Is It All Chainsaw Jack Welch's Fault?

[TwiceHorn 31,283]

Not a cloak room topic, per se, but controversial enough.

This thoughtful and provocative article points up Welch's transformation of General Electric as a turning point in corporate America and to the increase in wealth inequality. https://messaging-custom-newsletters.nytimes.com/template/oakv2?campaign_id=9&emc=edit_nn_20220605&instance_id=63260&nl=the-morning&productCode=NN&regi_id=96259226&segment_id=94287&te=1&uri=nyt%3A%2F%2Fnewsletter%2Ff347603e-c627-5c4a-a0a6-90a729a30283&user_id=c1075213f447fb57d6557c42f151a5ba

Quote

For decades after World War II, big American companies bent over backward to distribute their profits widely. In General Electric’s 1953 annual report, the company proudly talked about how much it was paying its workers, how its suppliers were benefiting and even how much it paid the government in taxes.

Quote

But in the long run, that approach doomed G.E. to failure. The company underinvested in research and development, got hooked on buying other companies to fuel its growth, and its finance division was badly exposed when the financial crisis hit. Things began to unravel almost as soon as Welch retired, and G.E. announced last year it would break itself up.

Discuss.

[Celery Man 20,886]

Wouldn’t say “all” and wouldn’t pin it squarely on him but… most and he’s as good as anybody 

[David Dennison 18,660]

I don't think Jack Welch is to blame for the government letting capitalism run the joint.

[Biff Tannen 45,499]

I blame ALEC more than anything, but whatever events led up to the creation of ALEC, yeah all of that. 

[RomaVicta 29,794]

1 hour ago, David Dennison said:

I don't think Jack Welch is to blame for the government letting capitalism run the joint.

I felt good about an observation I made back in the 80's when I heard language of the dialectic between the US and the Soviet Union change from freedom vs communism to capitalism vs communism.

I could imagine Americans taking arms to defend freedom. Killing in the name of capitalism just doesn't have the same moral ring to it. Still, Americans started referring to themselves as capitalists which they largely aren't:

Quote

Capitalist: a wealthy person who uses money to invest in trade and industry for profit in accordance with the principles of capitalism.

 

If you consider for even a second that you might buy the below, you're not a capitalist:

 

Free markets could be tied to freedom, but capitalism? I have my doubts.

I'm sure, of course, that there was no strategy to changing the language of the conflict to favor our fat cat masters. They also created the absurd myth that the market will straighten out all problems. It didn't help with train derailments, pollution, trusts, collusion, or brutal working conditions for men, women, and children alike.

I don't want to be a socialist, but if that's the only option for saving some semblance of the ideal of this republic, I'll embrace it in a heartbeat.

 

[RomaVicta 29,794]

1 hour ago, Biff Tannen said:

I blame ALEC more than anything, but whatever events led up to the creation of ALEC, yeah all of that. 

My dumbass thought you were jokingly referring to Alec Baldwin, at first. Then I looked it up. Thanks. ALEC:

Quote

The American Legislative Exchange Council (ALEC) is a nonprofit organization of conservative state legislators and private sector representatives who draft and share model legislation for distribution among state governments in the United States.[2][3][4]

ALEC provides a forum for state legislators and private sector members to collaborate on model bills—draft legislation that members may customize and introduce for debate in their own state legislatures.[5][6][7] ALEC has produced model bills on a broad range of issues, such as reducing regulation and individual and corporate taxation, combating illegal immigration, loosening environmental regulations, tightening voter identification rules, weakening labor unions, and opposing gun control

Operating since 1973.

How's that for you post-Nixon GOP conspiracy?

 

[Brisketexan 104,628]

2 hours ago, TwiceHorn said:

Not a cloak room topic, per se, but controversial enough.

This thoughtful and provocative article points up Welch's transformation of General Electric as a turning point in corporate America and to the increase in wealth inequality. https://messaging-custom-newsletters.nytimes.com/template/oakv2?campaign_id=9&emc=edit_nn_20220605&instance_id=63260&nl=the-morning&productCode=NN&regi_id=96259226&segment_id=94287&te=1&uri=nyt%3A%2F%2Fnewsletter%2Ff347603e-c627-5c4a-a0a6-90a729a30283&user_id=c1075213f447fb57d6557c42f151a5ba

Discuss.

