How Wall Street Ruined the Roomba and Then Blamed Lina Khan

Summary

Summarized wtih ChatGPT

A few days ago, consumer products company iRobot, the maker of iconic Roomba automated vacuum cleaner, declared bankruptcy.

Highlights from Article

iRobot’s robotic technology has gone to Mars on rovers and was deployed in the Fukushima nuclear reactor meltdown to measure radioactivity. Its iRobot Seaglider was used to peer underwater after the Deepwater Horizon oil spill. But iRobot no longer makes anything for the military. It now focuses, instead, on branding and manufacturing vacuum cleaners in China and Malaysia.

Conversely, the Chinese government, to preserve and extend its particular authoritarian model, actually suppresses the return on capital for its financiers, forcing an “asset heavy” approach. They overly emphasize factories and engineering. The net effect of these two complementary forces used to be celebrated as “Chimerica,” where China produces and the U.S. consumes.

To reverse this strategy, a more assertive antitrust regime is necessary, but it’s not enough. We also have to reduce the many other public levers of support for elevated returns on capital. Only then will it make sense for companies like iRobot to invest in robots instead of share buybacks.

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