Walking to work this morning, I noticed a bit of doggerel painted on the sidewalk ‘Know Obama Know Marx’. Someone had made some effort to do this, as the lettering was carefully stenciled in red paint. 20 years on from the fall of the Berlin Wall, I feel a bit of nostaligia for the Cold War, and who under the age of 50 has even heard the phrase ‘red baiting’, much less knows what it means.
What’s happened today, with the chairman of GM resigning the result of pressure from the White House will cause those who would like to paint the president red screaming about controlled economies and fearful of the president’s tax and spend agenda that will so completely redistribute wealth. As someone well into his sixth decade, I have to say I look forward to the fruits of that most massive redistribution of wealth perpetrated by that other red president, Franklin Roosevelt. I’m referring, of course, to Social Security. For me, the mixed economic system we’ve enjoyed in this country for 8 decades seems just fine.
Frankly, top executives at General Motors- and that includes union officials- as with the banks, should get what’s coming to them. President Obama, as the people’s elected chief executive, should be the hatchet man. It is astonishing to me that, up to this point, GM’s stockholders have not arisen insisting on a clean slate. But, on second thought, there must be some sort of commercial and ecological myopia that afflicts GM stockholders. That must be it, otherwise GM’s single-mindedness in stamping out SUVs and pickups- products that for years could not be justified either commercially or ecologically- cannot be explained.
With all that, the slash and burn mentality seems to be pervasive within corporate governance. Does anyone do any strategic planning anymore? As the money center banks were packaging subprime mortgage loans, did they honestly believe that the actual performance of those loans would never be an issue? Returning to GM for a moment, emblematic of all smokestack industries, who that works there does not believe that environmental spoliation is not an issue? It seems clear that companies generally are managed from quarter to quarter (or more precisely, from bonus period to bonus period), with the devil, then, taking the hindmost. Unfortunately, the hindmost, consisting of a world on the edge of disaster, affects all of us, including those who profited inordinately. What do they say to themselves to justify behavior that has left global conditions in shambles? Where will they go to avoid the upshot of their actions? What do they tell themselves? What do they tell their children? These people must have physical access to some earthly oasis of which the rest of us are unaware.
Unfortunately, there exists now a term- I’ve heard it for years, but now hear it frequently- that describes the mindset the upshot for which we are all now paying: ‘mindless capitalism’. Mind you, I consider myself what’s termed a classic liberal, by which is meant a capitalist who maintains a mindset of enlightened self-interest- what’s good for me in the short run, if it is not good for others and/or good in the long run, is actually bad for me. What is of lasting benefit is, ultimately, good for me, too. Maintenance of this type of outlook requires critical, reflective thinking- something that doesn’t seem to even occur to most people- with rather sad consequences when this sort of thinking is not employed in business. Classic liberalism, moreover, probably doesn’t work as well for those with mortgages to pay on 10,000 square foot primary residences and payments to make on $125,000 cars. With all that, the government intervention in business, coupled with tax changes necessary to pay for it, seems to some like a nationalization, precedent, then, to a wholesale redistribution of capital as part of a movement toward a planned economy. I don’t buy that. In my view, the government has lately only been trying to extinguish the economic firestorm brought about by mindless capitalism.