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ISurfTooMuch

join:2007-04-23
Tuscaloosa, AL

More, more, more!!!

Here's the problem with the entertainment industry and businesses in general: they always want more profits, no matter what. Are economic times tough? Doesn't matter. Are there more alternatives seeking consumers' time? Doesn't matter. Are people getting stressed out over paying more and more? Doesn't matter. They simply refuse to accept the possibility that they might have to settle for less money.

Out in the real world, anyone who runs a household knows that this model simply doesn't work. You can't simply go to your boss and say, "From here on out, I'm going to require a 7% raise each year to offset the fact that I have a child now and will need to buy a new washer and dryer and renovate my house. I know that my current salary allows for these things, but I also want to be able to develop some rental property and take a nice vacation each year." Only an idiot would say something like that. We all know that we have to make do with what we make and either hope for a promotion or look for a better job. Sometimes we may end up wit a little extra in the bank, and sometimes we won't, and the best we can do is manage our money wisely. This is a lesson that businesses desperately need to learn.

CXM_Splicer
Looking at the bigger picture
Premium
join:2011-08-11
NYC
kudos:2
said by ISurfTooMuch:

Here's the problem with the entertainment industry and businesses in general: they always want more profits, no matter what.

I agree with this with one clarification... This phenomenon primarily affects publicly traded companies and is a result of

1) Companies worrying more about their stock price (and pleasing Wall St) than actually running their business

2) The current interpretation of Shareholder Primacy which dictates that business decisions should be made to maximize profits to the shareholders.

These two closely related factors cause businesses to adopt the 'exponential growth' model you describe. If profits aren't increasing it is considered a loss. Unfortunately I don't think they are going to 'learn their lesson' anytime soon. Greed has been let out of its cage and it isn't going back willingly.

ISurfTooMuch

join:2007-04-23
Tuscaloosa, AL

1 edit

1 recommendation

Excellent point. Yes, privately-owned businesses, especially small businesses, understand that. They also usually understand how to treat customers to make sure they remain customers. I've had several instances where local businesses (plumbing/heating and cooling/carpenters) have either not charged me for work or told me how to get small jobs done more cheaply than they could do them, and, when I've thanked them, they've said they value my continued business more than just making a few dollars from me in the short term. And, the thing is, when I need work done, I will definitely call these places first, and if someone asks me for a recommendation, I'll pass along these businesses' names. They've helped me out, so I'll help them out. I feel no such loyalty to the likes of AT&T, Verizon, Comcast, etc. To these corporations, all we amount to are a bunch of money dispensers, and their mission is to make us dispense as much as they can suck out of us.

EDIT: Another facet of companies seeking ever-increasing profits is that it often isn't really about profits; it's about stock appreciation. Shareholders really may not get a whole lot from a company's dividends; what they really want is for the news of increased profits to drive up the stock price so they can sell at the appropriate time. And, given that this whole thirst for profits and stock appreciation is unhealthy for a company long-term, since it can't spend the money it needs to on capital projects, you have to assume that the business will eventually run into trouble. This makes the whole affair a very long pump-and-dump scheme. Investors buy in, ride the company as hard as they can to churn out ever-increasing profits, even to its detriment, watch their stock appreciate, and sell out at the first sign of trouble. The company may suffer, and the stock price may go down, but that's the problem of the schmucks who are just buying in. And, if things get really bad, simply chop up the dying business and sell it off to other companies, either for cash or shares of their stock. Rinse and repeat.

Kearnstd
Space Elf
Premium
join:2002-01-22
Mullica Hill, NJ
kudos:1

1 recommendation

reply to CXM_Splicer
said by CXM_Splicer:

said by ISurfTooMuch:

Here's the problem with the entertainment industry and businesses in general: they always want more profits, no matter what.

I agree with this with one clarification... This phenomenon primarily affects publicly traded companies and is a result of

1) Companies worrying more about their stock price (and pleasing Wall St) than actually running their business

2) The current interpretation of Shareholder Primacy which dictates that business decisions should be made to maximize profits to the shareholders.

These two closely related factors cause businesses to adopt the 'exponential growth' model you describe. If profits aren't increasing it is considered a loss. Unfortunately I don't think they are going to 'learn their lesson' anytime soon. Greed has been let out of its cage and it isn't going back willingly.

This is why I knew "Don't Be Evil" was dead when Google went public. Once they had shareholders to keep happy they would have to do the same thing as everybody else in the industry.
--
[65 Arcanist]Filan(High Elf) Zone: Broadband Reports

armed

join:2000-10-20
Reviews:
·Charter
reply to ISurfTooMuch
I am far from impressed with the average American's understanding and control of their personal economics. Uncontrolled consumption and rampant debt is the byword of too many "households" today. When comparing large business and individual management of money I generally see companies doing a far better job.

Most large companies are doing quite well while the masses wallow in their own inability to self control expenses. Banks are the one big exception to that observation.

CXM_Splicer
Looking at the bigger picture
Premium
join:2011-08-11
NYC
kudos:2
said by armed:

Most large companies are doing quite well while the masses wallow in their own inability to self control expenses. Banks are the one big exception to that observation.

