New York Transit Strike

POSTED BY: Hero
UPDATED: Friday, January 6, 2006 06:29
VIEWED: 3670
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FLETCH2

Monday, January 2, 2006 7:56 PM

Short-termism.

50 years ago the stock exchange was geared towards long term trends, people bought stocks and tended to hold on to them as long as they got reasonable return on that investment. Today you make money on stocks by speculating -- gambling in other words--- hoping that you dump your holding while the price is high and before the other guy does the same. Thus it AT&T has a worse than expected quarter their shares fall far more than the news warrents because everyone is trying to dump shares before the other guy does.

What does this mean? Well suppose developing the transistor cost $300M in modern money (it didn't but bare with me) that would hit the bottom line that year and cause a tumble in AT&T stock. Now we know that research paid off for them, but you can never know that for sure. The absolute safe thing to do is to wait until someone else innovates and then do "me too" products. We see that in everything from consumer goods to feature films. Let someone else take the risks and develop the market and just hope you can grab enough pie to stay in business.

RUE

Monday, January 2, 2006 11:05 PM

But large business has the resources for really LARGE discoveries (Bell Labs for example also invented photovoltaics). Small business doesn't generally have the capital for 'blue-sky' research.

So if small business can't, and large business can but is philosophically disinclined, where should innovation come from?

Nearly everything I know I learned by the grace of others.

FLETCH2

Monday, January 2, 2006 11:44 PM

Well most of it is from public funded government research, either defence or medical.

I read somewhere last week that a major AIDS researcher said that the big Pharmacorps where waiting on government labs and charity to find a cure (which they would then exploit) rather than sink the billions into finding a cure themselves. The money is in management of disease not in the cure.

RUE

Tuesday, January 3, 2006 11:48 PM

Doesn't all this seem a bit one-sided to you?

Nearly everything I know I learned by the grace of others.

FLETCH2

Wednesday, January 4, 2006 3:27 AM

That presumes that the world is "fair" when it is not. Companies have in the past trailblazed new fronteers, if you look back a generation or so companies like Rolls Royce, De Havilland, GE and Westinghouse all developed big technologies and did their own Blue Sky research.

We could argue that the rise in importance of the stock market and of corporate capitalism kills this kind of development but if you look at the other side of the equation, the development and productization of new ideas things are considerably better.

SIGNYM

Wednesday, January 4, 2006 6:15 PM

Quote:
this kind of development but if you look at the other side of the equation, the development and productization of new ideas things are considerably better.

I think what you're saying is "blue-sky" research is falling off in the corporate world but product development and availablity is better?

---------------------------------
Please don't think they give a shit.

FLETCH2

Wednesday, January 4, 2006 9:52 PM

Yes, sorry, that is what I'm saying.... I'm a lil burnt out right now.

DREAMTROVE

Friday, January 6, 2006 6:29 AM

I've worked for govt. in the public school system, for a state university and for a private corporation. My experience was that the govt. wasted a ton of cash, but no one wastes it like the political parties. The thing is that the major waste is in the larger scale operations where corruption sneaks in. Govt. CAN run efficiently, but doesn't have to to survive. Private sector businesses are superior because they MUST run efficiently or perish. Bad companies really only stick around with govt. assistance.

Today there was a news story, Ford Motor, borderline bankrupt because of the Bush Admin pressure on them to make and market more SUVs and cancel an electric car line, introduced a new solar hybrid. This was the case of Ford saying F^&k Bush and going ahead and doing what it needed to do to survive. A govt. wouldn't do the same thing, it would continue being wrong forever until the entire country collapsed. We know this because we've seen it in action many times with most of the socialist states that have ever been.

The thing is it's meaningless for someone to pick out a wealthy european or east asian country and say, look, this is doing well for them, because these are rich countries with educated people and few extant natural problems such as diseases, etc.

It would be like crediting monarchy as a governmental form for the monetary success of Saudi Arabia while ignoring that the country also had oil.

The fact is that I've done an extremely thorough job of analyzing the American economy in every nook and cranny, and what it reveals is the same thing a sort of cursory glance might, which is that the root of almost all of America's economic problems come from the excesses of government spending and the burden that that puts on business, workers and the US currency. The only other strong influence is the failure of the American education system, which is a state run system. It's hard to merit that when your major flawed institution, again through no fault of the people in it, I was one myself, is failing because of bad governmental management, and that govt. spending is hands down the nation's largest economic woe, that we should create new state run institutions and engage in more govt. spending.

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