[Nesster]

Nearsighted Accountants Found to be Corporate Parasites and the Real Cause why Our Jobs are Screwed! ... interesting article, this, one that I feel has a lot of true in it
Bob Burnett: Who Killed the Economy? Accounting Parasites

In FORBES magazine, management consultant Steve Denning noted that DELL Computer, because of nearsighted financial advice, gave itself away to its Taiwanese supplier:

ASUSTeK came to Dell with an interesting value proposition: 'We've been doing a good job making [circuit] boards. Why don't you let us make the motherboard for you?' ... Dell accepted the proposal because from a perspective of making money, it made sense: Dell's revenues were unaffected and its profits improved significantly... ASUSTeK took over the motherboard, the assembly of the computer, the management of the supply chain and the design of the computer. In each case Dell accepted the proposal because from a perspective of making money, it made sense: Dell's revenues were unaffected and its profits improved significantly. However, the next time ASUSTeK came back, it wasn't to talk to Dell. It was to talk to Best Buy and other retailers to tell them that they could offer them their own brand or any brand PC for 20% lower cost

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Like most American corporate accountants, DELL's financial people had a simplistic, narrow objective: do whatever would improve the current quarter's bottom line. Because accountants don't have a strategic perspective, DELL's number crunchers didn't realize the cumulative debilitating impact of the ASUSTeK transactions. Denning observed, "Decades of outsourcing manufacturing have left U.S. industry without the means to invent the next generation of high-tech products that are key to rebuilding its economy." Parasitic accountants have neutered our entrepreneurs.

But it's not only high-tech companies that are infected by these parasites; American corporations from all sectors have been hypnotized by the promise of short-term profits. It's the conventional "wisdom" that accountants and executives are taught in business school. This dysfunctional perspective is reinforced by contemporary corporate monoculture where employees live in a bubble, log obscene hours, and vacation with their co-workers. As a consequence giant corporations are dogmatically insular with their own warped code of ethics and worldview.

Corporate accountants' dogmatic focus on profitability drives out humanity. There is no room for entrepreneurial creativity, much less the wellbeing of the larger community or the "common good."

This parasitic perspective caused commercial lenders to issue sub-prime mortgages beginning in the late nineties and continuing until the housing credit bubble burst in 2007. In 2005 the majority of housing loans made by lenders such as Countrywide Financial and Washington Mutual were "interest only" back by little or no documentation -- so called NINJA loans. Accountants advised financial-industry executives they could improve profitability by selling sub-prime (adjustable rate) mortgages and bundling them into mortgage-backed securities. Later the same parasites told executives they could further improve profitability by decreasing the loan documentation requirements.

In one industry after another we find examples where nearsighted pursuit of profits has trumped common sense and devastated the common good. Most California private timberland is owned by Sierra Pacific Industries that advocates clearcutting where all trees in a given area are cut down, the valuable timber hauled away, the residue burned, and the ground scraped bare and sprayed with herbicides. This process makes more money for SIERRA PACIFIC but it passes on environmental damage to the public and drastically diminishes the amount and quality of the watershed.

Most public utilities have a similar narrow focus on profits at the expense of the common good. For example, TECO Energy operates the massively polluting Big Bend power plant in Apollo Beach, Florida, because it has low operating costs due to its construction before modern standards for pollution control.

The advent of accounting parasites is the ultimate triumph of the nerd: hundreds of thousands of corporate finance people who care more about numbers than they do humanity. A culture of parasites who think nothing of firing workers, or stripping them of their benefits, in the name of profitability,

Accounting parasites have neutered our entrepreneurs, sucked the humanity out of corporate culture and ruined the economy. They don't understand that the U.S. consumer economy will not function properly unless there is full employment.

Fixing the U.S. economy doesn't mean replacing capitalism with socialism -- that would bring another set of equally dire problems. The solution first requires taking parasitic accountants out of the corporate driver seat and replacing them with entrepreneurs -- like the late Steve Jobs. And second, replacing the current corporate ethics and the relentless emphasis on profitability, with values that consider both workers and the environment; an ethical system that recognizes the American economy won't function unless we all have a stake in it.

[jsherman999]

Interesting article, fascinating viewpoint.

...Fixing the U.S. economy doesn't mean replacing capitalism with socialism -- that would bring another set of equally dire problems. The solution first requires taking parasitic accountants out of the corporate driver seat and replacing them with entrepreneurs -- like the late Steve Jobs. And second, replacing the current corporate ethics and the relentless emphasis on profitability, with values that consider both workers and the environment; an ethical system that recognizes the American economy won't function unless we all have a stake in it.

Problem with the above is, accountants are a dime a dozen and easy to find. Talented entrepenuers - not so much.

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[Nesster]

The car mags always blamed the 'bean counters' for the troubles US car makers got into, the 'car guys' didn't get to make the cars we deserved

[GeneV]

Focus on profitability 10 years out would help, too.

[jsherman999]

Focus on profitability 10 years out would help, too.

Yep.

Interestingly I think we may have an applicable example here:







Pentax focused on the 18-month plan for a couple decades, and ended up at the bottom of that chart.

It costs too much money to move off m42, lets wait. It costs too much to introduce autofocus, let's wait. It costs too much to offer full frame, let's wait...

I suspect Ricoh is more interested in the 10 year plan for interchangible lens cameras than Pentax-standalone could be, or Hoya wanted to be.


