Too Big to Fail – Too Dumb to Succeed
Hi Ho - Hi Ho
It’s incredible that huge corporations like Enron, AIG, etc etc etc etc could fail so spectacularly that they need bailing out, right?
On the other hand it’s very OBVIOUS why they failed – they were grossly mismanaged, must have been operating on completely erroneous economic principles, and had been encouraged to ignore all the common sense rules of operation the owner of my local noodle bar (who has not been to Harvard) practices as a matter of survival necessity.
Therefore you’d be really interested in what the guy who won a Nobel Prize for Economics has to say: http://www.bloomberg.com/apps/news?pid=20601103&sid=a2aNOdTIAtLc
Here are some scary quotes:
Why did those big guys fail?
“There is no silver bullet,” Williamson, 77, said at a news conference yesterday at the University of California at Berkeley, where he is professor emeritus. “There is no instant answer that I or any of my students or any of my colleagues would be prepared to advance on that.”
In other words, the ‘science’ of economics doesn’t exist – you cannot apply any basic principles to buying and selling anything. Don’t tell my noodle bar guy that – he KNOWS that there are silver bullets, like good service and good quality of noodles, making sure he’s open for the lunchtime crowd, putting up a sign showing what’s on the menu. Etc Etc Etc…
Why didn’t any of these big guys see the disaster coming?
“There’s a possibility we could foresee some of the hazards,” such as those in the current crisis, and “take advance action,” Williamson said.
Only a possibility? My noodle bar guy KNOWS he can confidently predict disaster any time he omits to load his silver bullets.
What amazing wisdom does this Nobel Prize winner have to impart after 50 years of close-up scrutiny of businesses?
In his academic work, Williamson found that large corporations exist primarily because they are efficient and benefit owners, workers, suppliers and customers, the Royal Swedish Academy of Sciences said today in Stockholm.
Come again? You mean big businesses exist because they sell useful stuff to their customers? Wow. Now there’s an eye-opener. Of course my noodle bar guy knew that 12 years ago, when he was 15 years old…
But here’s my fave quote. This guy should be an example of a highly tuned, logical, scientifically thinking individual able to predict causes and consequences. When asked why he thought he won the Nobel Prize, he said he was “a lucky guy.”
On the other hand, now that I come to think of it, maybe that’s not so funny because he sure didn’t win it for being on top of his job and having a clue, and he wouldn’t last a week in the real world.
