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"What happens if Plan A fails? What is your Plan B?"
"I believe in the Hernando Cortes approach," he said, "When you hit the shore, burn the ships. There is no Plan B.", invoking the Spanish conqueror. California Governor Jerry Brown didn't flinch.
The lawmakers sat in disbelieving silence.
Until recently, local governments would sell this land to developers for very little upfront. A firm could buy land worth 5 billion yuan with just 500m yuan ($75.9m) in working capital, says Jinsong Du of Credit Suisse. Even better, the developer could then offer that land as collateral for a loan of, say, 2.5 billion yuan from a bank. And instead of ploughing those borrowed billions into developing the site, they could use it to buy more land. Developers were not too worried about generating cash flow, because in a pinch they assumed they could always sell the land at a profit or flog as-yet-unbuilt flats to eager buyers on the back of blueprints alone.
The viability of this model depends on ever-growing demand, which often comes from speculative investors looking for a chance of quick capital gains. Some are wealthy private individuals; many are enterprises that have been diverting money from capital investment, hoping for juicier returns from property.
You can't fix a systemwide problem by simply blaming or retraining individuals. When systems are broken, workers respond in counterproductive ways. They try "workarounds," as when a nurse guesses at a doctor's unreadable handwriting on a prescription because she is afraid to ask. Or they withhold information to avoid responsibility, wanting someone else to make a decision even if it is wrong. Blaming individuals can also make it harder to recruit and keep the most qualified employees. (In child welfare, talented caseworkers too often give up on investigating troubled families and gravitate to handling adoptions.)
-- Olivia A. Golden