Truth and Reconciliation for the financial crisis?

We live in dangerous times. The economy continues to flirt with recession. Ordinary citizens, who were encouraged to take loans that they might have been able to pay off while the economy was booming, are being threatened and forced from the homes. Anger mounts. The perception that we have spent beyond our means, and must now tighten out belts, is leading to policies that are only making the situation worse. Government debt, even the ultimate safe haven that used to be US debt, is looking increasingly suspect. The sustainability of currencies (notably the euro, but one day perhaps the dollar?) is called into question. And we know from history where all this can lead.

So what happens at times like these? People look for scapegoats. The favourite scapegoats now are the banks. After all, these are the ones that are threatening ordinary families out of their homes. And these, in tandem with the rating agencies whose advice they so unthinkingly followed, can quite reasonably be held accountable for the crisis that is now taking the world closer and closer to the abyss. Anything that smells like a bail-out for banks, and their overpaid CEOs, is anathema to most people.

But there’s a catch. We really do need the banks. And they really can’t afford to let home-owners simply default on their mortgages with impunity, particularly at a time when governments are requiring them to recapitalise. So blaming the banks doesn’t really solve the problem. What’s to be done?

It’s a question I’ve been asking myself a lot recently, and this morning I had a new thought on the subject: what about learning from Desmond Tutu’s “Truth and Reconciliation” idea for dealing with the aftermath of apartheid? There, too, entirely understandable anger risked derailing attempts to draw a line and put the country on the road to political, economic, and above all spiritual recovery. It has hardly been an unmitigated success – crime rates remain appallingly high, and at times the government’s stance on AIDS has been even more repugnant than that of the Catholic Church – but under the circumstances it seems to have worked pretty well. There are other positive, if imperfect, examples of similar approaches being applied, such as in Northern Ireland.

So what about it? Is there merit in this idea? How could it be made to work in practice? Any thoughts?

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About Peter Wicks

International consultant. I bring clarity to complex and confusing situations and identify the most promising solutions.
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