's not it. This is still a rich country by world standards. They still have something to lose.