Let the market decide. The market guarantees failure. Markets shape profit. Markets form around needs.

When we say the market decides, do we also mean it is correct? Don’t we really just mean we don’t know, so let someone, something, some other process do the work, make the decisions? We are all rational, dumb as stumps, self interested economic agents that together form the genius of crowds. Sounds like the perfect oxymoron. Like a puzzle guaranteed to delude. These pieces don’t fit, because they come from different games. You will never put this together again.

Consider Detroit. The market for cars is a compound market. Cars require two things not supplied by the Car Companies, fuel and credit. Actually, several auto companies provide credit, but to do this they buy money from other commercial services. Those banker (aka Wall Street) guys. They have never managed the main cost, fuel. They never even consider it, nor do you. Typical costs to make a car are 10% labor, 75% materials, the rest goes to the sales, marketing and profit. But given the typical life span of a post 90’s automobile the cost of maintenance is twice the labor cost of building it.

Reconsider Detroit.

They failed to see the market changes.

Yep, they didn’t anticipate the pain of price that occurred this past year. They failed to anticipate the loss of credit that occurred this past quarter. How much money did you make by anticipating these same events? Millions, billions, anything? The genius of Toyota is that they followed their government’s requirements on fuel efficiency. The ignorance of Detroit is that they followed the American Consumer’s desire for big bold metal on wheels. Detroit gave us two couches and an entertainment center so we could feel impressive, affluent. Like a double dipped ice cream cone with four scoops, super-sized sodas and beer by the bucket. Follow the market means you crash in the fog.

It was only last year that business TV commentators were remarking that the market would never need hybrids. It was a government intervention that would have unexpected (meaning bad) consequences. That the market was the only means of discovering need. Too bad that markets work best by rear view mirror. Perhaps the vanity mirror for the little commentators needs better lighting options. Yah, that ought to do it.