
Profit Maximization V. Survival Maximization - nickb
http://www.techcrunch.com/2008/10/11/profit-maximization-v-survival-maximization/
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nostrademons
> The criticism is coming from people who don’t understand that the world has
> changed in the last week and that companies need to change with it.

That's exactly the sort of hyperbole that people get pissed off about.

The world has not changed in the last two weeks. The only things that have
changed are the financial markets and the news ticker. I guess if that's your
whole world, then the world has changed. But for normal people who look at the
world around them, the world is basically the same as it was 6 months ago.

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startingup
I have to disagree: the world has changed. It is not merely a financial
crisis. It is a fundamental economic crisis. The last two weeks brought the
crisis to full focus, but we have been building up to it for several years.

Here are a few things that happened in the last 10-20 years that have brought
us to this point:

1\. Debt became fashionable, even prestigious, world-wide. The most storied
names in business became debtaholics. This includes the financial players like
Goldman Sachs and Morgan Stanley, but industrial-companies-that-became-
financial-companies, like GM, Ford, GE and so on. This level of comfort with
debt is unprecedented in history, and the historical parallels are dark.

2\. The most prestigious nation on earth piled on debt, and other nations
copied.

3\. US savings rate dropped from 10% in the mid 80s to near zero today, and it
even went negative for a period.

History teaches us that such toxic debt episodes are followed by a prolonged
hang-over, followed by a social aversion to debt and eventual recovery. The
patient has just passed out - the hanger over hasn't even started. It is way
too soon to talk about a recovery.

So it is very appropriate to be very concerned and fearful for our collective
futures. What can we do as individuals? Swear off debt, live very frugally,
lower our expectations.

To paraphrase, just because a lot of people are panicking doesn't mean we
shouldn't be really afraid!

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fallentimes
1\. World wide? What source are you referencing? The States sure, but I have
no idea about the rest of the world and have never read anything talking about
world wide debt rates.

2\. See number 1.

3\. The saving rate statistics are misleading because they don't include 401k
and IRAs, which were not nearly as popular 10-20 years ago as they are today.

