6 ms·

>pursuing quarterly profits and forgetting to look up "Forgetting to look up" implies a desire or intent to do so. The United States - former leader of the col

>pursuing quarterly profits and forgetting to look up "Forgetting to look up" implies a desire or intent to do so. The United States - former leader of the collective West - made the choice decades ago to sacrifice everything on the altar of quarterly profits. All that remains are the consequences of that decision.

pogue 10mo ago
When did this whole quarterly profits thing start and what lead to it?
- cjbgkagh 10mo ago
  Minority shareholder rights, you can be sued for not maximizing profits see Dodge v. Ford Motor Co. (1919).
- jaggederest 10mo ago
  You can round it down to Milton Friedman as the ideology and Jack Welch at GE in the 80s as the implementation and figurehead, but the original seeds were in the SEC mandating quarterly reporting as part of regulation after the great depression. We can all agree to blame Jack Welch as shorthand though, I think.
  - irishcoffee 10mo ago
    I think it changed before that. https://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co https://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co.
- terminalshort 10mo ago
  It's not real. Companies routinely lose money for years in pursuit of long term growth. But for some reason people love to use this as an explanation of everything wrong in our country.
  - jaggederest 10mo ago
    I'd cite as a counterexample in recent memory Sears, GE, Boeing, and Intel. I think collectively they've destroyed close to a trillion dollars by focus on quarterly results over long term, and they're not alone.
    - scrubs 10mo ago
      I sometimes wonder what a Drucker or ishikawa would say of today's "vaunted American management". Speed roughly short term thinking is too strong of a force in our American thinking. Heck I've counted three recent HN posts this month pushing for speedy software development too.
    - tjwebbnorfolk 10mo ago
      Yes, and we all saw what happened. They've experienced serious financial consequences, some went out of business. This is exactly what is supposed to happen when you do dumb shortsighted things. There's also risk in investing in very long-term things that may not pan out. WAI, in other words
      - deleted 10mo ago
        [deleted]
  - mcny 10mo ago
    The exception proves the norm. The only major example I can think of is Amazon dot com which famously reinvested all its profits into itself for well over a decade. The fact that investors didn't punish Amazon dot com was seen as befuddling in the press. > Companies routinely lose money for years in pursuit of long term growth. No, I don't think this is true at all because you used the word "routinely". I would claim it is very rare.
    - neltnerb 10mo ago
      Don't most tech startups lose money for years before they maybe make a profit? I mean, I agree that such companies are over-represented in thinking about small businesses if that's what you mean. Normal companies have to be profitable quickly for sure. It feels like tons of companies get valued based on userbase or revenue or theoretical breakthrough rather than ever having to really think about breaking even, but I know that's just because those folks get all the press.
- trillic 10mo ago
  1910s Dodge v. Ford Motor Co.
monero-xmr 10mo ago
I would just be careful to discount the capitalist West. You’d have to be blind to ignore the massive overbuilding of property in China, which they are now demolishing. All of that wasted capital. Authoritarian regimes with controlled media always seem successful… until it doesn’t. Up until the USSR collapsed there were many prominent people in the West saying it was the superior system. The market test - meaning floating prices and the response to them - is a superior way of allocating capital. We need to see how all of this plays out
- csomar 10mo ago
  > You’d have to be blind to ignore the massive overbuilding of property in China Isn't the same now happening with the US with the massive overbuilding of AI capacity? Seems like a tightly centralized capitalist system is not that different from a communist one.
  - Betelgeux 10mo ago
    Or rather thinking one step forward the question arises, whether we use the right words for the right things? Does the capitalist West has any defining economics characteristics of a liberal free-market capitalism at all? Private ownership of means of production: On an atomic, legal level of course. But if point at an NVIDIA based compute rack at a US based random datacenter, can someone tell me actually who owns it? I am interested in the actual natural person who has an ownership share of this capital asset, not the myriads of layers of corporate and financial networks of equity delegations through investment banks, but the actual owner? Profit oriented: Of course, it is said so. But do really companies, entrepreneurs do things to maximize the profits of the actual owners, shareholders? Are the executives and boards really that keen on putting forward the interest - of the previously referenced unknown - actual owner of the capital assets? Free market based: This has also multiple sub-characteristics, but most importantly something about competition, or rather the lack of collusion and that economic actors (including consumers, (natural person) investors) are all fully informed. How much is this true in the West? I think we are very much lost in labels.
- palmotea 10mo ago
khana 10mo ago
[dead]
everfrustrated 10mo ago
This is slightly reductionist. If consumers _actually_ cared about quality or US-made over price this wouldn't have been possible.
- silver_silver 10mo ago
  My counterpoint is that it’s not possible to buy appliances which last for decades anymore, because the entire industry has changed. Consumers eventually don’t have a choice
  - everfrustrated 10mo ago
    They have much less choice because all of those businesses that cared about quality have gone out of business! 100 years ago clothes were expensive items. Which is why they were class signals - less because of fashion and more because if you were poor you needed to buy long lasting fabrics. Clothes for the poor were expensive as well as the rich. You can buy those same quality items today but nobody will because we expect clothes to be cheap and not have to repair them. Take flights... For all the complaints about lack of legroom etc the price of a flight 50 years ago was the same as first/business class today. And yet how few people will pay for it. They'll grumble about small seats and bad snacks but hardly anybody will fork out for the upgrade. Not because they can't actually afford it but because they believe it should be cheaper.
    - clayhacks 10mo ago
      I think some people can afford those quality goods, the same percentage roughly as could afford it before things got cheaper. The people complaining are people who couldn’t afford those quality goods earlier and now are buying the cheaper versions they can afford. But that has shaped broader consumer preferences for cheaper goods across the board
- mrguyorama 10mo ago
  When a manager at GE decided to turn into a bank and get rid of all the making stuff, how was the consumer supposed to continue buying quality things that didn't exist? When Sears was looted by management, how were consumers supposed to continue purchasing quality stuff from a historic company? You've got your cause and effect backwards. American companies fired everyone who was paid enough to afford good stuff, and replaced them with workers in other countries, and then those people didn't really have a choice but to buy the junk because it was the only option left on the market and they couldn't afford anything else What happened was that American business theory abandoned the American worker.

