SWA meltdown: technical debt from short term fiscal thinking | Hacker News Reader

SWA meltdown: technical debt from short term fiscal thinking

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10 pointsangry_octet9 comments

There's a very similar article in NYTImes: https://www.nytimes.com/2022/12/31/opinion/southwest-airline... that attributes the tech debt to years of negligence attributed to mistaken corporate incentives. "So why didn’t Southwest simply update its software and systems?

Well, if you are a corporate executive whose compensation is tied to stock prices and earnings statements released every three months, there are strong incentives to address any immediate problem by essentially adding a bit of duct tape and wire to what you already have, rather than spending a large amount of money — updating software is costly and difficult — to address the root problem."

How are we supposed to read a facebook.com link without an account?

Worked for me? Users can make posts fully public I think.

I understand your concern with fb, but I visit in incognito and don't have a problem.

Another article that describes capitalism doing what capitalism does without calling it capitalism because capitalism is awesome always.

Now the capitalists who didn’t think so short term are the ones who will survive

The capitalists who did think short term will survive, too. The people who made these short-term decisions over and over again; the C-suite executives; they've already banked millions of dollars. If they even lose their jobs, they'll just move on to another company or retire.

Whoever replaces them will have to fix some of the problems for optics reasons, but ultimately will be operating under the same short-term thinking, because that's what capitalism incentivizes: grow no matter what, even if it's not sustainable, because while it grows you make money, and when it falls apart it becomes the next guy's problem.

The people who will pay the consequences for this are the airline workers who will likely suffer layoffs even though they had nothing to do with the problem.

The funny thing is it isn't efficient capitalism -- the shareholders are losing value. These are dumb shareholders who reward short termism. SWA will lose value as passengers opt for other carriers, buoying their share price over SWA. The interesting effect is the lag -- the share market should have devalued SWA a decade ago, or certainly when the market lost stability due to COVID.

Shareholders don't have visibility into the internal workings of SWA that would have been necessary to predict this. Sure, there's a lot of information you have the right to, but if you're investing in a diversified portfolio, you eventually are limited simply by time: you can (and should!) do some research on a company before you invest, but ultimately if you're investing in, say, 100 companies, you only have time to dig so deep into each one.

And this is efficient capitalism for the people who have the visibility and decision-making power. C-level execs are measured by their ability to produce growth, so they do that, even if it's not sustainable, because while they're producing growth they're receiving massive amounts of income. When it all falls apart, the income they've received over years of short-term decisions is safe and they can, at worst, retire.

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