General Discussion
Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsThe corporations like to make money off their customers in more ways these days.
Last edited Thu Jan 26, 2012, 10:13 PM - Edit history (4)
The Economist magazine had an article that talked about how in 1990 MBA schools started to teach business people to attack their customers, government, stockholders, not just their competitors.
Big banks certainly did that with sub prime mortgages. They took the fact that banks changed the 'rules' on what a 'good' mortgage was, as a way to fool people into getting loans. Then they packaged those horrid loans and sold them to other unsuspecting customers as derivatives. Their customers assumed that these were like old time bank loans where banks were discriminating in who they loaned to. That change in assumption was how so many bankers got bonuses on massive amounts of these transactions. With corporations 'competing' with customers based on 'new assumptions' the customers don't know about, it is a confidence game
Not only that, but the main assumption in all economic models is the 'given perfect information' demand and supply will find some ideal equilibrium. If information is purposely exploited, what is to stop corporations from misinforming or creating a misinforming industry (advertisements, politics, fox news). Nothing! The bankers misinformed Americans when, as a group, they refused to apologize in front of congress. That was play acting & propaganda.
Market failure is certainly what happened with the subprime mortagage crisis. It screams out for regulations, not just on financial instruments, but also on the role information and assumptions play in markets. Corporations are desperate for new areas of growth now that the Western economies are mature. Let's not let these new markets be totally based on disinformation.
KT2000
(20,588 posts)responsible for the denigration of our society. They cannot calculate the intangibles such as trust and loyalty, so for them, they do not exist. Their attacks have destroyed the glue that holds a decent society together.
Zalatix
(8,994 posts)That's the term they use for things that cannot be calculated and quantified.
KT2000
(20,588 posts)a manufacturing company decided to change their payments on invoices from 30 to 90 days - because everyone is doing it. Their vendors refused to do business with them,
My nephew repairs/replaces transmissions in huge equipment. He now makes a practice of holding repaired equipment until payment is in hand - that includes the US Army!!
Things have become very adversarial - which costs even more.
WCGreen
(45,558 posts)of computer technology.
And it is much easier to measure quantify than qualify.
Zalatix
(8,994 posts)The MBAs have reduced everything to game theory matrices and statistics.
ARGH.