pogue 10mo ago

When did this whole quarterly profits thing start and what lead to it?

cjbgkagh 10mo ago
Minority shareholder rights, you can be sued for not maximizing profits see Dodge v. Ford Motor Co. (1919).
jaggederest 10mo ago
You can round it down to Milton Friedman as the ideology and Jack Welch at GE in the 80s as the implementation and figurehead, but the original seeds were in the SEC mandating quarterly reporting as part of regulation after the great depression. We can all agree to blame Jack Welch as shorthand though, I think.
- irishcoffee 10mo ago
  I think it changed before that. https://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co https://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co.
terminalshort 10mo ago
It's not real. Companies routinely lose money for years in pursuit of long term growth. But for some reason people love to use this as an explanation of everything wrong in our country.
- jaggederest 10mo ago
  I'd cite as a counterexample in recent memory Sears, GE, Boeing, and Intel. I think collectively they've destroyed close to a trillion dollars by focus on quarterly results over long term, and they're not alone.
  - scrubs 10mo ago
    I sometimes wonder what a Drucker or ishikawa would say of today's "vaunted American management". Speed roughly short term thinking is too strong of a force in our American thinking. Heck I've counted three recent HN posts this month pushing for speedy software development too.
  - tjwebbnorfolk 10mo ago
    Yes, and we all saw what happened. They've experienced serious financial consequences, some went out of business. This is exactly what is supposed to happen when you do dumb shortsighted things. There's also risk in investing in very long-term things that may not pan out. WAI, in other words
    - deleted 10mo ago
      [deleted]
- mcny 10mo ago
  The exception proves the norm. The only major example I can think of is Amazon dot com which famously reinvested all its profits into itself for well over a decade. The fact that investors didn't punish Amazon dot com was seen as befuddling in the press. > Companies routinely lose money for years in pursuit of long term growth. No, I don't think this is true at all because you used the word "routinely". I would claim it is very rare.
  - neltnerb 10mo ago
    Don't most tech startups lose money for years before they maybe make a profit? I mean, I agree that such companies are over-represented in thinking about small businesses if that's what you mean. Normal companies have to be profitable quickly for sure. It feels like tons of companies get valued based on userbase or revenue or theoretical breakthrough rather than ever having to really think about breaking even, but I know that's just because those folks get all the press.
trillic 10mo ago
1910s Dodge v. Ford Motor Co.

