Financial topics

[vincecate]

If there is truly a shortage of competent people in most organizations (I believe that is the case), the Boomer managers will lean extra hard on those competent people who do exist, driving them to the breaking point, and forcing many to leave, further exacerbating the situation.

I wonder if Atlas has already started to shrug.

[Higgenbotham]

I wonder if Atlas has already started to shrug.

Feb 15, 2012
Each month the U.S. Bureau of Labor Statistics tallies the number of job openings that employers can't fill. It's been going up lately - the nation has almost 3.4 million unfilled job openings.

May 8, 2012
There were 3.7 million job openings on the last business day of March, little changed from February but up significantly from a year earlier, the U.S. Bureau of Labor Statistics reported today.

May 4, 2012
At 63.6%, the portion of the working-age population participating in the job market is now at its lowest level since 1981.

[OLD1953]

I honestly do not believe there is a shortage of competent people. Competent people are usually kept hidden by their immediate management and used to make the manager look good. Incompetents are thus promoted and rewarded and get all the limelight, while competent and worthwhile people are the ones most companies regard as "low level, can't be promoted" and are first to be released in layoffs. And that is a large part of the reason why so many say there is no reward for hard work in the USA, there isn't. The rewards go to the lazy and incompetent who have been allowed to rise to the top, propped up by competent underlings who are regarded as worthless by the corporate management level, because they can't progress.

Moreover, some incompetent managers will do everything in their power to get rid of a worker they know could take their job. I've been on the receiving end of that unpleasantness myself, and it's not fun. You think there is a shortage of competent people because the structure in place does everything possible to not hire them, prevent them from advancing, and get rid of them at first opportunity so there is no more risk to the upper management chain.

To be utterly blunt about it, competent people are not a good fit in the current management structure as practiced in the USA. The current structure is friendly to those who will not make decisions, who change positions frequently (so nobody can see how badly they've screwed things up), who utterly defer to the hierarchy and who express everything in powerpoint slides. Powerpoint slides are, IMHO, a device for making people who know absolutely nothing about the subject they are discussing look like they really understand it. Beware the person who can't tell you about their job without powerpoint, they do not know anything about what they are supposed to be doing but they have tasked their competent workers to make up some slides that will make them look good. It's amazing to listen to them speak, every question will be deferred to Mr. or Ms. XXXXXX who is the person working on that project. Ahem. Just what is the boss doing, playing farmville on facebook? Ah, well, one major high end office I personally know about showed over 100hrs of access to farmville from that location over six days by network logs, so I'd say that's not too far off the mark!

This isn't Atlas Shrugged, this is more like Atlas Broke Wind. The truly wealthy can pretty much do whatever they please, if they want to make the proper political donations (both parties) and they've go no real problems. The competent can't work, not because of government, but because we built a corporate structure that is hostile to competence, but very friendly to empire building and "good old boy" systems hidden in the workplace. It's no wonder so many simply pack up and leave, the US is a very unfriendly place to competence now. I've certainly considered it, and hang the higher taxes! I'll make twice as much in two or three years just from getting out from under this "Harvard Business School" model of business.

[vincecate]

The competent can't work, not because of government, but because we built a corporate structure that is hostile to competence, but very friendly to empire building and "good old boy" systems hidden in the workplace. It's no wonder so many simply pack up and leave, the US is a very unfriendly place to competence now. I've certainly considered it, and hang the higher taxes!

I left the US in 1994 and renounced my citizenship in 1998. I am happy I did.

[Marc]

At the heart of far too many organizations in the USA and elsewhere today are dysfunctional organizational cultures. They got that way largely, I feel, due to increasing emphases placed upon the individual at the expense of the community or organization — a process which especially seemed to ramp up in the 1980s. Some of this is no doubt directly generational-driven, e.g., Boomers who were never raised to value analytical skills, and Gen-X'ers who can be nihilistic and who have an aversion to attention-to-detail issues. But, what has no doubt helped the process along, related to the ever-increasing quest for profits and high stock prices, is conflicts of interest between senior management and boards of directors, and between the boards of directors of different companies (especially through their compensation committees). Oftentimes, if someone is able to make it into senior management within at least a medium-sized company, he or she can carry out a "cosmetically commendable" performance, allowing him/her to remain at the company for awhile and/or get something more lucrative career-wise elsewhere. Dysfunctional organizational cultures thus morph into "dysfunctional industry cultures," in where entire industries are populated with too many overpaid senior-management personnel who are much more concerned with their own careers than with the benefit of the company and its host community or communities.

The only solution here is likely a "Fourth Turning sweeping" that breaks this dysfunctional management/business environment, helped along, no doubt, by the emerging Civic and Artist generations who seem to harbor more healthy attitudes to organizational behavior and a sense of community. In the meantime, for the enlightened entrepreneur, keep in mind that you need to have continuous key people at the top of the organization to create an organizational culture that avoids these problems — and which truly rewards competent people properly. Hope this helps —Best regards, Marc

[OLD1953]

Production ratios of silver vs gold are about 8 to 1, the price ratio is much wider. Over the long term (and since the huge gold/silver discoveries in the American West changed those ratios forever) we seem to see a range from about 15 to 1 to about 25 to 1 as the long term band for price ratios. Since the crash of the 70's it has indeed been a much wider ratio, but then we've had bubbles in everything since that time, so why not metals? If the gold/silver ratio goes back to historic norms after the crisis peaks, there'll be a lot of unhappy people holding gold.

