A few readers of this blog know me personally, and I’ve been asked once or twice why I’m so cynical and contemptuous of institutions. My answer is— personal experience and my personal disappointment in the institutions I’ve come to know.
I grew up Catholic in a time when the public face of Catholicism was Bing Crosby in “The Bells of Saint Mary’s.” I was an altar boy, and I actually wanted to become a priest. Then, within my own lifetime, I saw the Catholic priesthood exposed as a kind of training ground for despicable pedophiles, while The Holy Mother Church worked behind the scenes to limit the PR damage and cover up the transgressions. I was disappointed and disillusioned.
I was young in America when the United States had half of the world’s GDP, and the so-called, “American Dream” was real, and was iconic throughout the world at that time. I remember an America that had just saved the world by winning World War II. Then, within my own lifetime, I’ve seen the United States fall below many of the other developed nations in the standard of living, and I watched the U.S. military transition from a supremely unbeatable fighting force to a bloated jobs program with high rates of on-the-job injuries and fatalities. I was, and am, disappointed and disillusioned.
To the extent that political parties can be considered institutions, they are so far beneath my contempt that I won’t even discuss them here. But more consistently disappointing than religions or nations are corporations. Who can forget Enron or Tyco or WorldCom or Lehman Brothers or Pfizer (did he just say Pfizer?) In the 1990s, Pfizer was named the “most admired” and “best managed” corporation in America. I owned some Pfizer stock when it seemed that everybody who didn’t own some of it wanted to own it. During the 1990s, Pfizer stock increased in price 10 fold in 10 years. Then, within the last twelve years, I’ve seen Pfizer become, arguably, the most dysfunctional company on the Fortune 500 (See Fortune Magazine, August 15, 2011), while Pfizer stock has languished dead flat for ten years at a price less than half of its value during the glory years. I’m disappointed and disillusioned.
From my personal experience, I believe that— just as surely as all living things eventually die— all big institutions inevitably crumble and fail if you watch them long enough. And you can, literally, watch them because their demise takes less than a single lifetime to unfold. Only 15 companies on the Fortune 500 were on that list 50 years ago. When you see an institution— any institution— at the peak of excellence, you can be pretty sure that the downhill slide has already inexorably started, and that’s why I never put my faith in any big institution. That’s why I never believe the happy talk.
Showing posts with label Lehman Brothers. Show all posts
Showing posts with label Lehman Brothers. Show all posts
Tuesday, September 20, 2011
Wednesday, May 12, 2010
Whatever Happened to Murphy’s Law?
“Anything that can go wrong, will go wrong.” That’s Murphy’s Law, and most of us over the age of 30 probably heard it for the first time in high school. Whether we knew it or not, it was our first brush with philosophy. But then, like so many other iconic principles from the 20th Century, it just went away.
Throughout the 1970s and 1980s, an endless parade of “glass-half-full” happy talkers and human resource motivators and self-help gurus bombarded us with platitudes like “Failure is not an option,” and “Life rewards the risk takers,” and “Success is just a matter of learning to manage the expectations of others.” Murphy’s Law was deemed to be too pessimistic and negative for this new culture that preached unbounded positivity in all aspects of modern life. The final nail in the coffin was Y2K. Never before had a potential calamity been subjected to study and pre-planning with such attention to ultimate disastrous consequence as this predicted failure of the world’s computer systems. But then, when midnight December 31, 1999 arrived— nothing bad happened. Everything that could go wrong, didn’t go wrong, and Americans mistakenly assumed that Murphy’s Law no longer applied. Then came the 21st Century.
In the last decade, America has suffered through the Stock Market plunge of late 2000, followed by 9/11, followed by Enron, followed by the embarrassing and pathetic military failures in Iraq and Afghanistan, followed by the in-flight destruction of the space shuttle, Columbia, followed by Hurricane Katrina, followed by the real estate bubble collapse and subsequent epidemic of home foreclosures, followed by the bankruptcy of Lehman Brothers and skyrocketing unemployment, followed by the BP oil disaster in the Gulf of Mexico, followed by an instantaneous 1000 point drop in the DOW. And if that wasn’t enough, there’s the disgusting, dirty little secret that many wing-nut Americans see the election of a black President as yet another tragic failure in “the system.” What all of these events have in common is that they came as a complete surprise to just about every American, including the people in high places who were being paid big money to avoid being surprised. Surprise is what you get when you ignore Murphy’s Law. Only the surprise of Hurricane Katrina was excusable.
