Countrywide, Success Stories, and the How Much More Efficient the Private Sector is than the Public Sector

One of the reasons I don’t buy the argument that the private sector is more efficient than the public sector (and I don’t buy the reverse argument either – I think both are equally inefficient) is that there seems to be ample evidence that most companies don’t know what they’re doing. If they’re successful for a while, they don’t necessarily.

Consider this story:

An Associated Press analysis of new census data provides insight into the reasons for the slumping housing market: Since 1990, homeowners have faced a growing gap between their incomes and the price of their homes.

The widening gap in all but a handful of the nation’s 500 largest cities helped make the recent boom in housing prices unsustainable, according to analysts. The rising prices were fueled largely by low interest rates and risky borrowing, rather than increasing incomes.

…

Nationally, the median household income grew by about 60 percent from 1990 to 2006, roughly matching inflation. At the same time, the median home value — the point at which half were more and half were less — more than doubled, to $185,200.

Now, whoda thunk that home prices can’t continuously rise faster than the wages of people who buy homes? Clearly not Countrywide and a host of other companies that as little as two months ago would have been considered quite successful by Wall Street Standards (i.e., by very, very highly paid Wall Street analysts). If your typical right wing person thought of companies like Countrywide at all before two months ago, odds are they had such companies labeled as a “success story” in their minds.