Listened to the author on an interview on NPR last week, and ended up discussing the premise with my wife, and that I might oughta buy this book.  I remember well the deification of Jack Welch, the Genius Who Changed Everything, back when it happened (although I was pretty damn young and inexperienced, so didn't have a great filter to run the info through at the time). 

It's an interesting premise, and I'd like to read more on it, but yeah, I am on board with the thesis that what has changed and harmed us isn't laws and regulations so much -- those are a trailing indicator.  What changed was the ethos -- first an abandonment of the commonwealth, followed by outright denigration and attacks on the very concept.  What were trumpeted as the most American of values -- freedom (including economic freedom) benefiting everyone (see the old GE statements about how many people it employed and how well it treated them) -- is now slammed as "ZOMG SOCIALISM!"

Having a sense of responsibility for the success and wellbeing of your employees is a choice a business makes.  It is a choice that was common among post-war American businesses.  As time moved us farther away from WWII, more and more businesses chose otherwise.  Employees went from human beings who it was right to care about to disposable costs -- if you could save $40k by buying an improved widgetmaker, or you could save $40k by eliminating an employee, those things were seen as identical.  We ended up worshipping at the altar of quarterly profits, and denigrating long-term strategic thinking and stability.  That choice is killing us as a whole.  I'm curious as to how this book addresses that.

[Blotto 23,434]

First gig out of school was at GE towards the end of Jack's reign. I only lasted a few years before I left, but it was interesting to observe the managerial structure he had put in place.  I will say that he did a pretty good job of eliminating a lot of useless mid level management roles. It was a surprisingly "flat" organization for a company of its size. How they managed, developed, and promoted people was a machine. But the few people I still stay in touch with from those days all have a similar opinion of Welch, and its not positive. This was also about the time GE was closing a lot of traditional manufacturing sites in the US in search of cheaper manufacturing. 

Of course at the time I was there, the stock was doubling every couple of years, GE had the largest market cap of any company, and Jack was on the  cover of every business magazine so he had a pretty good cult following.  I worked for a lower margin industrial business, and Jack's never ending quest for increased margins was turning our products to shit. At the time, GE Capital was the golden child, and I felt bad for the division CEO's that had to try and compete with Capital for Jack's attention. The scale of the GE Capital empire was amazing. They were financing everything on the planet and making fuckloads of money. Until the financial crisis. 

[TwiceHorn 31,283]

4 hours ago, Brisketexan said:

It's an interesting premise, and I'd like to read more on it, but yeah, I am on board with the thesis that what has changed and harmed us isn't laws and regulations so much -- those are a trailing indicator. 

Very much agree.  Corporations and business interests changed, not the laws.  We've certainly doled out a shit ton of corporate welfare in the meantime, but it seems to me that many or most corporations have stopped considering their position as "citizens of the republic."

And now we're trying to figure out how to legally bring the corporations to heel and many of the legislative options don't look too good, really.  One of those instances where you "can't legislate morality."

[Mrs Whiggins 13,049]

4 hours ago, RomaVicta said:

My dumbass thought you were jokingly referring to Alec Baldwin, at first. Then I looked it up. Thanks. ALEC:

Operating since 1973.

How's that for you post-Nixon GOP conspiracy?

 

IIRC, the Member Formerly Known As Lobo who became the Phantom Member Known as Guest Lobo, was familiar with ALEC and related some anecdotes in one of his longer posts. In some form or fashion, these groups stay the same over the last several decades but occasionally change the letterhead when people get wind of their machinations.

[Blotto 23,434]

9 minutes ago, TwiceHorn said:

Very much agree.  Corporations and business interests changed, not the laws.  We've certainly doled out a shit ton of corporate welfare in the meantime, but it seems to me that many or most corporations have stopped considering their position as "citizens of the republic."

Profits dictate everything. No real concern about whats best for employees or our society in general. Its the corporate version of fuck you, pay me. And the executives and boards that guide corporate strategy have been incentivized to make this happen and well rewarded for their efforts

Quote

In 2020, CEOs of the top 350 firms in the U.S. made $24.2 million, on average — 351 times more than a typical worker. A 2019 Institute for Policy Studies report estimates that 80% of S&P 500 companies pay their CEO over 100 times more than they pay their median worker.

 

10 minutes ago, TwiceHorn said:

And now we're trying to figure out how to legally bring the corporations to heel and many of the legislative options don't look too good, really.  One of those instances where you "can't legislate morality."