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[boriscleto]

The article also neatly ignores the fact that it was Steve Jobs who invited the MBA bean counters in. They had to prove to Wall Street that they were a grown up company before the IPO. It was only after they had nearly killed the company that he, almost by accident, returned to the company and saved it.

And as far as his talent goes, he had several opportunities to kill Apple. It was Wozniak convincing Jobs that the Apple II had to have 8 slots instead of 2 and the Mac team slipping in the ability to boost the RAM to 512K that made him a genius. The Apple III is forgotten by everyone but hard core Apple geeks, and the Lisa is best left mostly unremembered.

That he was able to con George Lucas out of Pixar for $5 million shows his real genius. To be fair GL was having some cash flow problems (messy divorce & Howard the Duck).

[Wheatfield]

Fixing the U.S. economy doesn't mean replacing capitalism with socialism -- that would bring another set of equally dire problems. The solution first requires taking parasitic accountants out of the corporate driver seat and replacing them with entrepreneurs -- like the late Steve Jobs. And second, replacing the current corporate ethics and the relentless emphasis on profitability, with values that consider both workers and the environment; an ethical system that recognizes the American economy won't function unless we all have a stake in it.

Steve Jobs? You mean the guy who built his gadgets in the far east?

[boriscleto]

Steve Jobs? You mean the guy who built his gadgets in the far east?

Was it his fault that all the companies that make the components that make up those gadgets are in the far east?

[Ratmagiclady]

Yep.


Pentax focused on the 18-month plan for a couple decades, and ended up at the bottom of that chart.

It costs too much money to move off m42, lets wait. It costs too much to introduce autofocus, let's wait. It costs too much to offer full frame, let's wait...

I suspect Ricoh is more interested in the 10 year plan for interchangible lens cameras than Pentax-standalone could be, or Hoya wanted to be.


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That chart measures *marketshare,* not 'Profitability.' Or 'Being Worth Dealing With.' ...People seem to mix that up a lot.


People act like being smaller and solid is actually somehow a *bad* thing.


That's a market share chart. Who cares how much more volume you're doing, if you can make a good living, and a good product?

Speaking of accountancy being a parasite on all this: they talk about 'Who's biggest' and then to everyone who's not biggest, they say, if they (we) want to do something good, 'Wait, wait, wait, wait, wait, wait, wait... Now Hurryhurryhurryhurryhurryup! Oh, you couldn't suddenly outperform multinationals? You must be such a 'loser.'"

I don't *give* a crap how Pentax 'compares' for marketshare. Put what I need. In my hands. For what I can pay. I don't care if they do it outta Gramma's basement.


Seriously, do you think I try to shoestring together 'RML Enterprises' on ... well, nothing but some gear at this point (That I hopefully won't have to sell... in a worse market than I scavenged it from in the first place..... ) and think being smaller than Magnum or Bachrach is my big problem? Buy some stock, and we'll talk, maybe. But even then.

Let's put it very simply. There's *no* way I will look good compared to some big corporations. Can I potentially turn a profit on milk money, by providing some things some people might like? Gods, I hope so. Or else some parasitic beancounters have some explaining to do. Tormenting serfs like that. Tsk. You know? If we're going to be all feudal, how bout a little o the old noblesse oblige?

[Steinback]

I can't recall who gave it put I once sat through a presentation (by either a business professor or an engineering professor) who suggested quite seriously that the North American auto companies would be best to outsource and offshore all design and manufacturing and just stick to selling the finished product. I don't think he addressed what would happen when the suppliers decided to compete head to head with their former clients.

[shooz]

I can't remember exactly when, but Ford once suggested that they would outsource all manufacturing, but wanted to keep the design house.
The idea was they would profit on the license of the name.
Gosh----------wouldn't that group of large investors be among the "job creators"?

The main and most profitable reason to build overseas are the lax shell corporation laws.
These shell corporations are used to fix constantly higher prices . It's that simple.
Inflation feeds profits.

Apple got caught doing this in the Caymans, paid a small fine, yet prices never came down.
Why do you think that is?
It's the accounting parasites that cook the books, but they are under orders to do so.

[Nesster]

... let me see... remember when Pentax was a Honeywell or a Tower, Canon a Bell & Howell etc? The Japanese camera makers needed a US front marketing company early on, but soon enough they felt the need to cut out the middle man.

[Ratmagiclady]

... let me see... remember when Pentax was a Honeywell or a Tower, Canon a Bell & Howell etc? The Japanese camera makers needed a US front marketing company early on, but soon enough they felt the need to cut out the middle man.

That would be a problem, yeah, but there was also the matter of *parts and service,* and that was a bit more than a front, more like the TV repair chains. There was actual infrastructure there and all... Actually with Canon the Bell&Howell branded ones are quite rare, comparatively, I think in Canon's case, they only sold a very few and a limited range of models...basic ones, if I recall, like TL's and TXes, under the Bell&Howell nameplate, but many of them came with stickers inside saying that Bell&Howell serviced and guaranteed some of them. (Let me see if I can see one in an un-loaded FT or something. *rummage* Yep. Here's one: Says 'Sold, Serviced, and Guaranteed in USA&Canada by Bell&Howell.' )


Not sure how that applies to the business analogy/precedent, but, *sigh* I do love these old models.

[shooz]

Where is the "right wing", or teabagger, or conservative, or libertarian defense of questionable accounting?
We all know it's been going on for decades.
At least those of us who've been paying attention.

Must be alright, as long as they only rip off John Q public.