[Home] [Headlines] [Latest Articles] [Latest Comments] [Post] [Mail] [Sign-in] [Setup] [Help] [Register]
|
Status: Not Logged In; Sign In
Opinions/Editorials Title: Why "business needs certainty" is destructive If you read the business and even the political press, you've doubtless encountered the claim that the economy is a mess because the threat to reregulate in the wake of a global-economy-wrecking financial crisis is creating "uncertainty." That is touted as the reason why corporations are sitting on their hands and not doing much in the way of hiring and investing. This is propaganda that needs to be laughed out of the room. I approach this issue as as a business practitioner. I have spent decades advising major financial institutions, private equity and hedge funds, and very wealthy individuals (Forbes 400 level) on enterprises they own. I've run a profit center in a major financial firm and have have also operated a consulting business for over 20 years. So I've had extensive exposure to the dysfunction I am about to describe. Commerce is all about making decisions and committing resources with the hope of earning profit when the managers cannot know the future. "Uncertainty" is used casually by the media, but when trying to confront the vagaries of what might happen, analysts distinguish risk from "uncertainty", which for them has a very specific meaning. Post Comment Private Reply Ignore Thread Top • Page Up • Full Thread • Page Down • Bottom/Latest #1. To: Badeye, A K A Stone, hondo68, Fred Mertz, Godwinson, go65, war, no gnu taxes, Skip Intro, ferret mike, jwpegler, brian s, mcgowanjm, Capitalist Eric, Mininggold (#0) The problem is that the "certainty" language reveals what the real game is, which is certainty in top executive pay at the expense of the health of the enterprise, and ultimately, the economy as a whole. Cutting costs is as easy way to produce profits, since the certainty of a good return on your "investment" is high. By contrast, doing what capitalists of legend are supposed to do, find ways to serve customer better by producing better or novel products, is much harder and involves taking real chances and dealing with very real odds of disappointing results. When "gaming the system" replaces innovation, we are done. "...all of the equations in neoclassical economics are rubbish. The differential equations describe nothing. Economics is not about mathematics, it is about the human being." Sandeep Jaitly #2. To: lucysmom (#0) If you read the business and even the political press, you've doubtless encountered the claim that the economy is a mess because the threat to reregulate in the wake of a global-economy-wrecking financial crisis is creating "uncertainty." Like a good little sheep, you pretend the lie is the truth, and the truth is a lie. It's gonna' be HARD for you to do it, but try to use a little common-sense... If I'm going to put some of my money into a company in another country, I want to make sure the country doesn't have a sudden political revolution, where the government takes over all private companies, and my money is lost (commonly referred to as "political risk"). If I'm going to put some of my money into a company in another country, I want to make sure the country doesn't have a sudden economic collapse, like Brazil had in 2000, as they're currency hyperinflated to infinity. In such a situation, my money would (again) be lost. This is country-specific "economic risk." For each threat to whatever I'm considering investing in, there is a premium- extra interest built into the expected returns. If the risks (either economic or political, or both) within a country are too high for the perceived return, I would not invest. If the perceived risks equal the return, then I may, or may not, invest. If the perceived risks are lower than the return, I will definitely invest. This is called the "risk vs. return" relationship, or "risk management." Everyone does this; people and corporations make such decisions, EVERY day... If you think the economy is going swell, and you'll be making more money, you may consider that new Lexus or BMW, or whatever, even if it means you'll be making payments. OTOH, if you believe the economy will continue to spiral down the toilet, and you're uncertain of where you'll get the money to pay for such a car, you may choose instead to stick with the 10 year-old Honda, to play it safe... ALL of this is common sense stuff. Why YOU think it's "propaganda," is your demonstration of "Alice-In-Wonderland" logic. The two sides in America are people who work for a living versus people who vote for their living. #3. To: Capitalist Eric (#2) Why YOU think it's "propaganda," is your demonstration of "Alice-In-Wonderland" logic. Either you didn't read the whole article, or you didn't understand what you read. Keep up the insults, they're entertaining. "...all of the equations in neoclassical economics are rubbish. The differential equations describe nothing. Economics is not about mathematics, it is about the human being." Sandeep Jaitly #4. To: lucysmom (#1) When "gaming the system" replaces innovation, we are done. ZIRP guarantees Depression. Free $$$ to the Insolvemt to continue making Stupid Idiot decisions... Something's breaking now....;}
#5. To: mcgowanjm (#4) Free $$$ to the Insolvemt to continue making Stupid Idiot decisions... It's discouraging. "...all of the equations in neoclassical economics are rubbish. The differential equations describe nothing. Economics is not about mathematics, it is about the human being." Sandeep Jaitly #6. To: lucysmom (#5) It's discouraging. Just hold on, Lucy. Little things... the fact that the USSA MSM doesn't care about how obvious they are in Omitting Any mention of Ron Paul. They'll have to get violent. Cause they're running out of arguements.
#7. To: lucysmom (#3) I read the first two sentences, and knew that you'd simply posted another bullshit propaganda piece. What a surprise.
Keep up the insults, they're entertaining. They're NOT insults. They're objective observations. You assume I GAS about you enough to insult you. You're beneath contempt, and you'll pay a heavy price for your dull stupidity. The two sides in America are people who work for a living versus people who vote for their living. #8. To: Capitalist Eric (#7) They're NOT insults. They're objective observations. LOL You need to load your doctorate up with similar examples of "objective observations".
#9. To: Capitalist Eric (#7) You're beneath contempt, and you'll pay a heavy price for your dull stupidity. You're just upset that I caught you commenting on something you hadn't read. "...all of the equations in neoclassical economics are rubbish. The differential equations describe nothing. Economics is not about mathematics, it is about the human being." Sandeep Jaitly #10. To: lucysmom (#9) You're just upset that I caught you commenting on something you hadn't read. Eric is good for entertainment sometimes, though I usually keep him on filter to avoid cluttering up threads. A while ago he railed against global warming while posting charts that showed warming. Tagline for sale - inquire within #11. To: go65 (#10) A while ago he railed against global warming while posting charts that showed warming. I hope you thanked him for his research. "...all of the equations in neoclassical economics are rubbish. The differential equations describe nothing. Economics is not about mathematics, it is about the human being." Sandeep Jaitly #12. To: go65 (#10) A while ago he railed against global warming while posting charts that showed warming. I saw that too. Seemed a little strange even for him.
#13. To: lucysmom (#9) You're just upset that I caught you commenting on something you hadn't read. More Alice-In-Wonderland logic. (((rolling eyes))) Time to up your meds, grannie. The two sides in America are people who work for a living versus people who vote for their living. Top • Page Up • Full Thread • Page Down • Bottom/Latest |
|
[Home] [Headlines] [Latest Articles] [Latest Comments] [Post] [Mail] [Sign-in] [Setup] [Help] [Register]
|