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America's Leadership Crisis–and Its Economic Implications

November 20, 2014 in Economics

By John A. Allison

John A. Allison

One of the underlying causes of the Great Recession and its abnormally slow recovery is a failure of leadership. We have a leadership crisis at the individual, organizational and societal level that has exacerbated our economic problems and handicapped the fundamental motivating principle at the heart of our country, the pursuit of happiness.

In my new book, “The Leadership Crisis and the Free Market Cure,” I lay out what it takes to be an effective leader. Leaders must live and communicate the fundamental values that are necessary for human flourishing. They must create the processes that incentivize superior performance and design a purposeful, rational mission to meet objective goals. This requires education, feedback and the honing of behaviors that produce excellent results.

During my almost 20-year tenure as CEO of BB&T, the company grew from $4.5 billion to $152 billion in assets. In our leadership development program, we educated employees by requiring them to read “Atlas Shrugged, Economics in One Lesson,” and other books on the principles that underlie a free society and free markets.

Individual, organizational, and societal success are all based on the same principles that are derived from the laws of nature and human beings’ fundamental nature.”

Drawing lessons from these principles was critical to the success of the company. For example, we decentralized the decision-making structure in a way that enabled BB&T to weather the financial crisis without a single quarterly loss. This was in stark contrast to the example of some other financial institutions that centralized and focused on ill-gotten short-term gains in a toxic regulatory environment plagued by excessive meddling by the government and the Federal Reserve.

Excessive government interference distorts the economy

The crux of America’s economic problems lies in this irrational system of excessive government interference that distorts the proper functioning of the economy. Most of the goals that are described by political leaders are based on an assumption that the country is one monolithic whole. In reality, a country is millions of individuals with wildly varying goals that are too complex for central planners to account for.

Unfortunately, the flawed fundamentals that led to the terrible financial crisis in 2008-2009 are still around and have been amplified since the crash. Recent presidential leadership has discouraged businesses and entrepreneurs to invest for the future. More regulations, higher taxes, government-chosen winners and losers — these are not the ingredients of a …read more

Source: OP-EDS

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