So now, as we enter the second decade of this dysfunctional 21st Century, it should be evident to everyone that Murphy’s Law is still alive and well. It’s always been true that the failure to imagine and anticipate a downside betrays a shallowness of intellect, and this is the case now more than ever before. Recapturing our healthy sense of modern reality means ignoring the happy talkers, and realizing that failure is not optional— it’s inevitable, and appreciating the fact that carnival magicians are the only people who can reliably count on achieving success in their chosen profession simply by managing the expectations of others.
Throughout the 1970s and 1980s, an endless parade of “glass-half-full” happy talkers and human resource motivators and self-help gurus bombarded us with platitudes like “Failure is not an option,” and “Life rewards the risk takers,” and “Success is just a matter of learning to manage the expectations of others.” Murphy’s Law was deemed to be too pessimistic and negative for this new culture that preached unbounded positivity in all aspects of modern life. The final nail in the coffin was Y2K. Never before had a potential calamity been subjected to study and pre-planning with such attention to ultimate disastrous consequence as this predicted failure of the world’s computer systems. But then, when midnight December 31, 1999 arrived— nothing bad happened. Everything that could go wrong, didn’t go wrong, and Americans mistakenly assumed that Murphy’s Law no longer applied. Then came the 21st Century.
In the last decade, America has suffered through the Stock Market plunge of late 2000, followed by 9/11, followed by Enron, followed by the embarrassing and pathetic military failures in Iraq and Afghanistan, followed by the in-flight destruction of the space shuttle, Columbia, followed by Hurricane Katrina, followed by the real estate bubble collapse and subsequent epidemic of home foreclosures, followed by the bankruptcy of Lehman Brothers and skyrocketing unemployment, followed by the BP oil disaster in the Gulf of Mexico, followed by an instantaneous 1000 point drop in the DOW. And if that wasn’t enough, there’s the disgusting, dirty little secret that many wing-nut Americans see the election of a black President as yet another tragic failure in “the system.” What all of these events have in common is that they came as a complete surprise to just about every American, including the people in high places who were being paid big money to avoid being surprised. Surprise is what you get when you ignore Murphy’s Law. Only the surprise of Hurricane Katrina was excusable.
So now, as we enter the second decade of this dysfunctional 21st Century, it should be evident to everyone that Murphy’s Law is still alive and well. It’s always been true that the failure to imagine and anticipate a downside betrays a shallowness of intellect, and this is the case now more than ever before. Recapturing our healthy sense of modern reality means ignoring the happy talkers, and realizing that failure is not optional— it’s inevitable, and appreciating the fact that carnival magicians are the only people who can reliably count on achieving success in their chosen profession simply by managing the expectations of others.
Saturday, March 20, 2010
The Days of Henry Ford and Tom Edison Are Long Gone
Last week, Lehman Brothers CEO, Dick Fuld, was in the news again when an investigative commission released its report on why Lehman Brothers went bankrupt. To nobody’s surprise, the investigators concluded that Lehman Brothers, under Fuld’s stewardship, went down in flames simply because Fuld and his company richly deserved to fail for their fraudulent business practices. Fuld may have been the poster boy for the 2008 meltdown, but the seeds of that fiasco go back more than twenty years.
The real story isn’t about Dick Fuld, but about the fact that America tolerates and nourishes a veritable galaxy of creatures just like him, men like Jeff Skilling and Ken Ley of Enron, and Roger Smith and Rick Wagoner of General Motors, and Hank Mckinnell of Pfizer. The list could go on and on, for there’s no shortage of men like these who took a highly successful company and drove it into the ground just for personal wealth and lazy unimaginative expediency.
Our problem in America is partly that our quaint and naïve love affair with Capitalism is based in no small way on our nostalgic admiration for industrialists like Henry Ford and Thomas Edison and Harvey Firestone and Walter Chrysler— primarily entrepreneurs, and then subsequently tycoons who headed successful business operations that produced and sold products that they, themselves, had invented or developed. That respected American entrepreneurial tradition continues to this day with successful businessmen like Bill Gates and Steven Jobs and Warren Buffet. Admiration for all of these men is justifiable.
