Short-termism is a Threat to Sustainability

Short-termism is a Threat to Sustainability

Eng. Daniel Javier

It is a temptation to write about Trump because daily he is full of surprises and not always in a good way.

Trump is a representation of a type of American businessman that is accustomed to scandalous bonus payments based on the effects of Short-termism. As the description proves, this strategy is focused on short term results, with little consideration of risks or long-term effects.

In many cases, the new American executive spends a minimum amount of time at each Company, more worried with the development of their personal career than the future of their business. They are eager to add their achievements to their Resumes, typically out of context, improving their positions and salaries in new business ventures where they repeat their standard modus operandi. “In one year, I achieved this or that” may sound impressive, but we all know there are long term effects which are not considered.

In 2008, after the USA crisis, the government had to bail out a number of troubled privately held companies (Banks, manufacturers, etc), and intervene to control the payment of salaries and executive bonuses. In many cases, the bailed-out Companies apparently did not care to change their behavior, as they were more focused on short term results. So, when the problems appeared, the bailout on the part of the state was welcomed at the expense of the taxpayer.

Unfortunately, after Obama’s efforts to change the systematic effects of Short-termism, the new government is going in the opposite direction.

Democracy, which is the best system that we have achieved to date, with its many defects, favors a similar Short-termism attitude. The current government has four or five years to show demonstrable results and if they do not, the people will punish them with votes.

Sadly, the most unscrupulous individuals govern without concern for the state of the country that in many ways is indebted, without investment, etc, but with more populist results. The subsequent government finds itself in crisis mode, and must assume the political cost with adjustments and austerities – very unpopular views. Despite a logical and coherent approach to the situation, the later ends up losing in the next election with those who are the true culprits.

So, Trump was chosen by a neglected group of Americans who, and it is logical to conclude this fact, felt that their government should provide answers to their questions, before they start thinking of ways to solve the problems of others.

Trump’s international strategy, from his point of hostile capitalism, where the one in a position of power dictates terms, is therefore absolutely reasonable. He will renegotiate all trade deals with advantageous conditions for the USA, forcing the Companies to manufacture in the USA and use national skilled laborers, stop immigration, except for those useful to the objectives of his government, and will pollute whatever is necessary to provide jobs and generate wealth for the USA. These short-term results will be displayed which (If he avoids future foolish actions on other subjects), may conquer the votes in the next election.

Trump rules for the USA and cares little about other matters, at least he is transparent in this fact. It is a shame because the power of the president of the USA should induce a sense of responsibility (which naturally comes with power), with the globalized world and shared commitment for the future.

Trump, with his capitalist logic and populist view, believed that on a short-term basis he could improve the situation of the workers in the USA, even as entrepreneurs and everyone else pays the price… the Mexicans would pay for the wall and the rest of us would pay for the environmental disaster and other social costs.

Short-termism is a threat to sustainability

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