And with all that pay referenced above, they can afford to donate millions and ensure that nothing changes on the legislative front. The wealth of this country is increasingly consolidating into the hands of the elite and they own the elected officials that should be looking out for their constituents.  Its bullshit, but being in DC is a pretty lucrative gig these days, so nobody is looking to rock the boat. 

[TwiceHorn 31,283]

2 minutes ago, Blotto said:

Profits dictate everything. No real concern about whats best for employees or our society in general. Its the corporate version of fuck you, pay me. And the executives and boards that guide corporate strategy have been incentivized to make this happen and well rewarded for their efforts

 

And with all that pay referenced above, they can afford to donate millions and ensure that nothing changes on the legislative front. The wealth of this country is increasingly consolidating into the hands of the elite and they own the elected officials that should be looking out for their constituents.  Its bullshit, but being in DC is a pretty lucrative gig these days, so nobody is looking to rock the boat. 

Here's what strikes me as the fucked up thing.  For all the woofing about serving the shareholder, average returns in the market haven't changed that much, from say 1953 to present.  Until this recent run-up, they've actually dropped some.

[David Dennison 18,660]

For over 100 years American jurisprudence has held quite clearly that "a business corporation is organized and carried on primarily for the profit of the stockholders." 

Therein lies the problem.

[Brisketexan 104,628]

For over 100 years American jurisprudence has held quite clearly that "a business corporation is organized and carried on primarily for the profit of the stockholders." 
Therein lies the problem.

It’s not that simple. EVERY business exists to make money. My business does. Where it falls apart is when the business, and the people running it, forget that they and the business are part of a community. I know an old lawyer who talked about the business of his law firm and said “80 families depend on our firm doing well.” And he was proud of that. He took it seriously. Yes, he did well, but he knew that his business meant a livelihood for a lot of other people, and he took that seriously and was proud of it. It was a choice he made. Businesses should make that choice. A business can be both profitable and a good member of the community.

[David Dennison 18,660]

49 minutes ago, Brisketexan said:

It’s not that simple. EVERY business exists to make money. My business does. Where it falls apart is when the business, and the people running it, forget that they and the business are part of a community. I know an old lawyer who talked about the business of his law firm and said “80 families depend on our firm doing well.” And he was proud of that. He took it seriously. Yes, he did well, but he knew that his business meant a livelihood for a lot of other people, and he took that seriously and was proud of it. It was a choice he made. Businesses should make that choice. A business can be both profitable and a good member of the community.

Thank you, fiduciary duty to shareholders.

[elfenix 34,171]

jack was just talking milton friedman's lesson to heart:

Quote

The Social Responsibility of Business Is To Increase Its Profits

 

edit:

so 4 things happened back in the late 60s and early 70s that gave rise to modern american conservatism. 

1. rise of the ratfuckers / winning is all that matters in the nixon admin. 

2. milton writes his essay giving intellectual cover to business to fight back against the progress being made in reigning in the worst of capitalism (clear air/water acts, creation of the EPA, car safety mandates, asbestosis lawsuits, etc)

3. soon to be justice and then tobacco lawyer lewis powell writes a roadmap to corporate domination of pretty much all of government (h/t @washparkhorn ) leading to ALEC and the federalist society and other dark money funded bullshit

so you've got the method, intellectual cover, and the roadmap all in place.  problem is that's still not a lot of the electorate.  in 1971 the republicans won 3 presidential terms in 42 years. two of those were by recruiting a literal war hero, and the other featured the assassination of a leading candidate and the fracture of the solid south. so, you need number 4:

4. the rebellion of southern whites against the federal government (again) because the states could no longer issue school vouchers to them to use for segregation academies, alongside the IRS's crackdown on seg academies.  this, when whitewashed with protestantism's sudden about-face on abortion, gave the modern conservative movement its big voter base. 

Edited June 6, 2022 by elfenix

[Celery Man 20,886]

9 hours ago, David Dennison said:

For over 100 years American jurisprudence has held quite clearly that "a business corporation is organized and carried on primarily for the profit of the stockholders." 

Therein lies the problem.

 

9 hours ago, Brisketexan said:

It’s not that simple. EVERY business exists to make money. My business does. Where it falls apart is when the business, and the people running it, forget that they and the business are part of a community. I know an old lawyer who talked about the business of his law firm and said “80 families depend on our firm doing well.” And he was proud of that. He took it seriously. Yes, he did well, but he knew that his business meant a livelihood for a lot of other people, and he took that seriously and was proud of it. It was a choice he made. Businesses should make that choice. A business can be both profitable and a good member of the community.