Don't know if you guys missed it, but a couple of applied math gurus working for the govt figured out exactly what caused the obesity epidemic.

http://www.nytimes.com/2012/05/15/scien ... .html?_r=1

Worth a read as a take on modern business and its purpose, especially in the nonprofits.

http://www.crn.com/news/channel-program ... AAAFiLAwA=

[Marc]

Worth a read as a take on modern business and its purpose, especially in the nonprofits.

http://www.crn.com/news/channel-program ... AAAFiLAwA=

Thanks for posting (along with the other just-posted stuff). That article (in the above link) is an excellent case study that is applicable, I feel, to organizational-oversight and organizational-compensation issues in all general work sectors (i.e., nonprofit, business, and governmental). And, there are far too many organizations out there which certainly need much better oversight and control, especially regarding senior-level compensation. Thanks again, OLD, for posting. —Best regards, Marc

[Higgenbotham]

You think there is a shortage of competent people because the structure in place does everything possible to not hire them, prevent them from advancing, and get rid of them at first opportunity so there is no more risk to the upper management chain.

Thinking about previous comments, two ideas were put forth - there may be a shortage of competent people as a whole due to greater complexity, and/or there may be a shortage of competent people in most organizations.

Your comment reminds me of some things I saw many years ago. I bought a house in a lower income neighborhood and one of the first things I noticed was I could hear a man yelling at the top of his lungs every morning. One of the neighbors said she knew him, he had graduated first in his (their) class and had gone crazy. Had another neighbor who was on food stamps from time to time, slept in a dumpster from time to time after his house was foreclosed on after a divorce, etc. His history was that he had worked at Texas Instruments and the place drove him nuts. To hear him tell the story, he was brilliant and everyone else was stupid. Normally, I would dismiss that but I saw a lot of evidence to back up his claims. One day I gave him a ride and the heater in my car didn't work. He told me to stop at the hardware store and got a pair of alligator clips and had the heater working in about 2 minutes. He pulled the ashtray out and told me to attach the alligator clip to the metal part of the ashtray whenever I wanted to turn on the heat. I could relate many other instances to demonstrate that the entire family was brilliant. Yet, they were all on goverment aid and the males were all in trouble with the law. His kid did work for me (which was outstanding), sometimes leaving for an appointment with his probation officer.

Seems to me it's the deficit spending that allows these types of people to be pushed out, as the deficit spending allows very large marginal and politically favored organizations with perhaps a disproportionate number of incompetents to be profitable. Without deficit spending, money printing, whatever we call it, you just can't afford to marginalize highly competent people. And the funny thing is, the system is so repressive towards the competent that many of them become permanently dysfunctional or disabled and reliant on government aid - at least, that's what I've seen - which often extends to their offspring. Which is perhaps another way to describe how societies collapse.

Another acquaintance I knew in that town started a retail electronics store and did $5 million in sales the first or second year. The guy was brilliant, the business failed, he lost his mind and he stabbed himself through the heart, leaving two young kids behind. His daughter went on to graduate first in her HS class and was a National Merit finalist. She wants to be an alternative medicine practitioner. If current trends continue, the FDA will probably raid her office, shut her down, and she'll commit suicide. This would be especially likely if she turns out to be highly competent and can cure people at low cost. Both of the kids are afraid they'll end up committing suicide. I suppose if her Dad had gone to work for Best Buy he'd still be around, but some people just can't do that. The landscape today is very inhospitable for folks like him. My sister runs a small business and lately she has told me that some days she wishes she was dead.

[Higgenbotham]

Back to the stock market.

Last year, I had come up with some daily turning points that turned out to be close. Later, after the August crash, there was some discussion about how things were becoming more chaotic. I believe the chaos is being created by excess and unevenly distributed money in the system, which is the opposite in some ways of what existed in the 1930s. A shortage of money (or deflation) should in theory restore order. There is a shortage of money in many areas but order can't be restored due to the excess, so there's a lot of friction in the economy which will probably spill over into other areas.

Due to the way the excess money is being used there's of course the danger that large blocks of it can lock up (I think) if a situation like the JP Morgan loss were to get out of control and start to grow exponentially.

Since the LTRO, I haven't been able to call the market and have been mostly wrong. At the moment, I can only call the stock market with high accuracy about 15 minutes in advance to perhaps as long as 120 minutes, and that's it.

I can see the possibility of a huge crash starting next week but would only be able to see it maybe a few minutes in advance as it begins to unfold. I think the beginning of next week is more likely to start out positive if a crash pattern is to develop.

[Higgenbotham]

Regarding whether there's a shortage of competent people within an organization, I have witnessed the demise of Eastman Kodak Company over a 40 year period. When I was a kid, probably half the people I knew had parents who worked at Kodak. 30 years ago, Kodak was one of the largest businesses in the world and part of the Dow 30. Many of my classmates in turn worked for Kodak. 3 years ago, I got a fairly complete list of my former classmates with their occupations. I was especially interested to see who still worked for Kodak. Turned out there were 3 or 4 people who still did. I knew them all personally and in fact talked to two of them briefly that year and corresponded with one. Those 3 or 4 people were all unremarkable so far as I could remember. For sure, none of them were in the top 10% of the class and it is likely that none were in the bottom 10% either. My best guess is they were average students and of average competence. They seemed to have a nagging feeling that they should have done something different with their lives. On the other hand, I was aware of several who had left Kodak and who almost for sure were more competent than the ones who still worked there.