So are we in a recession yet?
I started working, for real, full time in 1984, so it's nearly 25 years, a quarter of a century since I entered the work force.
In the wake of all the investment bank failures, company bankruptcies and general business lunacy I was thinking about how different it all was only 25 years ago.
I started my career at MCI. I had dropped out of school and had moved to San Francisco with my family. I was looking for a job and I answered an ad for MCI, they were looking for part time customer service people at $6.00 per hour. I got the job. I remember distinctly thinking, "this will do until something better comes along." It kind of looks like the joke's on me.
So not only is MCI no longer in business, but IBM has materially changed what they do, the big eight accounting firms are on their way to be the big two (PriceCoopersWaterhouseAndersonChickenOfTheSea.) Merrill Lynch (which has a pretty big part in the destruction of MCI) is now Bank of America, Lehman Brothers is just gone and AIG is circling the drain. If you had told me any of this when I started working I wouldn't have believed you.
There's a good reason for that. You actually have to work in a corporation before you can appreciate the dysfunction of the business world.
There are things I had to experience twice to believe that they happened the first time. I think that there's a pervasive myth out there that the heads of business are these geniuses who have amazing instincts are super-intelligent and who have their fingers on the pulse of...something. Lies. All of it lies.
Business doesn't prosper because of it's management, but in spite of it. It's all The Emperor's New Clothes. There's no killer ap, there's no big idea, there's a whole lot of mediocre white guys at the helms of big corporations and they have no idea what's going on any more than you or I do.
My family is from Pittsburgh, home of many self-made men. Men who took advantage of a changing world and built fortunes that have lasted generations. But really, where is US Steel these days? They're USX now, and they've closed most of the mills in the US. Most steel is imported from eastern Europe now. Where's MicroSoft going to be in ten years? They can't have the monopoly forever.
It took monopolies to make these big corporations. AT&T was a giant, a cumbersome, personnel-heavy, monolith. And why not? Who was competing with them? Telegraph? You must be joking.
It's a fact that AT&T actually stopped technology. Would it surprise you to know that wireless technologies have been available since the Carterphone Decision in 1968. When the Internet was young the engineers had to BEG AT&T to get on board with providing the network for data transmissions because no one at Ma Bell could envision what anyone would do with the capability. All that bragging about Telstar and Bell Labs and there was no real innovation until the Modified Final Judgement in 1984, caused by MCI, which is where I came in.
What's changing? Why are all of these huge, venerable corporations crumbling? Is it bad leadership? No. The leadership hasn't changed much. Business was probably more ruthless before the SEC and government agencies started poking their noses in. I'd say that Sarbanes-Oxley might have something to do with it. Business is like sausage and law, you really don't want to see what goes into it. Once Sar-Ox pulled back the curtain, we all saw that there wasn't a great and all powerful wizard, but just a middle-aged guy, working the levers like hell trying to keep the illusion going.
My money is still in the Standard and Poors 500, with a couple of bucks in Argentinian grain (as a hedge.) It'll all come back. I've seen it before and it always does. We forget the lessons of the past, sort of like Groundhog Day. If you just sit above it all, you can watch as people claim that this time the sky really is falling, meanwhile, you can just do what you do knowing that what goes up, comes down, and what is down, must go up.
People still live in Florida, even after Ivan, Wilma, Andrew and other alphabetical demons. The casinos in Biloxi couldn't wait to re-open. People in California pay half a million dollars for a salt box on a fault, can't afford to insure it and are fool-hardy enough to think of their homes as investments.
My goal is to make money when I can, to do as good a job as possible under the circumstances and to have as much fun as possible in the meantime.
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2 comments:
Agree 150% about the cognitive capabilities of management. A female friend (with whom I've shamefully fallen out of touch) who started a consultancy to help Pharma companies navigate FDA regulations (a story of managerial ineptitude in itself, because she learned the FDA regulations as an employee of various big Pharma firms, was ignored as an employee, saw the $$$ and respect go to consultancies that couldn't even spell FDA...but I digress) said that in order to be in upper management, one had to (1) "have a penis" and (2) attended, but not done too well at, an Ivy League School.
I suppose the requirement for mediocre grades has been relaxed recently. The results have been disasterous.
I understood that Bell Labs, whether by design or not, did little applied research, but had a superb portfolio of basic research. (How can you make a product of detecting the radio frequency echo of the Big Bang?) I know a retired physicist who calls it a tragedy for science that it became Lucent. Any truth to that, or just more sentimental bullshit and branding?
Also regarding Microsoft: as I understand it, they didn't even write the original PC-DOS, but bought it from a tiny Seattle software shop for $50,000—and a provision of the sale was that the real author could never mention that he was the author in any future marketing or advertising material.
The real power of corporations has to do with their relative market positions and capital strength, neither of which has anything to do with the quality of the product or acumen of upper management. In fact....
My experience has been that if a firm has a decent product or provides a good service (per the above, neither of which guarantees the health of the firm), it's because of the diligence of folks waaaaay down the org chart. Beyond that, management directives/plans/specs etc., are usually so far removed from reality that a lot of decision making really happens near the bottom of the org chart.
Maybe this is just peculiar to the industry I worked in (software), but I was wondering if you saw anything like that.
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