I'm certainly way over my skis talking about any of this due to age and amount of general expertise in the topic (although I have a fair amount of familiarity with the modern GE) but maybe there's some prisoner's dilemma. Company exists to make money which becomes company exists to increase the price of the stock. The company is comprised of people, whose wellbeing is no longer directly relevant to the goal of the company. Employees at all levels (or at least employees who aren't stupid) now exist to maximize their own wealth/power/safety. This makes for a large amount of dysfunction generally, and of course those at the very tippy top both understand this the best and have the greatest ability to achieve their goal. Which of course is at best indirectly related to what best positions the company for long term success and stability.

Take a company like GE where they enter crisis, the worker bees start looking for safe harbor while each of the 10,000 little Machievellis in middle management is angling for their own outcome. And the big Machievellis up top or doing the same fucking thing.

Whatever thought I'm expressing isn't very distilled. My feeling is that out of the Reagan era there's this feeling (greed is good?) that caring about other people is not only for women and children rather than serious men but is actually bad for the other people that you are supposedly caring about. This is of course ludicrous garbage to soothe the cognitive dissonance of the morally bankrupt who are not courageous enough to really understand what they are. It's also not smart business.

Edited June 6, 2022 by Celery Man

[DigglerontheHoof 21,065]

If the wealth disparity gap in this country continues the next 25 years as it has the last 40, the U.S. will be Mexico by 2050...perhaps sooner.  But, we'll be a full on fascist state by then so wtf cares. 

[TwiceHorn 31,283]

9 hours ago, Brisketexan said:

It’s not that simple. EVERY business exists to make money. My business does. Where it falls apart is when the business, and the people running it, forget that they and the business are part of a community. I know an old lawyer who talked about the business of his law firm and said “80 families depend on our firm doing well.” And he was proud of that. He took it seriously. Yes, he did well, but he knew that his business meant a livelihood for a lot of other people, and he took that seriously and was proud of it. It was a choice he made. Businesses should make that choice. A business can be both profitable and a good member of the community.

It is technically true, but it's been "exclusively for the benefit of shareholders (and officers and directors)."  

As noted in the article, corporations such as GE operated more for the benefit of all stakeholders without suffering piles of fiduciary litigation for decades.

Also, ownership of a common share of a corporation generally entitles the shareholder to an aliquot share of the asset value of the business upon breakup or other dissolution event.  Generally speaking, it doesn't entitle the shareholder to dividends or growth in value of the stock.  Share price is increasingly disconnected from the actual asset value of the company.  So, if you want to be strict about the "fiduciary duty to shareholders," it's the book value portion of share price that is of concern, not the "fluffy" part that disappears upon a breakup or dissolution event.  And that would require a much longer view on the part of management and directors.

Edited June 6, 2022 by TwiceHorn

[bullzak 412]

Welch couldn't get away with all the accounting nonsense now. Beating estimates by a penny every quarter through cookie jar accounting, etc. That paved the way for present recognition of prospective future earnings [Enron].

But no discussion of this is complete without all the greenmail incidents of the early 80's all in the name of shareholder value. Destroyed a lot of companies. Maybe they needed to be put down but that search for efficiencies or as our McKinsey friends [fuck them] call it "synergies" has exacerbated a lot of problems. 

[TwiceHorn 31,283]

28 minutes ago, bullzak said:

Welch couldn't get away with all the accounting nonsense now. Beating estimates by a penny every quarter through cookie jar accounting, etc. That paved the way for present recognition of prospective future earnings [Enron].

But no discussion of this is complete without all the greenmail incidents of the early 80's all in the name of shareholder value. Destroyed a lot of companies. Maybe they needed to be put down but that search for efficiencies or as our McKinsey friends [fuck them] call it "synergies" has exacerbated a lot of problems. 

Yeah, I have a lot of questions about whether the activities of ibankers really enhance anything about the capital markets, other than their own pocketbooks.

[Asithappens 974]

17 hours ago, Celery Man said:

Wouldn’t say “all” and wouldn’t pin it squarely on him but… most and he’s as good as anybody 

Agree. Welch was basically a corporate psychopath. Don't forget the UC economic "gurus" who also preached unfettered free-market shenanigans. 

