The Wonders of Blunders
Why I follow business failures, and why you should, too
“It’s fine to celebrate success but it is more important to heed the lessons of failure.” - Bill Gates.
I wrote my last column for The Wall Street Journal ten years ago.
I’d been writing about blunders, including the 2008 financial collapse and the ensuing bailouts, for many years, and some readers had complained that I appeared anti-business and even a tad hateful of our fine capitalist system.
Here was my published reply:
“All my articles are pro-business. I love capitalism. I want the economy and our corporate system to run well. I admire entrepreneurs and seek free enterprise for all. Unfortunately, some things stand in the way, including tyrants, idiots and ideologies.
“If music critics pan a symphony, do you think it's because they don't like music? When sportswriters rip on a coach, do you think it's because they are anti-sports? Why do some people love pointing out flaws in Big Government, but loathe those who point out the shortcomings of Big Business? Business deserves the same journalistic treatment as every other endeavor, from investigative reporting to commentary.
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And don’t miss these blunders.
The ‘anti-business editor’
There was a talk-radio-show host in Denver named Mike Rosen who frequently called me the “anti-business editor” on his shows in the 2000s. At the time, I was writing about failing companies like Enron, WorldCom and Qwest and he thought I should be striking a more positive tone as the business editor of the Denver Post.
Eventually, I ended up breaking a story about how Rosen lost a big chunk of his life savings to a Bernie Madoff feeder fund. He’d sucked former Republican Congressman Tom Tancredo into the scheme and he’d shamelessly advertised it to his listeners.
It turned out that while Rosen was calling me the anti-business editor, he was shilling for an investment firm that gathered funds for one of history’s biggest Ponzi schemes.
Still, I think I would have been more successful as a business columnist if I had participated in the unbridled optimism bias that pervades the business world – telling people what they want to hear.
Most business readers want to know what stocks they should buy, how they can get rich, and what wonderful CEO or magnificent entrepreneur they should venerate.
These themes dominate business news coverage to this day, and the stories are rife with exaggerations, if not outright lies, that can lead readers to misguided strategies and hefty losses.
To me, journalism is about highlighting what is wrong, what is failing, and who is ripping people off – so that tragedies can be averted and problems can be solved. I was never much interested in economic cheerleading or stumping for some corporate narcissist out to rule the world. It’s just not the way my brain works.
I personally find it hilarious when the smartest guys in the room turn out to be dunderheads. And I love cracking jokes when business leaders who have had every advantage in life – from Ivy League educations to summer homes in the Hamptons – are reduced to lyng, cheating, stealing and exploiting the vulnerable. It’s just so low class.
I also believe that people are better prepared as investors, business owners and employees when they know the score. This is why I persist with Business Blunders. (You can read more about my new publication by clicking here.)
My parting thoughts at the WSJ
I closed my 2014 WSJ column with a list of observations that remain salient today, and will remain true 10 years from now:
Wherever there's money, there's someone trying to steal it.
There are bad leaders in business, just as there are bad leaders in government.
Nothing grows forever. Why should anyone believe economic thinkers who pretend the economy should?
Consumption isn't a virtue to be left unchecked.
Corporations wield more power than individuals.
Cheerleading and boosterism aren't good journalism or good business.
Businesses externalize costs. They consume. They pollute. They exploit. You aren't a flaming liberal if you weigh costs versus benefits and make wise choices.
Bad ideas, and poorly managed businesses, should be allowed to fail.
Crime should be punished irrespective of the wealth of the perpetrators.
The free market doesn't work without referees. There are many bad laws, but wise regulation is critical.
No one can predict the future.
Most investors would do better in index funds rather than pay a so-called expert to manage their money. Most of the investment industry is simply unnecessary.
Some stock traders know how to game others—through technology, insider information and secret handshakes.
There's a difference between positive thinking and misplaced optimism.
There really is a sucker born every minute. Don't be one.
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I always look forward to your posts. It helps me keep my head on straight and understand so much more about the people and world around me!
Keep going, Al...The truth is sometimes had to swallow!