My friend, R.I., and I have an ongoing argument. She thinks the corporate rich in the US don’t care about our country and are perfectly content to lay waste to our economy. Many are already galloping off to China and India to rape and plunder those emerging markets.
It’s true that once the corporate rich started shipping jobs overseas and swamping American consumers with credit, it was only a matter of time until the American economy turned into a stone from which they could squeeze no water. But I don’t think they were carrying out a conscious strategy like she does. (No, she’s not a conspiracy theorist.)
The rich, by nature, are disinclined to examine both their motives and their central tenets — such as what’s blazoned over the arch that serves as the portal to the marketplace. You know, the one that goes, “Abandon all ethics, ye who enter here.”
But rich are suffering as well. Not only are they being called on the carpet for mismanaging their personal fiefdom of the economy, but they’ve lost money. While that’s not comparable to the job and house loss many in the middle-class are experiencing, rich people tend to be to self-involved to put their suffering in perspective.
What they lack in empathy, R.I. lacks in sympathy. Invoking the memories of those investors who jumped out the window when the stock market crashed in 1929, she declares: “I want to see them splattered. I want you to have to dodge them on the way to work.” (I commute to New York City.)
To protect myself from that hardest of hard rain, she says, “You’ll need a titanium umbrella.”
Categories: Economy
Progressive Culture | Scholars & Rogues 
They may not have behaved intentionally, but the best that can be said for them is that they acted without any long term thought. In my opinion, that’s just as bad as doing it intentionally. The lack of long term thinking is what got the automakers into their current predicament. And it’s not just the super rich and the traders. For quite some time now what used to be called “Middle Class” has been infatuated with the market. The people getting the blame were enabled by all the people who wanted to feel like real capitalists and see a handsome return on their investment.
Lex has it. I know rich people, and it’s never struck me that they’re any smarter than anybody else. Some are bright on money issues, of course – most people have particular areas where they’re smart – but there’s no overarching superiority where things like big picture grasp of implications and long-term vision are concerned.
While they’re no doubt feeling what they think is pain, their wealth I think has a certain anesthetic effect, in that they don’t notice things that are devastating for the rest of us. Money is a great insulator.
I do wish they’d at least regard us have-nots as canaries in the proverbial coalmine….
Thank you for the most sensible and succinct treatment of this topic I think I’ve ever read.
I think capitalism is relatively simple. Companies follow the path of least resistance to the greatest profits. CEOs don’t hold their positions for long, so their chief worry is the quarterly profit and loss (P&L) statement. Companies will often obey the law because the law offers resistance that can reduce profits. If a law gets too much in the way, they will find a way to circumvent it, and sometimes that happens at lower levels in the organization, not the top. Pressure to perform causes people to cheat.
Capitalism is great at self-adjusting and terrible at thinking ahead. Only government thinks ahead, albeit not always very well. The companies producing CFCs would have cheerfully stripped the ozone layer away, then sold us screens, umbrellas, and lead-lined clothing to combat the radiation. Capitalists would cheerfully run up deficits to provoke a worldwide monetary crisis, widespread famine, and severe economic hardship because they know enough to short certain commodities and buy others that hedge against inflation.
Well said, JS, and too true. But i have a hard time feeling bad for an auto company (or any other) that refuses to think ahead. As my mother is fond of saying, “Lack of planning on your part does not, necessarily, constitute an emergency on my part.”
And what of, say, Toyota? They are capitalists through and through, yet they’ve managed to think ahead. Not in an effort to be good corporate citizens, but in an effort to be good capitalists. Their long term thinking has solidly spanked the short term thinking of Detroit.
Perhaps we need to differentiate between capitalism and Wall Street. Henry Ford was a capitalist to his bones, but he didn’t (so far as i know) mess around with stocks.
Lex:
Very good point. Capitalism can be influenced by cultural norms, and Japanese cultural norms tend to be more focused on long-term gains. I don’t think the CEO of Toyota faces the same sort of quarterly P&L pressure that US CEOs face, but I won’t say that definitively because I have done precious little consulting work for Japanese firms.
I don’t feel bad for the auto company, Lex, if by “company” we’re talking about shareholders. They’re gettng what they deserve (assuming they haven’t found suckers to buy their stock, which many probably have). Unfortunately, it’s not just shareholders that get hurt. The company’s employees, employees of vendors, business owners in areas where auto plants shut down … A LOT of people get hurt because of short-term thinking.
JS,
Agreed – deeply – on the all the people who get hurt. I’m a proud native of Detroit, with plenty of family and friends who that have punched those clocks. I’ve seen too many examples of the hurt that their business practices have caused. I’ve also been exposed to the full force of the “buy American” argument. And while i agree with it in principle, i’ve always wondered why i should be loyal to them but they don’t have to be loyal to me/us?
So while i don’t want to see anymore pain, i brace myself for it anyhow. But i know that if those companies return to profitability the jobs still won’t come back. The slashed retiree benefits won’t be reinstated. The pain involved in this situation only fuels my anger at those companies. Maybe it’s too personal…
Yikes, the comments were better than my post. Thanks, everybody!