As we go into yet another week of turbulent economic swings, we must take into consideration what is actually occurring, rather what are the root causes of the failures of such giants as Lehman Brothers and Merrill Lynch?
I know what it is.
It is the inherent flaw that is the American capitalistic drive.
The sad thing is that as many economists who know this, Alan Greenspan and the like, are not apt to letting us allÂ in on what is the flaw in American capitalism.
But, my fellow Americans, it is not rocket surgery (Bush-ism).
Publicly traded American businesses have only one goal in their life…increase shareholder value.
That’s it people.Â Increase shareholder value.
I wrote about this once before and I discuss the concept with my students at the university.
The sole objective of any CEO is to increase shareholder value..at all cost.
Ladies and Gentlemen, this is what we teach in graduate school!
INCREASE SHAREHOLDER VALUE.Â That’s your job as a CEO.
So now the market is correcting itself, or giving itself an enema because the reality is that most Americans cannot in fact afford to pay back the money they have borrowed.
Merrill Lynch, Countrywide, IndyMac, Lehman Bros and others knew this from the get go.
But they still “banked” on it.
Shame on you.Social tagging: General Business