Some Chicago Boyz know each other from student days at the University of Chicago. Others are Chicago boys in spirit. The blog name is also intended as a good-humored gesture of admiration for distinguished Chicago School economists and fellow travelers.
David Foster I posted the question “What would you do if you were running General Motors?” A lively discussion resulted, with over 100 comments…thought it might be worthwhile reposting in view of recent events.
One of the most memorable comments was from Ralf, on another discussion thread:
“What would you do if you were running General Motors?”
I would stop running the company and start just plain running. :)
Newly-elected Congressman Jared Polis (a Democrat!) offers some interesting thoughts on the politics of the automotive industry:
Our United States Congress of lawyers, doctors, diplomats, retired military officers and career politicians — along with their staffs of intelligent young political science majors and MBAs — now finds itself poring over “business plans” submitted this week by Ford, GM and Chrysler. People who have never before in their lives seen — no less implemented — a business plan are now trying to decide if these companies will succeed by means of a “capital infusion” with various imposed preconditions and negotiate what we taxpayers (investors) should be getting for our money. Something is wrong with this picture.
Here’s an open thread, if anyone feels like discussing this issue.
Among liberals, “progressives,” and especially academics, there is great joy at the prospect of an administration dominated by people who had very high SAT scores and who possess advanced degrees.
At the same point in time, we are experiencing a serious credit crisis, brought about to a substantial extent by naive and inadequate mathematical models–mostly developed by people with very high SAT scores and very often with advanced degrees.
About 20 years ago, Peter Drucker wrote a wonderful pseudo-autobiography, “Adventures of a Bystander.” It tells his own story only indirectly, via profiles of people he has known. These range from from his grandmother and his 4th-grade teacher in Austria to Henry Luce (Time-Life) and Alfred Sloan (GM).
In the chapter titled “Ernest Freedberg’s World,” Drucker writes about two old-line merchants. The first of these, called “Uncle Henry” by those who knew him, was the founder and owner of a large and succesful department store. When Drucker met him, he was already in his eighties. Uncle Henry was a businessman who did things by intuition more than by formal analysis, and his own son Irving, a Harvard B-School graduate, was appalled at “the unsystematic and unscientific way the store was being run.”
Drucker remembers his conversations with Uncle Henry. “He would tell stories constantly, always to do with a late consignment of ladies’ hats, or a shipment of mismatched umbrellas, or the notions counter. His stories would drive me up the wall. But gradually I learned to listen, at least with one ear. For surprisingly enough he always leaped to a generalization from the farrago of anecdotes and stocking sizes and color promotions in lieu of markdowns for mismatched umbrellas.”
Reflecting many years later, Drucker observes: “There are lots of people with grasshopper minds who can only go from one specific to another–from stockings to buttons, for instance, or from one experiment to another–and never get to the generalization and the concept. They are to be found among scientists as often as among merchants. But I have learned that the mind of the good merchant, as also of the good artist or good scientist, works the way Uncle Henry’s mind worked. It starts out with the most specific, the most concrete, and then reaches for the generalization.”
Who is in charge of the clattering train?
The axles creak and the couplings strain,
and the pace is hot and the points are near,
and sleep hath deadened the driver’s ear,
and the signals flash through the night in vain,
for death is in charge of the clattering train
In his memoirs, Winston Churchill mentions that he thought of this poem, which he had read as a boy, during the appeasement days of the 1930s. I was reminded of it by this post.
The original poem, which appeared in Punch magazine, is here and is pretty good.
Also, here’s the whole issue of Punch in which the poem originally appeared.