Another Ayn Rand disaster

[LMNO]

http://krugman.blogs.nytimes.com/2013/07/16/john-galt-and-the-theory-of-the-firm/
http://www.businessweek.com/articles/2013-07-11/at-sears-eddie-lamperts-warring-divisions-model-adds-to-the-troubles

Eddie Lampert's big idea is that markets and competition rool, so he's forcing the different parts of Sears to compete for resources just as if they were independent firms, with individual division profitability the only criterion for success... The first issue that should pop into anyone's head here is, if the different divisions of Sears have no common interests, if the best model is competition red in tooth and claw, why should Sears exist at all?

...We may live in a market sea, but that sea is dotted with many islands that we call firms, some of them quite large, within which decisions are made not via markets but via hierarchy — even, you might say, via central planning. Clearly, there are some things you don't want to leave up to the market — the market itself is telling us that, by creating those islands of planning and hierarchy.

The thing is, however, that for a free-market true believer the recognition that some things are best not left up to markets should be a disturbing notion. If the limitations of markets in providing certain kinds of shared services are important enough to justify the creation of command-and-control entities with hundreds of thousands or even millions of workers, might there not even be some goods and services (*cough* health care *cough*) best provided by non-market means even at the level of the economy as a whole?

Sometimes, the Invisible Hand gives you the finger:  Their stock has sunk 64%.

[Mesozoic Mister Nigel]

http://krugman.blogs.nytimes.com/2013/07/16/john-galt-and-the-theory-of-the-firm/
http://www.businessweek.com/articles/2013-07-11/at-sears-eddie-lamperts-warring-divisions-model-adds-to-the-troubles

Eddie Lampert's big idea is that markets and competition rool, so he's forcing the different parts of Sears to compete for resources just as if they were independent firms, with individual division profitability the only criterion for success... The first issue that should pop into anyone's head here is, if the different divisions of Sears have no common interests, if the best model is competition red in tooth and claw, why should Sears exist at all?

...We may live in a market sea, but that sea is dotted with many islands that we call firms, some of them quite large, within which decisions are made not via markets but via hierarchy — even, you might say, via central planning. Clearly, there are some things you don't want to leave up to the market — the market itself is telling us that, by creating those islands of planning and hierarchy.

The thing is, however, that for a free-market true believer the recognition that some things are best not left up to markets should be a disturbing notion. If the limitations of markets in providing certain kinds of shared services are important enough to justify the creation of command-and-control entities with hundreds of thousands or even millions of workers, might there not even be some goods and services (*cough* health care *cough*) best provided by non-market means even at the level of the economy as a whole?

Sometimes, the Invisible Hand gives you the finger:  Their stock has sunk 64%.

Wow, that has to be the dumbest business model I've ever heard of. "Divisions shall compete amongst themselves!"

[Doktor Howl]

AT&T did that in the 80s, which is why their PC dominates the market.   

[LMNO]

AT&T did that in the 80s, which is why their PC dominates the market.   

[McGrupp]

This seems like it will end in a Lord of the Flies scenario.

[LMNO]

I'd be psyched to see a senior executive crouched on his desk, snarling, with the head of a pig on a stake.

[Doktor Howl]

I'd be psyched to see a senior executive crouched on his desk, snarling, with the head of a pig on a stake.

Our execs do that as a matter of routine.  They are all painted like Maori and...Um, scratch that.  I have no idea why I say these horrible things.  They are a clean and sober lot, and sup only on the tears of orphan children.

[Nephew Twiddleton]

Why would this be considered a good idea?

[Junkenstein]

Didn't Enron pull some shit like this as well?

[Q. G. Pennyworth]

So... someone decided it was time for Sears to go away? This is what I'm hearing.

[Junkenstein]

The bloodiest battles took place in the marketing meetings, where different units sent their CMOs to fight for space in the weekly circular. These sessions would often degenerate into screaming matches. Marketing chiefs would argue to the point of exhaustion. The result, former executives say, was a "Frankenstein" circular with incoherent product combinations (think screwdrivers being advertised next to lingerie).

Eventually Lampert's advisory committee instituted a bidding system, forcing the units to pay for space in the circular. This eliminated some of the infighting but created a new problem: The wealthier business units, such as appliances, could purchase more space. Two former business unit heads recall how, for the 2011 Mother's Day circular, the sporting-goods unit purchased space on the cover for a product called a Doodle Bug minibike, popular with young boys.

Fucking wonderful. Guy from Freakonomics involved in this shitheap too. So that marks him as a bad businessman and a racist now. How does he get work again?

[Mesozoic Mister Nigel]

The bloodiest battles took place in the marketing meetings, where different units sent their CMOs to fight for space in the weekly circular. These sessions would often degenerate into screaming matches. Marketing chiefs would argue to the point of exhaustion. The result, former executives say, was a "Frankenstein" circular with incoherent product combinations (think screwdrivers being advertised next to lingerie).

Eventually Lampert's advisory committee instituted a bidding system, forcing the units to pay for space in the circular. This eliminated some of the infighting but created a new problem: The wealthier business units, such as appliances, could purchase more space. Two former business unit heads recall how, for the 2011 Mother's Day circular, the sporting-goods unit purchased space on the cover for a product called a Doodle Bug minibike, popular with young boys.

Fucking wonderful. Guy from Freakonomics involved in this shitheap too. So that marks him as a bad businessman and a racist now. How does he get work again?

Eh, explain?

[Cramulus]

we need a social safety net for the men's shoe department


NO, THAT'S SHOE SOCIALISM

[Junkenstein]

Levitt got taken on as a Consultant by Lampert, loved his ideas etc...

The freakonomics video had a section on abortion, race and crime and I recall a lot of shit flying around about how badly the data was interpreted. It basically came down to "There's less crime in X decade compared to Y because less black kids."

It was pretty much that blunt too. Will see what I can dig out, bear with me.

[Junkenstein]

Ah, here we go:
http://exiledonline.com/s-h-a-m-e-profile-freakonomics-author-steven-levitt-is-an-anti-labor-pro-prison-milton-friedman-extremist/

Steven Levitt, University of Chicago economist, gained nationwide fame and prestige after co-authoring Freakonomics, a pop economics book based partly on Levitt's original economic research. Published in 2005, Freakonomics became an instant #1 bestseller and spawned an entire Freakonomics media franchise that included a branded Freakonomics blog (hosted on the New York Times website until 2011), a regular segment on the National Public Radio program Marketplace, a Freakonomics movie and, alas, a Freakonomics business consulting company (now called the Greatest Good).

In 2006, Time magazine solidified Levitt's "thought leader" status by naming him one of "100 People Who Shape Our World."* But despite Levitt's high profile, very little has been written about his academic and ideological background. Generally Levitt is assumed to be a harmless, quirky pop economist for trivia nerds. But is that really the case?

As Steven Levitt's S.H.A.M.E. Profile demonstrates, Levitt is a dyed-in-the-wool Chicago School neoliberal who believes in the sanctity of "the market" and a small government whose function is restricted mostly to protecting property rights. He has used "objective" economic research and mainstream credibility as cover, while attacking teachers' unions, advocating for the privatization of prison labor, spreading crude climate denialism and promoting rank "free market" ideology that sees human labor as a resource to be extracted for maximum profit. Levitt has also developed a nasty habit of misrepresenting the research of other scientists in order to reach predefined ideological conclusions, and has failed to disclose financial conflicts of interest.

I smelt bullshit on this guy years ago but only got confirmation fairly recently. I think I may have had Cain to thank for that, I can't quite recall.

But yeah, Everytime I see this guy's name mentioned in a positive light it sickens me a little.