|Re: Automotive news day!|
The economy under my opinion, has failed because of Greed.
My wife and I comment about a company's ability to build an office building as an example.
Say you have the income and potential to buy an office building to house your employees and business activities.
instead of buying something that maintains your size and some minor future growth. you buy something 10x as big and rent out space to other companies as an investment.
The other tenants pay you rent to cover the additional expenses. and you take a loan out for the additional money to construct this megastructure.
Jobs are created to build it. jobs are created to fill the building with office workers, and the economy runs just fine!
When the economy fails. offices rented now are empty. and the company that supported those other companies now starts paying the bills, and profits are not becomming mortgage payments because
the people who originally paid for your mega-structure are all gone. so you're company has to foot the bill.
When your company finally collapses under it's own weight. there's an abandoned building left. with no company. and thousands of jobs lost. and everyone who worked there is clambering for new jobs elsewhere. and probably won't find them.
This example is based on "GREED" .. You're company should have maintained a conservative vision of how large to build that building, so you would never have to adjust your profits to have to pay for a mega-structure that your company could never support with income in a general recession.
People argue. "but there's no way to see that!!!"
The probability of real estate markets collapsing under "bubble" conditions were predicted 10 years PRIOR to the actual events that you are living in NOW. the concept of failure is IGNORED by everyone who feels they are Successful, it's just ignorance and greed that causes this.