Steve Jobs: Do Come On
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2011-08-25 08:47 by Karl Denninger
in Editorial , 23 references Ignore this thread
Steve Jobs: Do Come On

This morning I needed to reach for the barf-bag when I flipped on the TV and scanned the headlines of the major papers.  Steve Jobs, CEO of Apple, had stepped down last night, and you had to be Patrick of "Sponge Bob" fame not to know it.

You can give credit to him for being the "driving force" behind Apple becoming an international powerhouse, but let's temper our accolades for this man, shall we?  After all, the facts are what they are:

  • He tried to cheat death.  You can't, of course, but that doesn't stop people with money and influence from trying.  There are allegations that he "cut the line" for a liver.  At the time the excuses were legend - that this would allow him to live out a normal life expectancy, that he was "more deserving" of that liver, that he didn't do anything that someone else with money and power wouldn't, and on and on and on.  Well, we now know it didn't allow him to cheat death, did it? There goes that excuse.  I don't care how much of his own money he blew on drawing more breaths, but I do very much care if that liver could have saved someone else who didn't have cancer and thus wasn't facing a near-certain death sentence.  As for "anyone else with power and money would do that" for an excuse may I request that you look at Cardinal Bernardin of Chicago, who died of pancreatic cancer, before you start pontificating on how it's perfectly fine to use your influence to get what you want - and perhaps cut in front of someone else?  Oh, and for those who have short memories, the Cardinal lost his own father to cancer at the age of six.  If there was a man who had every psychological reason to try to cheat death, it was him.  Say what you will about the Catholic Church; the fact remains that there are those who speak of morality and ethics, and then there are those who walk the talk, even as they step right into the proverbial six-foot hole.  Next time you're in Chicago you might want to stop in the Cathedral and bow to the hat in the rafters.  He deserves the deference; Jobs does not.

  • Apple has produced nothing of actual societal value.  Jobs is not Edison or Einstein, although I heard comparisons to both this morning.  Utter balderdash.  He invented nothing other than a consumer cult that has driven both the abuse of workers in China (Foxconn anyone?) to the point that they attempt suicide by throwing themselves off the building parapets and the acquisition of more more more by Americans (and others) through the use of cheap credit - that is, excessive leverage.  Worse, the company embarked on an intentional act of exploiting that consumer cult through the embedding of non-replaceable consumables inside their products (specifically, batteries) which is nothing more than an attempt to guarantee repeat sales for products through intentionally destroying their economic value.  I attack banks all the time for having done this with explodo-mortgages that effectively forced you to come back for a refinance in two years and I reserve the same disdain for corporations that do this with their so-called "consumer products."  Embedding a component in a non-replaceable fashion that has a known 500-cycle approximate lifetime when each "cycle" is typically one day for the average user essentially embeds in the device a two-year ticking time bomb, exactly as did an "explodo mortgage."  That consumers are starry-eyed and willfully put up with that crap doesn't change what was done - or why.  Would you buy a car that had an engine that intentionally self-destructed at 100,000 miles?  Then why did you buy an iPhone or one of the "ultra nice" iMacs that has a non-replaceable battery in it that will wear out, on average, in a couple of years?  Aren't you in fact a few points short in the IQ department doing the latter, when it's exactly the same as doing the former?

  • Apple's profits have been garnered through the use of wage and environmental arbitrage. Instead of choosing to do good and build those iPhones and iMacs here in the United States with US workers earning a living wage, Apple offshored everything they could.  Apple, as with most other large multinational corporations, uses every advantage it can get in the world marketplace.  Is this a bad thing?  Not necessarily.  We set the conditions of the game and they play it.  But their willingness to exploit those rules makes them no better than any other firm that does so, and thus puts the lie to any claim that they're anything other than a money-grubbing bunch of bastards, just like every other company that does the same thing.  Will I lionize someone who leads a corporation in this fashion?  NEVER.  Wage and environmental arbitrage is an outrage, not a societal good.

  • Stock price is a poor measure of lasting economic value and worthless in terms of societal value.  I can point to dozens - if not hundreds - of companies that allegedly had "great" CEOs during the last many years.  How many of those firms during the 1990s had soaring stock prices only to blow up and then waft away as dust in the wind?  How many more examples did we see in 2008-09?  I am singularly-unimpressed with claims that focus on the alleged market cap of corporations.  Show me durable value in the form of actual innovation - not the building of a consumer cult - and I might provide at least a nod of acknowledgment.  Remember that Jordache jeans were all the rage some years ago, and yet were they ever anything more than a pair of pants?  Nope.  Neither is the iPhoney and iFeminineProduct.

I'm sure I'll get plenty of hate mail for this column; that's fine.  The fact remains that there's nothing to lionize here.  Jobs is just a man who managed to create a consumer cult and he got rich doing it.  So what?  He was neither the first in doing so nor will he be the last.

Look for real leaders who make a difference in society.  Becoming rich on the backs of slave laborers in China while stuffing planned self-destructing devices in your products to spur repeat sales and building a consumer cult around your products doesn't make you great. 

It just means you're good at talking people into spending money they don't have and putting forth labor for less than what they should be charging you.  Neither is a particularly-laudable achievement.