Monday 29 September 2008

A couple of articles on the history of today's credit crunch along with some thoughts

As a small business owner that is basically in a sink-or-swim situation as any business owner is in, it is truly amazing to watch what is happening in the U.S. with the proposed bailouts and the repercussions the credit crunch situation they are supposed to address are having around the world.

Don't get me wrong, I am no economist nor historian.

I am "just" a business man.

The article: Congress Pushed Fannie, Freddie In Wrong Direction During 1990s.

Wow ...

When we mess up, we make it right with our clients. If we mess up with our peers, we make it right.

If we don't make things right, then who will want to do business with us or collaborate with us?

As a business man, I am responsible for my decisions as well as the decisions of my employees. It goes without saying that responsibility is part of the business game.

When we have grown our business to be so large that our business decisions can impact millions of people's lives, and in this case we could possibly go so far as to say billions of lives, where is the responsibility for those decisions?

When we have grown so large, do we insulate ourselves against the impact of our decisions? Is it to be expected that when shareholders get involved in a business that it needs to make money at all costs?

Another perspective on Fannie Mae from a New York Times article dated 1999: Fannie Mae Eases Credit To Aid Mortgage Lending.

As small business owners, we are particularly aware of the risks involved in over extending our business' cash flow. We are also particularly sensitive to taking risks that will seemingly have a great payoff but could sink us if things went awry.

The balancing act between risk and reward is a talent we as small business owners must master at the peril of our very livelihood. Once mastered, we tend to keep that balance ... and that responsibility near the front of our minds all the time.

If we don't, and things fail, we have no one to blame but ourselves.

Philip Elder
Microsoft Small Business Specialists

*All Mac on SBS posts are posted on our in-house iMac via the Safari Web browser.

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