Chapter 9Why Is This Revolution Happening Now and Why So Fast?

Innovation is always inconvenient and it seems to come at the worst time. Innovation is spawned by crisis because when times are good, there is no incentive for change, improvement, or revolutionary thinking. When financial crises hit, for instance, there is always profound disruption. There are many reasons for this. First, people are thrown out of work as banks downsize. Some banks simply close and everyone is fired. Credit is hard to come by. Businesses become desperate and need funding. Governments become desperate to stay in power and will do anything to get another vote. Governments need growth to stay in power, and growth requires credit. So, political and economic forces rapidly coalesce to create new opportunities for the lifeblood of an economy: credit. Banks that are saddled with bad debt are offered a lifeline by governments, but many of them simply cannot come back to life quickly enough as the next cycle starts. They are the horse-drawn buggy that dies off when the car is invented. Examples here are erstwhile powerhouses like ING, RBS, ABN Amro, Fortis, Washington Mutual, Bear, Stearns, Lehman Brothers, and many others. They either are gone or are shadows of themselves.

Other, new powers need sponsorship and support from regulators who, after all, work for government. Furthermore, politicians always want to shake hands with the popular guy who has money for campaign funding. If banks are in the doldrums, ...

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