What's distressing now (to me, at least) is the degree to which these policies are defended, even by those people who are most harmed by those policies. 

[chainsaw 9,838]

Marx is said to have written that capitalism inevitably leads to this out of control spiral.

[Brisketexan 104,628]

24 minutes ago, Asithappens said:

Agree. Welch was basically a corporate psychopath. Don't forget the UC economic "gurus" who also preached unfettered free-market shenanigans. 

What's distressing now (to me, at least) is the degree to which these policies are defended, even by those people who are most harmed by those policies. 

The bolded, so much.  The Welch-caused/accelerated trend lines benefit literally only the wealthiest of the wealthy, and fuck everyone else.  Yet a huge slice of the country defends them to the death, and decries even the IDEA of doing something different as "GODLESS COMMUNISM!"  It's fucking nuts.

The very same people who shout "MAKE AMERICA GREAT AGAIN!" (some of it understandably; see the decline in middle class opportunity) also decry the very things that are necessary to help revive the thing they claim to miss the most.  

20 minutes ago, chainsaw said:

Marx is said to have written that capitalism inevitably leads to this out of control spiral.

Marx was both right, and had a huge blind spot for the exact same flaw in communism.  Any economic system will fail if it fails to fully account for and mitigate against human nature.  Communism -- a lovely, utopian theory, by the way -- gets smashed on the rocks of human nature when put into practice (ambition and greed are real....there's a reason that every state attempt of "communism" has ended up with wealthy elites eating caviar while the masses farm potatoes and such).

Capitalism's strength is that it allows for and harnesses human nature -- ambition and greed.  But the "harnessing" is key.  To function, and not become a snake eating its own tail, it has to be sufficiently regulated, both as a matter of law and as a matter of social mores and pressures.  Capitalism in the US today is utterly untethered from both.  It has become functionally unregulated, and as noted above, not only is the social pressure gone, it's actively attacked and denigrated.  The concept of "maybe you should run your enterprise in a way that benefits multiple layers, including your employees and your community" is not just not valued, the mere suggestion subjects you to relentless attacks as "un-American commies."  We are consuming ourselves.  That can never end well.

[Blotto 23,434]

13 minutes ago, chainsaw said:

Marx is said to have written that capitalism inevitably leads to this out of control spiral.

perhaps, but I am of the belief that all economic systems are prone to corruption and failure without sufficient oversight and regulation. Capitalism isnt some can't lose, "set it and forget it" economic panacea. If you don't have guardrails in place to keep the wealthy and powerful from exploiting the masses for their benefit, they will do just that. We have just done a shitty job over the last 50 years establishing and enforcing those guardrails.

I laugh at all the trendy speaking points about the evils of government "regulation", as if regulation as a concept is inherently bad. We definitely struggle to stay in the sweet spot between too much regulation and not enough. There's a reason we have regulations on the books about price gouging, price fixing, etc... and its not because all of the corporate stewards in this country are devoted to the capitalist ideal of "an economic system in which private actors own and control property in accord with their interests, and demand and supply freely set prices in markets in a way that can serve the best interests of society"

[Macanudo 12,928]

3 minutes ago, Blotto said:

We definitely struggle to stay in the sweet spot between too much regulation and not enough. 

I'm going to have to call bullshit on this.   We used to struggle.   The Right has seen to it that unfettered greed has taken hold.

I also think that the beginning of the LBO era of the early 80's (and still ongoing) also had a lot to do with where we are now.   

[Brisketexan 104,628]

8 minutes ago, Macanudo said:

I'm going to have to call bullshit on this.   We used to struggle.   The Right has seen to it that unfettered greed has taken hold.

I also think that the beginning of the LBO era of the early 80's (and still ongoing) also had a lot to do with where we are now.   

Correct.  The Robber Barons of old were pikers, because they just exercised raw power and did what they wanted, damn the people.  The modern crew has managed to co-opt a huge swath of the country (ironically, mostly the exact people who should be OPPOSING this shift) into supporting their efforts as a matter of blind nationalism, "anti-communism," etc.  It's your patriotic duty to make sure we have anarcho-capitalism!

Think about it.....they've actually managed to turn the very term "anti-fascist" into a pejorative.  Again, it's just fucking nuts.

[Neonmoon 38,127]

1 hour ago, TwiceHorn said:

Yeah, I have a lot of questions about whether the activities of ibankers really enhance anything about the capital markets, other than their own pocketbooks.