Don't forget the government (Well, they really aren't a company... but still!)

It is an interesting paradigm you point out and I wonder how you think we got here. What caused a country of mostly financially responsible, politically involved, fairly well educated people to evolve into people who only care about the latest TV season and the release of the newest toy?

I would argue that business/the short term economy benefits from this new-found religion of Consumerism but I can't believe it is the only factor. Too many drugs in the 70's? Over paternalization by the government? A shift in education? How did we get here and, more importantly, how do we fix it?

ISurfTooMuch

join:2007-04-23
Tuscaloosa, AL
Unfortunately, we're in the same pattern that occurs to any large empire. At first, the country is either poor or, at the very least, not prosperous, which means that the population and government have to spend wisely. Eventually, expansion and economic dominance bring prosperity, which leads to excess. This not only means excessive spending but also a shift in focus by the population toward entertainment, since many people believe the basics in life are pretty much assured, so they can focus on pleasurable things. Of course, this is a mistake, since a politically rudderless country can't continue to do the things it did to get it to its position of prominence, so the beginnings of decay set in, but, since people aren't really paying attention, they don't see it, or, even if they do see it, many aren't equipped to shift back into economic and political engagement mode in order to effect a change. So the empire slowly falls into decline as other nations and empires ascend.


spelling_b

@comcast.net

2 recommendations

reply to CXM_Splicer
About the new religion of Consumerism - well this started in the 80s with the Baby Boomers. There was a delusional belief of unlimited optimism and growth, which was actively pushed and maintained by the country's leadership. We should all have bigger houses, bigger cars, and bigger boats. Of course everybody also needs all new brand-name appliances, furniture, and clothing to fill these big houses. Just look at the figures of average single family house sizes from the 50s up to the last couple of decades. Keep in mind that family sizes aren't any bigger than they were back in the 50s. If anything they've shrunk.

This is an interesting story with an interesting date:

Behind the Ever-Expanding American Dream House
»www.npr.org/templates/story/stor ··· =5525283

"I believe that you can live out your fantasy," Frisby says. "That is what I'm doing. That is what my wife is doing. That is what other people are doing when they build or buy a house like this."

Note that this story was done back in 2006. He's right though: many, many people then were indeed living out a fantasy. How many of them are still within this fantasy?

Earlier generations (pre-Baby Boomer) were permanently changed by the Great Depression. That event altered their attitude toward spending money, because many of them did not have any money to spend. They also didn't have credit cards, or usury level payday loan/title loan stores on every corner. Those generations well understood the difference between needs and wants, and the value of saving what you can. Unfortunately this severe mentality and militant thrift ended with the Baby Boomers. Thriftiness used to be a high virtue and now it is almost considered a vice. Instead of militant thrift we have militant consumerism.

How to fix it? Well the only way is to reject consumerism entirely and return to an attitude of serious minded thrift. Recycling gets lots of lip service, but you hear less of the complete phrase: "Reduce, Reuse, Recycle." Those first two words are critical. Recycling by itself does no good if we don't reduce consumption, and to do that we can reuse. Most everything possible can be bought used and second hand - the only real exception I can think of is food, and for most people stuff like underwear and socks! Just about everything else can be acquired in thrift stores and on craigslist and such.

I think one thing that underlies this is how many people quickly refer to themselves as consumers. As if our only purpose here is to buy, buy, buy. It's time to stop using the label "consumer". How about citizen, or human being? One thing that would help, as difficult as it is now, would be for people to turn off the television and unplug from Hollywood and pop culture. How many people would have little to talk about with each other if not for popular tv shows and movies? Those great earlier generations did not have all this escapism. They faced a harsh reality head on and they were wiser and stronger for it.

ISurfTooMuch

join:2007-04-23
Tuscaloosa, AL
The article you linked to was quite interesting. My wife and I have a three-bedroom house that was built back in the 1950s. We have one child and another on the way. While they can each have a bedroom, that leaves none for guests. Do we need a bigger house? Nope. When guests come, someone can sleep on the couch. I did that growing up, and it was never a problem.


spelling_b

@comcast.net
reply to ISurfTooMuch
ISurfTooMuch, I always enjoy reading your posts. I didn't mean to be so excessively wordy in mine, but it's something I feel strongly about. I kinda ran out of steam at the end but like you summarized, it's all tied together. You basically nailed it here with your post. That was accurate and precise. Good job!

ISurfTooMuch

join:2007-04-23
Tuscaloosa, AL
Thanks! I enjoy writing, and it's nice to see that some folks like to read my insane ramblings.

One of these days, maybe I'll start a blog or something. I already have the domain registered.

DrStrangLov

join:2012-03-28
kudos:1
reply to spelling_b
said by spelling_b :

About the new religion of Consumerism - well this started in the 80s with the Baby Boomers.

Rain Check - Turner Broadcasting v. Federal Communications Commission, 512 U.S. 622 (1994), is the first of two United States Supreme Court cases dealing with the must carry rules imposed on cable television companies.

»en.wikipedia.org/wiki/Turner_Bro ··· mmission