In 1942, FDR gave a speech remembered for its peroration: “Look to Norway!” Today, as the United States tries to right our economic wreckage, we might well heed that counsel again.
Check out this piece from NPR this morning, which describes how Norway has not only survived but thrived during the current recession. To be sure, massive oil and gas reserves are a critical part of the Norwegian formula for success (kind of like the old joke, the best way to become a millionaire in Hollywood is to start as a billionaire in Hollywood).
But, as Eric Westervelt argues,
it wasn’t just oil and gas revenue that saved Norway. The nation severely tightened banking oversight after a banking crisis in the early ’90s. Since then, Norwegian banks have loaned more prudently. There was no housing bubble here. And during the frenzy of the last decade, the banks largely stayed away from exotic investments and financial products — what Utne calls the ruin of some U.S. and European banks.
“They got all the bright guys to make all kinds of fantastic products. Very creative. And it turned out it was maybe not the best solution in the end,” he says. “I think Norwegian banks are not as creative.”
He adds, “In this situation, it may be good to be somewhat boring.”
I’d submit there may be another factor weighing in, one that’s innovative, not boring: Norway is a global leader when it comes to gender equality. They even have a law on the books requiring 40 percent female representation on the boards of public limited companies.
Why might this have had an impact on their ability to withstand the current crisis? Studies show that male and female fund managers tend to behave differently, with women managers tending to take fewer extreme risks. And while, to be sure, if you don’t take extreme risks, you’re less likely to reap extreme rewards, the flip side is true as well. As Nicholas Kristof and others have argued, Wall Street might have avoided its crash if Lehman Brothers had had more sisters at the top.
Today’s enlightened leaders and organizations understand that promoting diversity — gender and otherwise — isn’t just about being nice or being fair; it’s about getting better results. As Ernst & Young explains in their terrific Groundbreakers report, released at Davos earlier this year, “Academic research has established that diverse groups of people tend to outperform homogeneous groups if both groups’ members have equal abilities.”
And to tie this all in to current events here in DC, I hope we’ll see this reality reflected when Sonia Sotomayor joins the U.S. Supreme Court: Not that she will be inherently wiser than any of her colleagues on the bench, but that together, this increasingly diverse group of Americans will make the best possible judgments for our country.