monero-xmr 10mo ago

I would just be careful to discount the capitalist West. You’d have to be blind to ignore the massive overbuilding of property in China, which they are now demolishing. All of that wasted capital. Authoritarian regimes with controlled media always seem successful… until it doesn’t. Up until the USSR collapsed there were many prominent people in the West saying it was the superior system. The market test - meaning floating prices and the response to them - is a superior way of allocating capital. We need to see how all of this plays out

csomar 10mo ago
> You’d have to be blind to ignore the massive overbuilding of property in China Isn't the same now happening with the US with the massive overbuilding of AI capacity? Seems like a tightly centralized capitalist system is not that different from a communist one.
- Betelgeux 10mo ago
  Or rather thinking one step forward the question arises, whether we use the right words for the right things? Does the capitalist West has any defining economics characteristics of a liberal free-market capitalism at all? Private ownership of means of production: On an atomic, legal level of course. But if point at an NVIDIA based compute rack at a US based random datacenter, can someone tell me actually who owns it? I am interested in the actual natural person who has an ownership share of this capital asset, not the myriads of layers of corporate and financial networks of equity delegations through investment banks, but the actual owner? Profit oriented: Of course, it is said so. But do really companies, entrepreneurs do things to maximize the profits of the actual owners, shareholders? Are the executives and boards really that keen on putting forward the interest - of the previously referenced unknown - actual owner of the capital assets? Free market based: This has also multiple sub-characteristics, but most importantly something about competition, or rather the lack of collusion and that economic actors (including consumers, (natural person) investors) are all fully informed. How much is this true in the West? I think we are very much lost in labels.
palmotea 10mo ago

khana 10mo ago

[dead]

everfrustrated 10mo ago

This is slightly reductionist. If consumers _actually_ cared about quality or US-made over price this wouldn't have been possible.

silver_silver 10mo ago
My counterpoint is that it’s not possible to buy appliances which last for decades anymore, because the entire industry has changed. Consumers eventually don’t have a choice
- everfrustrated 10mo ago
  They have much less choice because all of those businesses that cared about quality have gone out of business! 100 years ago clothes were expensive items. Which is why they were class signals - less because of fashion and more because if you were poor you needed to buy long lasting fabrics. Clothes for the poor were expensive as well as the rich. You can buy those same quality items today but nobody will because we expect clothes to be cheap and not have to repair them. Take flights... For all the complaints about lack of legroom etc the price of a flight 50 years ago was the same as first/business class today. And yet how few people will pay for it. They'll grumble about small seats and bad snacks but hardly anybody will fork out for the upgrade. Not because they can't actually afford it but because they believe it should be cheaper.
  - clayhacks 10mo ago
    I think some people can afford those quality goods, the same percentage roughly as could afford it before things got cheaper. The people complaining are people who couldn’t afford those quality goods earlier and now are buying the cheaper versions they can afford. But that has shaped broader consumer preferences for cheaper goods across the board
mrguyorama 10mo ago
When a manager at GE decided to turn into a bank and get rid of all the making stuff, how was the consumer supposed to continue buying quality things that didn't exist? When Sears was looted by management, how were consumers supposed to continue purchasing quality stuff from a historic company? You've got your cause and effect backwards. American companies fired everyone who was paid enough to afford good stuff, and replaced them with workers in other countries, and then those people didn't really have a choice but to buy the junk because it was the only option left on the market and they couldn't afford anything else What happened was that American business theory abandoned the American worker.