The 2008 Financial Crisis Has Left Many Industries Lacking Proper Management

With the 2008 financial crisis , trillions of dollars worth of dollars around the world was essentially destroyed. From pensions and retirement accounts to mortgages and debt, we saw losses all around us. It wasn’t some far away occurrence, but rather ones we could see in our streets, our towns and the businesses we worked for. Regular people felt the pain and while we are not in the deep recession we were in the immediate past, we are still feeling ripple effects, specifically in the corporate world.

Due to many savings accounts losing large amounts of value that were saved for retirement and those who pulled money out to save what they could, we have an average working population much older than the past decades. Many baby boomers who at one point had planned on retiring early, saw those dreams disappear with the falling stock prices. With baby boomers continuing to work and holding higher up positions and a lack of new hires, valuable knowledge on how to run and manage massive companies, is simply not being passed on. Now in 2017 we are finally seeing baby boomers being forced to retire and those who are taking over lack the experience.

Many of the lessons learned because of the financial crisis and management techniques created so we don’t repeat ourselves in the future, are lost on the current generation of managers. In addition because no one saw long term on training new talent, many of the people taking positions in management have never been in any sort of relevant role before. Management is tough, not something that can just be half-assed. If the managers don’t have their shit together, everything else suffers. In many ways they are the foundation that keeps people efficient and in order.

With a lack of good qualified managers at this point, companies are trying to do what they can to train the next generation, but I have doubts that it will even be enough. This is part of the reason why we continually make the same mistakes over and over again on Wall Street and in the world in general. People who were at the forefront of the past disasters don’t pass on the knowledge of how it happened and eventually something similar happens as a direct correlation. I talk about economist Hyman Minsky a lot because I truly believe that his idea is correct when he talked about what has been dubbed the “Minsky Moment”. This basically says that people slowly raise their risk tolerance levels until eventually we make a past mistake caused by over leveraging. Due to the management problems we are seeing, this might happen quicker than originally thought.

With the stock market hitting all time highs and people not paying attention, there is a large possibility that the lack of management knowledge could set in motion another large correction that will lead to dropping stock prices and layoffs. I hope this doesn’t happen, but people I talk to say there are a large amount of people that have no idea what they are doing. If times get tough and there is pressure on the management to make tough decisions, it is completely possible they will make the wrong ones.