> Something is really off and everyone is telling similar stories about broken processes.
There are people out there who are pretty conflict-avoidant by nature, and any group tends to pretty significant levels of cohesion because of it. There are some classic stories out there about when it goes particularly bad and spirals into a bad case of groupthink.
In the economy there are supposed to be some slightly cruel feedback mechanisms where companies (effectively big groups) that get off track are defunded and their resources reallocated to someone more competent. The west has been on a campaign to disable all those feedback mechanisms and let companies just keep trudging on. We've pretty much disabled recessions by this point. A bunch of known-incompetent management teams have been bailed out so they can just keep plodding along destroying value. There is not so much advantage in being honest about competence in this environment, if anything it is a bad thing because it makes it harder to take bailout money with a straight face.
I cite the Silicon Valley Bank collapse as an interesting case study. A looot of companies should have gone bust with that one because they were imprudent with their money. They didn't.
I think one issue that exacerbates this is concentration of wealth. This has created such a demand for financial assets that their price is ridiculous, no matter how bad the management of those companies is.
It's basically the other way around. The companies that are enabled to grow without bound are the cause of concentration of wealth, not the result of it. Who are the billionaires? The early shareholders in megacorps.
You can agree with whatever you like. But if your stance is people should be able to just give money to whoever and it all works out in the end then you aren't supporting an environment where management are honest, because they are being supported in being wilfully blind.
They're managing capital. If they get bailed out because they turned out to be completely irresponsible in managing their capital then nobody can claim to be surprised that management tend not to be of the highest standard on any axis.
What is supposed to be the incentive here for appointing competent managers for most companies? It literally doesn't matter. Even company-bankrupting performance will turn a profit once the effects of money printing are factored in.
Managing capital is a vital part of any business but a small team of 5 does not have the same resources or requirements as a team of 500 or 5000.
SVB has been a vital supporter of startups for decades. Why would a resource constrained startup spend time worried about it? Money goes in and out the bank, great, that’s all most startups should need to worry about.
If you support a culture where people look at $250,000 and don't care what happens to it, then I hope you aren't surprised when it turns out the management class are serially incompetent. Their literal responsibility is to look at large amounts of capital and decide what happens to it.
The startups had a strategy of pooling their money - their huge amount of money, as it turns out - into a fund run by people who couldn't keep a bank solvent. If you want to shield the people doing that from consequences then, frankly, you don't have an interest in running a high-integrity system geared to competence. Because there need to be direct and painful consequences to an action that stupid. Oh there are only 5 of them! Well there is only 1 of me and I can tell you how dumb they were in isolation. The only reason to act this way and keep all the eggs in one high-risk basket is because of an assumption that the government will come in and conduct bailouts if any risk eventuates. IE, a management class that doesn't ever expect to succeed on their own merits. Although since the bailouts did happen that suggests that sticking to a dumb strategy is what winners should do.
The entire capital management system here is out of control.
There are people out there who are pretty conflict-avoidant by nature, and any group tends to pretty significant levels of cohesion because of it. There are some classic stories out there about when it goes particularly bad and spirals into a bad case of groupthink.
In the economy there are supposed to be some slightly cruel feedback mechanisms where companies (effectively big groups) that get off track are defunded and their resources reallocated to someone more competent. The west has been on a campaign to disable all those feedback mechanisms and let companies just keep trudging on. We've pretty much disabled recessions by this point. A bunch of known-incompetent management teams have been bailed out so they can just keep plodding along destroying value. There is not so much advantage in being honest about competence in this environment, if anything it is a bad thing because it makes it harder to take bailout money with a straight face.
I cite the Silicon Valley Bank collapse as an interesting case study. A looot of companies should have gone bust with that one because they were imprudent with their money. They didn't.