GREED MAKES US STUPID
I have just read a report
which talks about house sales being down, as if it were somehow strange. It's not strange. People keep talking about 'the banks not lending'. That may well be so, but it is not the real reason the property market is stagnating. The real reason is because of greed. People are still too greedy to lower their property prices. It's a double edged sword: on the one hand you have prices set unrealistically high, so that sensible people don't want to borrow, and of course the banks don't want to lend that much money either. The prices need to come down. Hopefully in time this will become inevitable.
The above picture is of a couple of shops in Stornoway which I recently enquired about with a view to possible renting. I chose not to rent. Why? Because the rental was far too high. I estimated it was twice what it should be. 'How much?', I hear you ask. £1,000 per month. They are not large shops. They are empty. Of course they're empty. And they will remain empty unless someone with more money than sense comes along. Other premises of similar size in the town are rented for half this figure, and are of course, occupied.
These shops stand as a testimony to why the economy is stagnating. And it is easily summed up in two words: 1) Greed. 2) Stupidity. Put them together and you get a new word: 'greepidity'.
Some time ago I had to travel from Inverness to Edinburgh. The bus fare was about £10.00. I liked the idea of taking the train because it would be more comfortable, so I priced it. It was £42.00. A no-brainer - I took the bus.
Are you getting the picture?
The man's shops are standing empty because he's too greedy to lower his prices even though it means that he'll actually make some money instead of losing it. And for the same reason the trains are swooshing up and down the country with empty seats when they could so easily have paying customers filling them.
The business philosophy of Wal-Mart in America is simple: 'Stack it high, and sell it cheap.'
I wonder if this had anything to do with them becoming the most successful supermarket chain in the world?
Greed makes us stupid.