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Comment by forgotmyinfo | Hacker News Reader

Y'all're gonna hate this, but financialization and the relentless pursuit of profits. Every time this stuff happens, people ask why, and it's because of greed. When you focus on making money above all else, this is what happens. It's not a mystery.

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It’s this, absolutely. Professional managers trained in finance who either don’t know or don’t care about the actual business they’re managing. Work = moving money around a spreadsheet and all else is incidental at best and something to be avoided at worst, doubly so if it can’t be captured in a spreadsheet with a dollar value attached.

This is where regulation steps in. A regulatory body should make the cost of certain failure scenarios so painful that companies are incentivized to make better choices. We probably don't need regulations about the color choices of t-shirts, but safety & testing for mass-transit vehicles might be warranted.

That's the future guy's problem. So long as it is possible to cash out before the consequences happen that sort of regulation won't move the needle much.

Making it illegal to be a bad CEO is one of those things that sounds intriguing on paper, but would be a nightmare to implement in real life.

Prosecutor: "You inflated investor returns by sabotaging the future survival of the company and made shoddy products that killed people."

Former CEO: "So what?"

The worst part is that this is a real problem. So many formerly strong companies have been brought down by this behavior that it is becoming notable when it doesn't happen. We are allowing these guys to destroy the American economy slowly just because it makes them and their close buddies ridiculous money. And of course the government is largely captured by these same people, so Washington isn't going to help. Just so frustrating.

This phenomenon also explains some others that may or may not be surprising:

1. Founder led companies have higher returns. And it's by A LOT. Hard to quantify exactly but, I've seen quoted numbers as high as 20% outperformance for founder led companies.

2. The biggest corporations never remain the biggest. Where is the Dutch East India company today? More recent examples: IBM was overtaken by Nippon Telephone, was overtaken by Exxon Mobil, was overtaken by GE, was overtaken by Microsoft etc.

3. It's not very common that a company stays in the S&P 500 for more than 30 years. The average lifespan is 21 years.

The common thread is that as soon as the sociopath MBA's take over, they Boeing the whole business.

>IBM was overtaken by Nippon Telephone, was overtaken by Exxon Mobil, was overtaken by GE, was overtaken by Microsoft etc.

And where is GE these days? They even sold off their consumer appliance division to the Chinese company Haier. They still make jet engines and some other big industrial stuff, but they're not as huge as they used to be.

No. Under nearly any other circumstance a company like Boeing would simply go under.

If a car manufacturer pulled something like this they either have to fix it really fast or have to face severe financial consequences.

You have to realize that Boeing's customers have no alternative. They will be buying planes from Boeing.

Unless the DoJ splits up Boeing, which is what they should do. If Apple's iPhone is a monopoly with dozens of Android alternatives, what does that say about Boeing?

The DoJ doesn't want to split up Boeing, because then it'll be even less competitive against Airbus. Economies of scale are important in large manufacturing operations.

Boeing at this point is a sort of nationalized industry.

It's almost as if an economic system based on maximizing greed instead of reigning it in was not sustainable or desirable.

*for some domains.

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