Same reason as Quora

I enjoy reading Wolf Richter’s blog for the same reason I enjoy Quora: stories of real-life experience.

Wolf’s articles have great graphs, but Wolf’s blind spots interfere with the enjoyment. Some of Wolf’s commenters tell experience-based stories about the subject at hand. Today’s article deals with the collapse of Starfuckitis or whatever it’s called, the inevitable endpoint of Chrysler’s Share Value conglomerations.

One commenter told a family story showing that Chrysler’s departure from real business started in the ’80s, along with everything else.

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My grandfather’s company had sold Chrysler some custom material handling equipment used in their factories on the production line. In todays dollars, probably 2-3 million bucks, so a big chunk of change for the small family business. Most of that work was generally funded by a revolving line of credit. Labor and metal are expensive.

They strung out payment for many months to the point that my grandfather went in person to meet with whoever would listen up at headquarters. He said to the payables admin “You don’t understand…your JOB is to pay me”. The admin replied “No, you don’t understand. My job is actually to NOT pay you”.

Eventually payment was made after a long battle, but he swore to never sell them anything again, as the whole process turned what seemed like decent work into a loss-making endeavor. My understanding is that Chrysler’s turnaround plan was largely based on screwing suppliers as hard as possible. Works in the short term, but burns bridges in the long run.

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Amazon and Walmart and “health” insurers have tremendous Share Value because they also screw suppliers as hard as possible. Their job is actually to NOT pay taxes and suppliers and patients.

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Later for fairness, I was too hard on Wolf. He’s one of the FEW economics writers who recognizes that higher interest rates are NORMAL and HEALTHY. Everyone else, “left” and “right”, believes that ZIRP is healthy and normal, and anything above perfect 0.00000 on savings is a CRIME. Wolf gets pissed at commenters who dislike EVs or Frisco. As long as you avoid those two subjects, all is fine.