(^34) Best columns: Business
“My decades of pride in McKinsey evaporated” as
I read of the consulting giant’s $574 million settle-
ment this month for its role in the opioid crisis, said
Tom Peters. The McKinsey I served, from 1974 to
1981, was focused on strategy, and not enough on
people, but it was an honorable institution. I don’t
want to sound “holier than thou.” I have “known
and worked with two people who did time in federal
prison. Both were from McKinsey”: Enron’s Jeff
Skilling and Rajat Gupta, who served time for insider
trading. But the problems at my old employer are
now clearly deep-seated. McKinsey is “loaded with
high-IQ MBAs addicted to spreadsheets and Power-
Point presentations,” tasked solely with improving
market share and profitability. Taken too far, this
combination is “poisonous.” McKinsey advised the
OxyContin maker Purdue Pharma to offer rebates to
pharmacies based on the number of people who died
or became addicted to painkillers. “One presentation
calculated that if Purdue paid $14,810 per ‘event,’
and 2,484 customers of the CVS pharmacy chain
overdosed or became addicted in 2019, Purdue would
pay CVS $36.8 million that year.” That’s an extreme
abandonment of moral responsibility. “Disregard for
higher societal purposes is nothing new, but for me,
the McKinsey- Purdue affair represents a new low.”
How did online shopping get so competitive? asked
Casey Taylor. Early in the pandemic, the most popu-
lar toy for parents with young kids was the Nugget
couch, which has foam blocks that can be formed
into “fort-like designs.” Unfortunately, each new
batch sold out within minutes, forcing parents to pay
twice the retail price on aftermarket platforms such
as Facebook Marketplace to resellers who used soft-
ware to get first dibs. Years ago, programmers “with
an affinity for rare Nikes” started to create “product-
monitor bots” that could automatically scan sneaker
websites for coveted new product “drops.” Such bots
can fill out buying forms in milliseconds, “allowing
for accounts to purchase multiple pairs of shoes”
faster than humanly possible. New sites, such as
StockX, also made reselling them easier. Now these
computer-aided buyers have started expanding “into
other categories with manufactured scarcity and cult
followings,” be it the PlayStation 5 or foam blocks.
A September drop of Nvidia’s coveted RTX 3080
“was raided by resellers,” who snatched up the $699
graphics cards and turned them around “for an aver-
age sale of nearly $1,200 on StockX.” Retailers are
fighting back with methods such as “blacklisting IP
addresses with known bot activity.” But the resellers
just see each countermove “as a new challenge.” Re
ute
rs
The fall
of the house
of McKinsey
Tom Peters
Financial Times
The bots are
winning the
shopping war
Casey Taylor
Vox.com
The frenzy over Bitcoin brought the
world’s total value of the digital currency
to $877 billion last week, and major fi-
nancial institutions have taken notice, said
Robin Wigglesworth and Eva Szalay in the
Financial Times. The decentralized cur-
rency, ‘mined’ through “an energy- intensive
network of computers,” has gained wildly
diverse adherents, from hedge funds to
banks to the actress Lindsay Lohan. Tesla
spent $1.5 billion of its cash reserves on
Bitcoin and said it would soon start ac-
cepting it as payment for its vehicles. That
inspired a flurry of digital currency– related announcements from
other companies, including MasterCard. This week, the price of
a single Bitcoin (which can be divided into fractional payments)
soared to $50,000. Believers say that Bitcoin offers “protection
against currency debasement or authoritarianism” and could
replace the role gold played in previous eras. But we’ve seen this
pattern before. Bitcoin enjoyed “a similarly wild upswing in 2017,
only to subsequently plummet 80 percent from its peak.” Many
of the current bulls may be following the credo of George Soros,
who once said, “When I see a bubble forming, I rush in to buy.”
The ideology of competing currencies actually has a “rich histori-
cal tradition that includes such luminaries as F.A. Hayek, Milton
Friedman and Ludwig von Mises,” said Max Raskin in The Wall
Street Journal. The long-term value of Bitcoin will be determined
not by speculators but by true believers who keep an eye “on
new applications and technological developments as well as daily
price swings.” Digital currency enables powerful real applications,
“such as smart contracts, which automate and authenticate com-
plex payment arrangements.” The peo-
ple who’ve stuck with Bitcoin are those
“genuinely dedicated to the ideal of pri-
vate money and competing currencies.”
Some of those early advocates are now
billionaires, because “Bitcoin may be the
best- performing investment of all time,”
said Nir Kaissar in Bloomberg.com.
A $100 bet on Bitcoin on day one, or
even close to it, would be worth nearly
$80 million. The trouble is that Bitcoin’s
wild swings “don’t make it easy to hold
on,” so “investors who were in and out
had as much opportunity to lose a fortune as make one.”
There’s a reason people talk about investing in Bitcoin, not spend-
ing it, said Nouriel Roubini in the Financial Times: “The Flint-
stones had a more sophisticated monetary system.” Their shells
were a more practical store of value. For Bitcoin, “currency” is
a misnomer; even a conference about Bitcoin refused to take it
as payment. Its future is “only as a speculative asset bubble.” At
least the Dutch tulips of the 1600s had some utility, as flowers.
Bitcoin’s ascent is fueling a surge in even stranger digital assets,
said Robert Hackett in Fortune.com. Take Dogecoin. Doge was
intended as a joke, and most investors don’t realize that “10,000
new ‘Dogecoins’ are programmed to be issued every minute for
the rest of eternity, all but ensuring the debasement of their value
over time.” But the ubiquitous Elon Musk has been “singing its
praises” on Twitter, and the rapper Snoop Dogg “recently re-
branded himself, in jest, as ‘Snoop Doge.’” The result: It went up
in value by 1,600 percent, with only a few “spoilsports” griping
that it might pop and give all digital currencies a bad name.
Bitcoin: Bubble or breakthrough?
Crashing past the $50,000 mark
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