But the essence of the greater problem is that most Capitalism-loving Americans can’t tell you the difference between a Bill Gates and a Dick Fuld, and it would be difficult to overstate the significance of that. The difference is that corporate honchos like Fuld and the vast majority of other corporate CEOS are definitely NOT entrepreneurs. On the best day of their lives, these men could never start a legitimate business from scratch and make it successful any more than your average17th Century pirate could design and build his own sailing ship. These modern pirates are top-feeding functionaries who rise to positions of incredible wealth and power with their internal corporate political skill, and usually nothing more.
Why is this suddenly more important than it’s been in the past? Because the true unemployment rate in the richest nation on earth is now closer to 20% than to the reported 10%, and most of the people without jobs will never go back to high-paying work because the jobs— first in manufacturing, and then accounting, and then customer service, and then research and development— all were exported out of the country by the honchos to make the bottom line look good in the shortest possible time without regard to long term consequences. Of course, there are apologists aplenty in places like the U.S. Commerce Department who tell us that the exportation of jobs was just a natural consequence of globalization, but globalization didn’t come with a rule book that mandated the export of jobs just to save labor costs. Those decisions were left up to the honchos running the companies, and their own self-serving interpretation of Capitalistic ethics gave them their roadmap to follow. What we have now, massive unemployment and financial misery at the bottom, and exploitation at the top for multi-million-dollar bonus checks, all of this is simply unrestricted free-market Capitalism at work, functioning just the way it was designed to function. I’ve written it before and I’ll write it again, Capitalism only works in a positive way within an ethical framework. The days of Henry Ford and Tom Edison are long gone.
The real story isn’t about Dick Fuld, but about the fact that America tolerates and nourishes a veritable galaxy of creatures just like him, men like Jeff Skilling and Ken Ley of Enron, and Roger Smith and Rick Wagoner of General Motors, and Hank Mckinnell of Pfizer. The list could go on and on, for there’s no shortage of men like these who took a highly successful company and drove it into the ground just for personal wealth and lazy unimaginative expediency.
Our problem in America is partly that our quaint and naïve love affair with Capitalism is based in no small way on our nostalgic admiration for industrialists like Henry Ford and Thomas Edison and Harvey Firestone and Walter Chrysler— primarily entrepreneurs, and then subsequently tycoons who headed successful business operations that produced and sold products that they, themselves, had invented or developed. That respected American entrepreneurial tradition continues to this day with successful businessmen like Bill Gates and Steven Jobs and Warren Buffet. Admiration for all of these men is justifiable.
But the essence of the greater problem is that most Capitalism-loving Americans can’t tell you the difference between a Bill Gates and a Dick Fuld, and it would be difficult to overstate the significance of that. The difference is that corporate honchos like Fuld and the vast majority of other corporate CEOS are definitely NOT entrepreneurs. On the best day of their lives, these men could never start a legitimate business from scratch and make it successful any more than your average17th Century pirate could design and build his own sailing ship. These modern pirates are top-feeding functionaries who rise to positions of incredible wealth and power with their internal corporate political skill, and usually nothing more.
Why is this suddenly more important than it’s been in the past? Because the true unemployment rate in the richest nation on earth is now closer to 20% than to the reported 10%, and most of the people without jobs will never go back to high-paying work because the jobs— first in manufacturing, and then accounting, and then customer service, and then research and development— all were exported out of the country by the honchos to make the bottom line look good in the shortest possible time without regard to long term consequences. Of course, there are apologists aplenty in places like the U.S. Commerce Department who tell us that the exportation of jobs was just a natural consequence of globalization, but globalization didn’t come with a rule book that mandated the export of jobs just to save labor costs. Those decisions were left up to the honchos running the companies, and their own self-serving interpretation of Capitalistic ethics gave them their roadmap to follow. What we have now, massive unemployment and financial misery at the bottom, and exploitation at the top for multi-million-dollar bonus checks, all of this is simply unrestricted free-market Capitalism at work, functioning just the way it was designed to function. I’ve written it before and I’ll write it again, Capitalism only works in a positive way within an ethical framework. The days of Henry Ford and Tom Edison are long gone.
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