Why Things Go Wrong or the Peter Principle Revisited by Lawrence J. Peter

I was recently promoted. I guess I should feel that this means my employer has confidence in my ability or that it offers positive feedback on something or other and stuff…but no. It has only amplified my uncertainty and insecurity. I’m clearly out of my depth but I’m in uncharted waters. People leave their comfort zone all the time. Sometimes it goes really badly. The rest of the time they manage to hide how badly it goes.

To help me laugh about this I am reading about The Peter Principle. The concept is simple. If you are good at a job you will soon be promoted away from that job. You will quickly move from something you are good at to something you are not good at…and never will be. That, I think, summarizes the concept well enough and it is something I have always been aware of, Dad read this book when I was very young. So I picked up Why Things Go Wrong for a penny on Amazon and have laughed at myself ever since.

But I’m not just laughing at myself. The book is short. It could be a pamphlet if it weren’t stuffed (padded?) with page after page of historical examples of people promoted into ruin. You say and do silly things when you are in this position.

The ad in the real estate section of a San Fernando Valley newspaper read, “Luxury Homes Everyone Can Afford. For Complete Details, Call Repossession Department.”

Early on he lays out what this means to humanity and how we should handle it. We should have a plan in place to get rid of incompetent employees….or incompetent presidents. He suggests when you have a competent person at the top who recognizes an error, but for whatever reason can’t demote or fire the employee there is an escape clause. Have you ever wondered why there are so many vice presidents in corporations? Demotion by way of promotion. He suggests when we realize our president is incompetent we should promote him away from real responsibility and, instead, let the him host dinners and parties and play golf and pose for pictures. Wait a minute…

So let’s cut to the quick. When should an employee stop accepting promotion? He gets to the point on page 12.

During my preceding twenty-eight years in education I had progressed from student-teacher to classroom teacher, to department head, to counselor, to psychologist, to administrator of mental health services, to university professor. In each position I had felt creative, confident and competent, but at this final level I felt fulfilled. The teaching was rewarding….I thought I had reached my level of optimal effectiveness in my chosen profession, where I was regularly experiencing the joy of accomplishment that comes from working on projects of intense personal interest.

All joking aside, I am taking my new role seriously. I am not afraid of it. I am having some fun and learning. The change in work load has proven more taxing than I ever imagined but we are making adjustments. But when will it go sour? Will I realize my limits before I exceed them? Dunno. This book indicates that we, as humans, never see it coming so I better learn to laugh about it now.

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Taxation? Inflation? Tomato?

Speaking of things I can laugh about, let’s laugh about money. I have no control over the dollar. It’s just an abstract way to move energy from place to place and time to time. And time is the real issue with money. We need it now. Now! I could list off 50 things I need to buy right now and could present link after link of opinion on why I should for the sake of the economy…an economy that is dominated by consumption.

But let’s talk briefly about that. Consumers don’t make stuff. They consume stuff. The world is a better place when we all have what we need. But you can’t have something that was never made. Somebody has to make it. Then somebody has to make it cheaper, better and longer lasting. But improvements in technology and manufacturing require investment. You know those 50 things I need to buy right now? How much will you pay me if I loan you the money for those things? You have to pay me to do without…cause I need those things now.

If your offer is high enough, I may be willing to delay gratification. That’s how interest rates are set naturally. You have to perk my interest. Now, that’s all fantasy land talk because interest rates are not based on investor interest, they are set by a committee of our fellow citizens in our free society but …well, I digress. Just understand that the committee thinks we are all better off if we avoid capital investment and, instead, buy a bunch of electronic gadgets so we can watch movies on the go.

In fact, our little committee is not the only committee in the world to feel that way. Australia, apparently, is interested in taxing savings. I don’t know if this is a grab for cash or if it is an effort to incentivize spending and, thus, the velocity of money but it’s not good. But it’s also not the end of the world. There was a link to a Martin Armstrong article this week on ZeroHedge. Some portion of Martin’s material may be a good fit in the the Peter Principle book’s chapter on failed prognostications. But he’s also hysterical so let’s focus on that today.

Oh! My! Gosh! Governments are going to tax us when we earn, tax us when we spend, tax us when we die….and now tax us when we save?!?!?! Dogs and cats living together! Mass Hysteria!

I don’t know where to begin. Maybe this way. Don’t save in Australian dollars. There. I said it. Problem solved. Put that energy into cattle instead. Or buy foreign currency. Or metal. Or Bitcoin. Find a place to park that energy that is not in the bank. I mean, that’s the intent of the legislation. The Australian government is asking people to stop saving in banks. That’s it. No big deal. I guess they want to undercapitalize their banks. Maybe cause a new round of bank failure and lower asset values.

OK. No problem.

But why is direct taxation of savings any different than inflationary monetary policy? At least it is honest. And the guy who has no savings (most of us) doesn’t care if savings are taxed. He also doesn’t see when he loses buying power to inflation…until it’s too late.

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So that’s what I’ve been reading lately. I’ll try to keep up with the blog a little more regularly but with the adjustment I’m making at work…well, it’s tempting to just come home every night and start drinking. Heavily. I hope to post some updates on changes Julie and I have made on the farm so the workload is more manageable and I’m more free to fall on the couch in the evening.

Thanks for taking time to read this today. I really appreciate it. If you don’t think management competence and interest rates are farming topics you’re in for a shock. I treated both of these topics lightly…and did so on purpose. I’ll have more books about management coming up because that’s where I’m at.

Click here to see all entries in my reading journal.