don't do business stupidly
Republicans, free marketeers, bankers, brokers, home owners and retirees are running scared. Their golem is on the loose. They are pulling their money out of where it was and squeezing what they still have so hard you can hear dead presidents groan. We are seeing our savings and investments vaporize. The believers in the market are in fear of being sucked dry by it.
The karma of stupid management is coming back to bite us in our collective ass.
Managing all kinds of things requires a balanced viewpoint that is informed by the long term view and that listens to all kinds of stakeholders. If you don't look long-term, you will screw up the system that everyone needs to run smoothly. If you don't consider the needs of all those providing input to the process, the process will freeze up and break down. If your approach is not balanced - giving credence to all the important forces at work - what you are managing is likely to sputter and die, or in case of our current financial crisis, implode.
Another principle of managing things - anything from a company to an ecology - is that there are costs to actions. Sorry, all you pyramid schemers, you cannot get something for nothing. The ways in which value and profit are paid for are many. We might pay by suffering waste, by killing workers, by limiting our options in the future, by ruining relationships that could have been productive, or by losing knowledge. Many ways of paying, the most important of which can only be seen when you look farther into the future than the next quarter.
Ain't no free lunch. Ever heard that? The non-stupid manager has heard it, and respects it.
Here is a characterization of one brand (and not just an American brand) of stupid management in business and economics. It is exploitation. Exploitation is one e-word that stands on the opposite end of the spectrum from the other e-word, Earning.
Exploitation occurs when dumbass managers, salespeople, CEOs, politicians, entrepreneurs or bankers grab at a free lunch with such gusto that they are blind to what managers ought to keep their eyes on. Exploitation - motivated by gut desire for instant gratification - won't let the manager's mind or vision have a say.
It is easier to see the dangers of the expoitive approach in specific cases. It is harder to see the effects of exploitation in something as big and fuzzy as an economy. So take some specific cases.
Pay insurance premiums for years and then find out you can't get the insurance company to pay for medical care. Buy an item on eBay and then find out it doesn't exist or doesn't get shipped. Buy a laptop that fries itself and then get told you have to eat the cost. Economy, we all know, is about trust. Violate trust and you wreck the economy, whether you are talking about bullies on the playground taking lunch money or car dealers selling lemons. We know how these kind of dishonesty can add up to crisis of trust.
When the government GIVES cushy deals to a business, someone has to pay. No-bid contracts cost far, far more than they are worth, both in money and goodwill. Rigged bidding is the same. Some of our representatives in Congress and state houses - like Randy Duke Cunningham and such ilk - are giving away your tax dollars to their buddies, with no accountability. This is business as usual, but hardly legitimate business. We all know this kind of corruption adds up to strangulation of the system.
Deficit spending, including credit card debt, catches up with you. Borrowing from Peter to pay Paul goes around and around in a shrinking circle until someone comes after you and takes away something you don't want to lose. Tell the lie that you are ahead when you are really behind and that lie is a cancer.
Say you are in some medical profession. You can make a lot more money pushing drugs than you can actually caring for people's health. What will you do? Doctors are businesspeople. What do they deliver? And how much are they making for not delivering it?
Stealing is not a viable, sustainable business strategy. In fact, because it is not, and because it is bad for all business when one business does it, we have laws against the most overt cases of stealing. (Whether laws are enforced or not is another question.) Companies saying they have a product that they don't produce are using up the leverage of the reputation of their industry to grab investment dollars and consumer dollars that are not earned.
Globalization is praised by the exploitive factions in business. It feels good in the short run to ship labor overseas, cut costs by poisoning people and water somewhere else, or to avoid legal responsibilities to provide safety and standards. Globalization is a form of exporting of business responsibility. Don't want to treat your employees as partners in the process of creating a sustainable business? You can go to China and screw workers there for profit. Don't want to give workers a safe and healthy place to live? Rent a factory in China where workers can be suffocated without costing you a dime. Globalization is a euphemism for exploitation. It has and will come back around to hurt us.
When the mortgage industry got steadlily taken over by the predatory and sub-prime species of lenders, and when the legitimate service providers watched silently while these crooks pushed them out of their offices and into disreputable unemployment, credit markets became cancerous. The bad debt got sold and then sold again, with no individual and no institution along the line standing up to say no. This was a house of cards, it fell, and your pockets are getting picked to pay for it.
Then there is Wall Street. Think trading it too risky. Okay. Try insider trading. Not a problem as long as the regulators and law-enforcers are playing golf with your boss.
Some moments in history give us a clearer look in the mirror. When there is crisis, there is the opportunity to see ourselves in the storm clouds. Have we managed? Or have we exploited?
Look. There is a choice between the two e-words. Or at least there might be once we extract ourselves from the economic constipation created by the short-sighted, selfish, stubborn, shady and stupid businesspeople have created.
