The Bluth Company Goes to Russia

During the Winter Break, my daughter Renee and I have been watching Arrested Development on Netflix.  In an episode we watched the other night, in an effort to attract publicity and restore the tattered reputation of the Bluth Company, (somewhat) sensible Bluth brother Michael proposes to build a new demonstration home in two months, and then hold a ribbon cutting ceremony like those his father regularly performed before his incarceration.  Completely insensible Bluth brother Job, elevated to company president as a result of the legal mess that has now ensnared Michael, agrees with the idea–but demands that the house be built in two weeks.  Unable to find a construction crew willing to do the job, Michael puts his misfit relatives to work, and they miraculously complete the dwelling in the allotted time.

When the day of the ceremony arrives, the house is girded by a bright red ribbon tied in a bow.  From the outside, the house looks perfect.  Always the tacky showman, Job descends from a helicopter with a giant pair of scissors to cut the ribbon.  But as soon as the ribbon parts, to their dismay the Bluths find that the ribbon has been holding the house together, and watch as the four sides of seemingly well-built house fall crashing to the ground.

Something not too different has happened in Russia.  In the aftermath of the summer’s forest fires, to burnish the reputation of his government which had been tarnished by its blundering response to the disaster, Vladimir Putin said that the state would replace houses lost in the fire, and ordered a crash effort to build them before winter set in.  The results, however, were Bluth-esque:

While the houses appeared beautiful and modern at first glance, it has now become clear that they are entirely unfit to live in. According to a report by Moskovsky Komsomolets, their newly-relocated residents are suffering from intolerable cold and other consequences of shoddy construction.

One such resident, Anna Yegorovna, explained that her new home in the village of Beloomut was all but falling apart. Seams in the ceiling were never sealed, baseboards are detaching from the walls, floors are lumpy, windowsills are warped, and wind blows through the house with ease. To top it off, the basement is brimming with water.

Officials dismiss the complaints:

“The demands residents are making are too great – to heat the house from the outside, to change the flooring. But the deadlines were all the same – have the houses at a preliminary stage of completion by October 20, and be well enough to pass the housing inspection by November 1,” [a regional official] told Channel Five. “Well, of course, they didn’t do it in time.”

Who is this “they”?  And who set the deadlines?  Could it be Vladimir “Job Bluth” Putin?  Yes it was.

No, he didn’t descend from a helicopter to cut a ribbon or hand the homes’ occupants the keys, but he is known to be a tacky showman who has pulled just about every other stunt in the book, and in this instance, his peremptory order to complete the homes before the snow flew was as realistic as Job Bluth’s two week deadline, and the results were equally predictable.

About Craig Pirrong 223 Articles

Affiliation: University of Houston

Dr Pirrong is Professor of Finance, and Energy Markets Director for the Global Energy Management Institute at the Bauer College of Business of the University of Houston. He was previously Watson Family Professor of Commodity and Financial Risk Management at Oklahoma State University, and a faculty member at the University of Michigan, the University of Chicago, and Washington University.

Professor Pirrong's research focuses on the organization of financial exchanges, derivatives clearing, competition between exchanges, commodity markets, derivatives market manipulation, the relation between market fundamentals and commodity price dynamics, and the implications of this relation for the pricing of commodity derivatives. He has published 30 articles in professional publications, is the author of three books, and has consulted widely, primarily on commodity and market manipulation-related issues.

He holds a Ph.D. in business economics from the University of Chicago.

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