My favorite part is when the gamblers argue that gambling is an essential part of the banking business. 

[chainsaw 9,838]

1 hour ago, Blotto said:

perhaps, but I am of the belief that all economic systems are prone to corruption and failure without sufficient oversight and regulation. Capitalism isnt some can't lose, "set it and forget it" economic panacea. If you don't have guardrails in place to keep the wealthy and powerful from exploiting the masses for their benefit, they will do just that. We have just done a shitty job over the last 50 years establishing and enforcing those guardrails.

I laugh at all the trendy speaking points about the evils of government "regulation", as if regulation as a concept is inherently bad. We definitely struggle to stay in the sweet spot between too much regulation and not enough. There's a reason we have regulations on the books about price gouging, price fixing, etc... and its not because all of the corporate stewards in this country are devoted to the capitalist ideal of "an economic system in which private actors own and control property in accord with their interests, and demand and supply freely set prices in markets in a way that can serve the best interests of society"

My philosophy is pretty simple: socialism for needs, capitalism for wants

You need: shelter, rest, food, water, medicine and medical supplies, healthcare, emergency relief, basic education, job training, transportation, a defense force to repel hostile invasions (see Ukraine), and caregiving (kids, olds, infirm). Maybe other things too, but you get the idea.

You want: a vacation house on the beach, the best meals, the longest and fanciest vacations, boob jobs and facelifts for the mistress, a degree in gender studies and underwater basket weaving, a BMW, a PS5 in every room....the list goes on.

Call it "socialism" but I think all the needs should be taken care of with the mutual wealth and efforts of the population. Those basics plus a universal basic income. We have more than enough to do this, already, and there's no moral justification for withholding it. There's the argument that nobody will want to work, but if "free to play" video games are any indication, most people are going to want more than the default options. People want to work, but they don't want to be disrespected or exploited. If workers always have the option to quit (not just in theory but in fact) you will see morale and productivity go way up.

There will be some people who decide not to work at all. You know what? Good. Those people you don't want around your workplace, anyway. Many of those people are lifelong fuckups who are a liability and probably should be paid to stay the fuck away from anything important. Bonus if being taken care of keeps them away from committing crimes.

"Socialism" can coexist with markets. Think about a farmer who trades grain to a handyman in exchange for some carpentry work. That's a mutually beneficial transaction that doesn't concretely harm any third party. The farmer can accept cash, and so can the carpenter. The 90% of people who decide to work even though their basic needs are being met, they will be compensated with cash, and they can use that cash to buy goods or services.

Call that "capitalism" if you want. What I don't want and what I think is harming everyone is an economy that consists primarily of people buying things most people cannot afford and selling them (or holding onto them) for obscene profit, which are transactions that are often concretely detrimental to everyone else. One example of this is private equity fucking up real estate markets (Dallas, Austin, etc.). Under my philosophy, these transactions would be illegal. There also would be an upper limits to wealth and no loopholes.

There will be some people who decide to leave the US and renounce their citizenship. You know what? Good. Those people are a net negative to society, and their wealth would not be allowed to follow them out of the country and immediately becomes ours.

Like any other system, corruption is possible. You could try and have a system of "checks and balances" but every corrupt country has those on the books, and we also have those on the books, and a lot of good they seem to do. I don't pretend to have all the answers, but I do know that this is primarily a human nature problem and not something that the US and EU and their contemporary brands of capitalism are capable of solving.

We gotta fix this shit though.

[F250 28,691]

1 hour ago, Brisketexan said:

The very same people who shout "MAKE AMERICA GREAT AGAIN!" (some of it understandably; see the decline in middle class opportunity) also decry the very things that are necessary to help revive the thing they claim to miss the most.  

Well, they follow a herpes sore that was a byproduct of the very culture that led to their demise.

[tx 3 putt 76,400]

GE has plagued my industry with the worst people / managers you can imagine. I've yet to meet one that was half way worth a shit 

[TwiceHorn 31,283]

7 hours ago, tx 3 putt said:

GE has plagued my industry with the worst people / managers you can imagine. I've yet to meet one that was half way worth a shit 

Well, that's Jack Welch's GE, not the good old GE.  Hardly anyone that was an employee of GE when it was a pretty sterling example of American industrialism is even alive, much less in the workforce.

Now, like all idealization of the 1950s, GE probably wasn't quite the saintly corporation it and the article make it out to be.  But the sheer fact that they would talk about those things cited by the article to their investors is pretty remarkable.

