How GMAC's Woes Foretell Consumer Pain

Not surprising at all because the USA is the biggest "communist" country on earth - part 1

The US decline is not surprising, because it is the biggest ‘communist” country on earth. Its private companies, the backbone of the country, such as AIG actually are very public, with so numerous owners that by all means they belong to the general public.

However, with the false assumption of private ownership, the executives of these companies pay no attention to the long-term health of the companies and the interest of the general public, but focus on how to get fatter faster. The divorce of power and ownership is the key of American business and economic failure. From Enron to Wachovia, it has proven that the leaders of our large “private” companies have no other interest but satisfy their own tremendous greed by all possible means as long as they can get away with it.

The divorce of ownership and managerial power also eloquently explains the constant power struggles, absurd reorganizations, and violent turbulence typical of large American companies. Alas, the best brains of our country are employed with laser focus to fight each other for more power and more money!

Have a look at real private such a SAS where none of such stupidity and absurdity exits. For example, a large bank has off-shored its IT operations. On the paper, with the salary difference, there are huge savings. The executives get big bonus as a result. In fact, due to the loss of productivity resulting from the loss of intellectual capital and experience, there are tremendous business losses in IT system stability and impact to the company’s bottom line. However, there are no laws forcing companies reporting how their IT divisions operate. In addition, every company in its right mind will not publish its IT operation problems. Therefore, the fact that this off-shoring strategy is losing large amount of money is not generally known. Therefore, the executives who are responsible for the loss continue to harvest huge amount of bonus. When all the tier one executives have a reward of a few more million dollars, who will speak up and tell the truth that the bank is losing big money on this off-shoring deal of IT operations

Ken Lay of TX @ Oct 15, 2008 23:10:17 PM