Word: system
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...idea: apologize. Studies show that when doctors tell patients they erred and are sorry, litigation is much less likely. (Such admissions of guilt are typically inadmissible in court.) Since launching a program in which doctors admit errors and offer payments out of court, the University of Michigan Health System has cut claims in half...
Three main lessons present themselves. First, the lightly regulated global financial system that has evolved over the past three decades is dangerously fragile. Second, the U.S. government is capable of keeping a financial panic from snowballing into a complete economic disaster. Third, the government has not yet shown itself to be capable of doing much of anything to make the financial system less collapse-prone in the future. (There's a link, by the way, between the government's failure in No. 3 and its success...
...that relied on Lehman for day-to-day financing found themselves unable to do business. Similar dislocations played out around the world, and financial institutions became paralyzed by fear and confusion. They simply didn't trust one another anymore and didn't want to lend to one another. The system couldn't handle the stress of a major failure...
...lesson No. 2. Early in the Great Depression, powerful voices at Treasury and the Fed argued that financial crisis was a necessary corrective. "Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate," Treasury Secretary Andrew Mellon advised President Herbert Hoover. "It will purge the rottenness out of the system." This time around, after Lehman went under, no one at Treasury or the Fed talked that way. Instead, policymakers in the U.S. and overseas agreed that the panic had to be stopped at any cost. And it was, through a bailout that placed trillions of taxpayer dollars at risk...
There's been a trade-off. By keeping the recession from turning into a depression, the bailouts kept millions of people from ruin. But this success may have made it impossible to fix what ailed the financial system in the first place, which could eventually bring ruin to even more millions. The future is uncertain, so there's a lot to be said for solving today's real problems rather than obsessing about tomorrow's hypothetical ones. The trouble is that they won't stay hypothetical forever...