[GhostOfTomJoad 9,308]

My company was briefly run by a Welch disciple in the early aughts. He followed Neutron Jack's play book to the letter: cut 10% of the work force, force six sigma down everyone's throats, organize businesses as silos, cut costs at the expense of quality, etc. And he imported several other GE acolytes to execute the plan. The only thing that mattered was share holder value. And massive bonuses and stock options at the executive level.

Fortunately for the company we only had to endure him for about 5 years until he went off to do his worst at another company. If there was a positive thing about the experience it's that the BoD realized that they'd been hoodwinked into hiring a sexy candidate, not the most qualified. And admittedly there was some dead weight that needed trimming. But the GE way that was invoked was to use a chainsaw vs a scalpel.

[BrickHorn 18,194]

22 hours ago, chainsaw said:

Marx is said to have written that capitalism inevitably leads to this out of control spiral.

You know, Nietzsche says out of chaos comes order.

[TwiceHorn 31,283]

 

8 minutes ago, BrickHorn said:

You know, Nietzsche says out of chaos comes order.

Carnot, Clausius, and Newton disagree.

[Nice Guy Eddie 13,414]

I'm a strong believer of the power of capitalism but I'm also far from the types that believe the free market solves all issues. 

Free market flaws: We have capitalistic types here on Surly that argue against environmental or wage laws because they feel that if a company destroys the environment or if they're paying $1/hour that in the long run the companies will fail. While I agree in the abstract, isn't it in the interest of society to prevent these occurrences in the first place?

[TwiceHorn 31,283]

9 minutes ago, Nice Guy Eddie said:

I'm a strong believer of the power of capitalism but I'm also far from the types that believe the free market solves all issues. 

Free market flaws: We have capitalistic types here on Surly that argue against environmental or wage laws because they feel that if a company destroys the environment or if they're paying $1/hour that in the long run the companies will fail. While I agree in the abstract, isn't it in the interest of society to prevent these occurrences in the first place?

I guess the argument against this would be that regulations that prevent the socialization of externalities raise the cost of doing business for all, not just the offenders.

But the notion that abusive companies will eventually fail assumes perfect information available to consumers and rational behavior on the part of consumers.  That is, it assumes that the consumers know the company is abusive and will take their business elsewhere as a result.

I'm not sure we can count on those factors, particularly in the timeframe necessary to avoid disaster.  Free/cheap shit army and all.

[Nice Guy Eddie 13,414]

26 minutes ago, TwiceHorn said:

I guess the argument against this would be that regulations that prevent the socialization of externalities raise the cost of doing business for all, not just the offenders.

But the notion that abusive companies will eventually fail assumes perfect information available to consumers and rational behavior on the part of consumers.  That is, it assumes that the consumers know the company is abusive and will take their business elsewhere as a result.

I'm not sure we can count on those factors, particularly in the timeframe necessary to avoid disaster.  Free/cheap shit army and all.

Yeah. I guess in fairness both sides of the argument will focus on the extreme behavior on the opposing view and want to ignore bad behavior on their side as an aberration.

[Brisketexan 104,628]

43 minutes ago, TwiceHorn said:

I guess the argument against this would be that regulations that prevent the socialization of externalities raise the cost of doing business for all, not just the offenders.

But the notion that abusive companies will eventually fail assumes perfect information available to consumers and rational behavior on the part of consumers.  That is, it assumes that the consumers know the company is abusive and will take their business elsewhere as a result.

I'm not sure we can count on those factors, particularly in the timeframe necessary to avoid disaster.  Free/cheap shit army and all.

The notion of "the market will take care of it" is breathtakingly dumb, and ignores human nature.

Shit, let's look at something more important than money -- survival.  If we had a "the market will take care it it" attitude to traffic safety, we wouldn't have speed limits or laws against reckless driving, because after all, a rational actor will drive safely in order to preserve his own life, right?  Right?  We all know THAT is bullshit, but we somehow thing that Bad Actor Inc. won't save gobs of money by dumping its waste directly into the river because.....what, we think the CEO might be shamed at the next neighborhood cocktail party?  Shit, he doesn't live anywhere near that river anyway.  And the consumers who can buy Bad Actor, Inc's gadget for $9 instead of the $10 its non-polluting competitor charges will reward Bad Actor, Inc. for its polluting ways.

