The financial upheaval of the past few years exposed faults in private and public sector institutions alike. The meltdown in the mortgage market, the collapse or near-collapse of important financial institutions, and the subsequent damage to public and private portfolios hit both Wall Street and the Blue government establishment. As we have noted at Via Meadia, in times like these, there is a strong and understandable urge to try to fall back on what has worked in the past. That might not always be the best way forward, though.It seems that the leaders of some of those old institutions are coming to that realization, based on this report from the WSJ on former Morgan Stanley CEO John Mack’s busy post-retirement. Mr. Mack, who shepherded the bank through the darkest days of the financial crisis, has joined the boards of several young business ventures, including one that uses the web to match lenders directly to borrowers and another that gives people without bank accounts access to pre-paid debit cards. By eliminating traditional banks as intermediaries, these ventures have the potential to upend the old financial system’s way of doing things. As Mack told the WSJ:
“What I really enjoy, clearly, is the technology of it,” Mack said. “I told my wife, ‘These young entrepreneurs think differently than the way I grew up.’”
The jury might still be out on whether these new businesses accomplish their objective of making it cheaper and easier for people to borrow and save, but Mack has one thing right: we need to be paying attention to and encouraging people who are willing to think differently about the future. The leaders of the old system got some things wrong, but they also have a lot that they can teach the next generation.He understands something else: we have not yet fully captured the potential of the information revolution. The software lags the hardware, and the vision of how the new technology can change our institutions and improve our lives lags behind software development. The next generation have grown up with technology; the best and the brightest of this generation will be able to imagine new uses for technology — new killer apps that will change the way we all live. Reaching out to the entrepreneurs and the visionaries of the rising generation, and giving them the benefits of experience and connecting them with capital is an enormous service to the world.Via Meadia applauds Mr. Mack’s open-mindedness, and hopes more of our country’s leaders will follow his lead.