Too Big to...Recall

I am going to take a break from watching a movie with Warren Oates in it - he's some sort of soldier and he's very good as usual - to make the observation that our economic system has probably taken a wrong turn when it strives for massive and dinosaurian economic entities.

The banks become too big to fail, at least until that time when they will be allowed to fail - for whatever reason - and die their horrible deaths.

Toyota created the Toyota system of driving costs down, which led to fewer and fewer suppliers; the fewer suppliers were easier to handle and much easier to put the thumb-screws to on costs. However, what has happened is that a problem from the low-diversity supplier gene pool has propagated through the system, like a computer virus, and this is going to cost a pretty penny.

There are no guarantees. If the Toyota system is the economic equivalent of going extinct due to lack of economic diversity, Toyota will disappear - or at least mightily change. No one would have thought of the present state of GM thirty years ago, and the pace is picking up: I think Toyota's critical time of dancing around the meteor crater of extinction will be much less, yea or nay.

Profit maximization has led to enormous companies: if bad things happen, the results are enormous. If you choose the wrong path, you may run to extinction. There will be no more bail-outs, because no one can afford it any more.

Another example is the Wal-Mart paradigm, which results in one enormous store in a community having driven out the diverse Mom and Pop operations. Something goes wrong with Wal-Mart, there is no retail anymore. And I suspect there is something going wrong with Wal-Mart, because I shop at Wal-Mart: there are simple things I cannot buy there, for various reasons. (I mentioned the Cascade dish detergent that won't remove coffee stains, whereas the Cascade from Kroger does.)

When these dinosaurs fail - and fail they will, because they are just too complex for our managerial skills - there will be...

Wait a minute! Why am I telling you this? Stick around for ten years, and you will see for yourself!