The Texas Longhorns lost again this past week in the annual Red River Showdown, and it is quite apparent that their football team is just not very good. This despite having a wealth of resources at their disposal to hire expensive coaches, invest in the best training facilities, and perform costly stadium upgrades. There are a lot of college football programs that are in this same boat, throwing a lot of money around in the big business world of college athletics, trying to turn their once great storied programs around and be relevant once again in college football.
This is such a common practice these days that some definite trends are starting to emerge, and the biggest takeaway is that throwing lots of money around doesn’t solve the problem or turn the athletic program around. The second takeaway is that you are often paying for past success, and the correlation becomes clear, that past success doesn’t correlate all that well with future predicted results. In fact, one of the biggest drawbacks regarding paying for past success with such extravagantly large coaching contracts is that these coaches are fat and happy. They are basically set for life after having cashed in on their lottery tickets via the large fully guaranteed coaching contracts. And finally, you want to find the coaches that are about to have success, the ones that will achieve great things at smaller programs, and hire these guys while they are still relatively poor, hungry and motivated to improve their career trajectory. Of course, there are always exceptions to the rule in Nick Saban, but these guys don’t grow on trees, and there just aren’t enough of these types to go around in college football.
We also see this with the New York Yankees who have failed to make the World Series in baseball for over a decade despite routinely having the highest payroll in MLB, the biggest television market, a brand-new stadium, and great baseball fans. The Yankees spent the last off season signing Gerrit Cole to a $324 million contract, hoping that this player would put them over the top and back in the World Series. Ironically, they were defeated in this year’s playoffs by one of the lower payrolls in MLB via the Tampa Bay Rays. This just serves to illustrate the point that throwing money at a problem isn’t going to cut it in today’s hyper-competitive environment, and in many cases, too much money can be part of the reason for the systemic or organizational failures. Especially, if it papers over the underlying issues responsible for the poor outcomes.
We experience this phenomenon in areas like big government, infrastructure projects, education spending, healthcare, space exploration and military spending. For example, this country has tried to fix the educational system through all kinds of expensive money spending initiatives that are doomed to fail because they never address the underlying reasons for the poor outcomes.
You have to get in there and do the dirty work so to speak, and much of this revolves around motivation, hard work, and addressing difficult unpleasant realities or causation factors that are at the core of the problem. And unfortunately, there is too much of a history to deny the trend that most difficult problems will continue to persist decade after decade despite record amounts of wasteful spending dedicated to the given issue.
I have tried to think if there is some redeeming aspect to this dynamic in our society, some greater good or purpose that I am missing that perpetuates and even incentivizes this state of affairs. Maybe it is the business of waste, perhaps human beings and societies actually need as a core component to continually throw large amounts of money at the same problem over and over again without getting any meaningful results or the desired and promoted outcomes. In short, solving the problem is detrimental to society, as a healthy society needs seemingly intractable problems to keep them busy.
I am sure that I could think of some more dubious but remotely plausible ideas and stories to continue along this line of inquiry. However, I think it is more logical and rational to just take the simplest explanation here. These long duration problems usually have some structural component to them that makes them hard to solve through just sheer brute financial resources.
Consequently, I don’t expect the educational system to be fixed in my lifetime, the government to balance the budget, massive amounts of people capable and competent of critical thinking and rational decision making, and social justice warriors accomplishing anything meaningful in terms of societal change that quantifiably makes a difference in this world.
My only hope is that the Texas Longhorns throw some more humongous sums of money at their next high profile coach, and continue to prove my underlying notion that there are structural issues going on in Austin that doom this football program into being perpetually mediocre underachievers for the foreseeable future. It’s the head in the sand approach to problem solving, and likely making an appearance in your community as we speak.
Courtesy of John Mark Gray,
The views and opinions expressed herein are the author's own, and do not necessarily reflect those of EconMatters.
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