The Worst Decade

Time magazine is calling the 00’s, the Decade From Hell.  At least from an American point of view (admitting that things in China, India or Brazil have been very different in the past 10 years).

Here is a partial list of the problems:

  1. Y2K – one of the highlights actually
  2. 2000 Presidential Election
  3. Tech Bubble bursting
  4. 9/11 WTC
  5. Hurricane Katrina
  6. War in Afghanistan
  7. War in Iraq
  8. Enron & Worldcom & Madoff
  9. 2004 Tsunami
  10. Housing Bubble bursting
  11. Banking Crisis

Time reminds us of Ronald Regan’s famous question “Are you better off than 10 years ago?”

This is also the decade that saw the emergence of Risk Management as a serious discipline.  We should ask ourselves “Was Risk Management a response to these crisis or was it a contributor?”

John Adams calls it the Risk Thermometer effect.  Just like our body seeks to keep the same internal temperature no matter what the temperature outside, our risk thermometer seeks to keep the same level of risk.  That means that when we add risk management for additional safety, we automatically add more risk to bring things back to the same level of risk.

The other claim is that risk management failed.  At the very least, it was heavily over sold.

And finally, there is the argument made by the Senior Supervisors Group that risk management was actually under-bought, that few firms were actually doing risk management in the last decade.

So we have a month left in the decade.  Most were touched by the adverse events of the past decade in some way.  Risk Managers should be able to offer something for the future that is better than the 00’s.

Explore posts in the same categories: Enterprise Risk Management, ERM, Financial Crisis, Risk, Risk Management


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One Comment on “The Worst Decade”

  1. riskczar Says:

    Arguably, many of the problems on the list are second order problems caused by the outcome of the 2000 Presidential Election, i.e., 9/11, Iraq, Afghanistan, Enron.

    While it would be unfair to blame the natural disasters on W., I bet Al Gore would disagree.

    Trevor Levine

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