The Downfall of Sears
It Didn’t Have to End Like This: The Downfall of Sears
Sears and Kmart lose while a CEO that never put skin in the game, wins.
British priest and writer Giles Fraser wrote in March 2019 about Nassim Taleb’s book, Skin in the Game. The book looks at various people in recent history and how they did or didn’t risk anything in life. Taleb curses Wall Street’s role in the 2008 financial crisis. They took risks while someone else paid the price.
Taleb excoriates those in the financial markets who trade with other people’s money, making huge profits if they succeed, and being bailed out by the tax payer if they fail. That, of course, was what happened in the financial crash of 2008. It showed that for those banks that were ‘too big to fail’, profits were privatised and losses were socialised. The villain of Taleb’s story is Bob Rubin, a man who received $120 million in compensation from Citigroup before the crash, and yet, when the bank was made insolvent, suffered absolutely no consequence for the decisions he made that led to the company’s downfall. Rubin had no skin in the game.
Capitalism, when it’s working well, should be about risk. Companies try different strategies to sell their widgets and become profitable. But of course, there are those that…
