From the September 25, 2008 Medlaw E-Bulletin Special Report

You may be one of the high percentage of risk managers on my E-Bulletin list, if so, this E-Bulletin is meant for you, but if not, you may still find it interesting – disturbing, but interesting.  In the next few days, I will be splitting several aspects of my writings, such as this topic, into separate blogs and lists, so that you receive only those elements that you wish to receive.  I believe today’s edition, however, needs to go out promptly.

As risk managers, you are expected to maintain situational awareness, plan for contingencies, reduce the risks of disruptions to operations, and be prepared to deal with them should they occur. This does not mean that you WANT chaos, or even EXPECT it.  It means only that you remain aware to prevent harm from coming to your community, your institution, your employees, your friends, and your family.

Please consider this a situational awareness note:

Recommendation:   Review and update your contingency plans for civil disturbances and interruption of supplies.

Background:    A “perfect storm” situation is developing that has the potential to result in significant threats to our entire country.  You are undoubtedly aware of the current economic crisis on Wall Street and in the Finance sector that is occupying all of the news media and actually upstaging in some respects the rather close national election campaign.   The threat of Depression level disruptions is being openly discussed.  Unlike the Great Depression, however, a US stock market crash in a global economy could result in  unprecedented disruptions, a serious shift in world economic control,  and potential national security threats [internal and external]. 

The current economic “bail-out” proposal walks a precarious line between solution and greater failure, which can only [be] guessed at.  It borders between economic rescue and government take over of private business at a level found only in socialist, communist, or fascist countries. People are frightened and people are angry.

The political system currently enjoys an extremely low public confidence and support, and the current crisis has resulted in open anger from citizens of all political affiliations.  We have open anger over gas prices, immigration issues, jobs, and the racial overtones of the
current election. Concern about corruption is common at every level of politics.   Some elements in the country look to capitalize on this anger for their own gain.

Having lived through the events of the 60's, the anti-war riots, the Watts riots, the riots when Dr. King was assassinated, I had hoped to never see that kind of anger again in this country.  The wide-spread anger and deep-seated emotion driving today’s anger could easily be pushed over the edge by events to exceed those levels and to threaten our society as we know it. 

Please understand – I am not predicting disaster.  It is entirely possible that the US can and will respond effectively, if not perfectly, and the resilience of the economy and the American spirit will bounce back without significant impact on our lives and businesses.  As risk
managers, however, you need to consider the possibility that even a successful rebound may involve significant economic or political issues in some areas, and be prepared with plans to deal with the two issues most likely to disrupt your operations – civil disturbance and disruption of supply chains.

The timing for such disruptions, should they occur, is impossible to predict, but I would be surprised to see an eruption of civil disturbances or falling dominoes in the financial world with disruption to business prior to the elections unless Congress fails to act this week on an economic rescue bill.  I hope we do not see them at all, but contingency planning is our job.