Short-term thinking

Long ago businesses worked on long term goals. They had plans for the long term and short term losses weren't a dreadful thing. But businesses stopped doing that long ago. Now they only think of the short term. Companies that are on the stock exchange worry daily about any news that will lower their stock price. Companies that aren't on the stock exchange worry more about quarterly returns. Why? Because the bosses bonus is tied to stock options and quarterly profits. The big cheese worries more about his next bonus than long term business growth because he knows he won't be with the company long term. As soon as forecasts start looking bad for the next quarter the big boss starts cashing in his stock options and polishing his resume so he can leave the company before the bad news hits.

And this (in my opinion) is ruining the US.

Short-term thinking has led to our infrastructure falling apart and nobody bothering to save the money for fixing it. It has also led businesses to indulge in practices that ultimately hit the fan, such as sub-prime lending, without worrying about the future. Which is why so many businesses don't have a future at the moment.

Thinking only in the short-term is like walking while staring at your feet, you don't trip but you have no idea where you are going. Thinking only in the long-term doesn't work either, because while your eyes are focused on your long term goal you can walk off a cliff. When you walk you have to look up sometimes and look down sometimes. Businesses run by a single person look both short and long term, but large businesses and governments are run by people who are rewarded for the short term so that is where they are looking.

Can we fix it? Possibly. But we would have to change the way people are rewarded and most people want their reward now, not in some distant future.