As always, and as with any law or rule, there's a balance to be struck.  It's why we have speed LIMITS, not "no driving at all" (which would guarantee safety, at the cost of all utility), and not "no traffic rules at all" (which would sacrifice safety completely).

Oh, and when you couple the anti-regulation approach with "tort reform" that takes away the guardrail of injured third parties holding a bad actor directly responsible for harm caused to them, then you have functionally zero accountability.

As for experience, I can at least give it to you anecdotally.  The Oil Pollution Act and Clean Water Act were passed at the beginning of my childhood.  I remember going to the beach at Galveston and having to wipe tar off of our feet (tar balls created by sloppy oil transfer practices and such in the ship channel and offshore).  40 years later, at the beach with my kids for the umpteenth time, my daughter commented on a tiny black spot on her foot.  I told her it was tar, and she kinda freaked.  My wife and I then commented that holy shit, our daughter was 10, and it was the first time she'd seen tar on the beach.  The OPA succeeded in changing behavior, for the better, for all of us.  Regulations can work, and work for the benefit of all (externalities).

We don't trust individuals to just "govern themselves morally, it will all work out" -- if we did, we'd have zero criminal laws.  I am baffled why we think that approach will work for businesses run by those exact same human beings who we have to regulate with criminal laws.

[Neonmoon 38,127]

14 minutes ago, Brisketexan said:

The Oil Pollution Act and Clean Water Act were passed

Think about this. 

The Oil Pollution Act of 1990

It took ONE year after the Exxon Valdez oil spill (March 24, 1989) to pass the Oil Pollution Act of 1990 (August 18, 1990). The act didn't stop the production of oil, or even the transportation of oil. It enforces liability for cost of cleanup and damages. 

Now...imagine that kind of action after kids getting shot in the face with AR-15s. 

 

[Texas Jeff 1,932]

perhaps, but I am of the belief that all economic systems are prone to corruption and failure without sufficient oversight and regulation. Capitalism isnt some can't lose, "set it and forget it" economic panacea. If you don't have guardrails in place to keep the wealthy and powerful from exploiting the masses for their benefit, they will do just that. We have just done a shitty job over the last 50 years establishing and enforcing those guardrails.
I laugh at all the trendy speaking points about the evils of government "regulation", as if regulation as a concept is inherently bad. We definitely struggle to stay in the sweet spot between too much regulation and not enough. There's a reason we have regulations on the books about price gouging, price fixing, etc... and its not because all of the corporate stewards in this country are devoted to the capitalist ideal of "an economic system in which private actors own and control property in accord with their interests, and demand and supply freely set prices in markets in a way that can serve the best interests of society"

O

[Texas Jeff 1,932]

LL

[Incredulity 11,555]

5 hours ago, Nice Guy Eddie said:

We have capitalistic types here on Surly that argue against environmental or wage laws

show your work.

[David Dennison 18,660]

18 minutes ago, Incredulity said:

show your work.

Oh, so you support minimum wage laws?

[Incredulity 11,555]

2 minutes ago, David Dennison said:

Oh, so you support minimum wage laws?

Certainly.   

And, they absolutely cause prices to increase.  

[David Dennison 18,660]

Just now, Incredulity said:

Certainly.   

And, they absolutely cause prices to increase.  

Get some of that cash out of the system. Tax the rich. A lot.

[Incredulity 11,555]

1 minute ago, David Dennison said:

Get some of that cash out of the system. Tax the rich. A lot.

[David Dennison 18,660]

Call me crazy, but I'm pretty sure we can figure out a way to control inflation while making sure the working class is paid a living wage. It might require some heavy regulation and taxation on the top end, but let's give it the ol' college try.

Oh, who am I kidding? This is America. We'll never ask capital to sacrifice for the greater good. Silly me.

[Nice Guy Eddie 13,414]

22 minutes ago, David Dennison said:

Call me crazy, but I'm pretty sure we can figure out a way to control inflation while making sure the working class is paid a living wage. It might require some heavy regulation and taxation on the top end, but let's give it the ol' college try.

Oh, who am I kidding? This is America. We'll never ask capital to sacrifice for the greater good. Silly me.

Don't you understand. Take money from the top 1% and every job will dry up. Give the top 1% tax breaks and more jobs will be created.  (zero evidence has ever been produced backing up this lie)

[Tuco 5,076]

On 6/7/2022 at 5:34 AM, GhostOfTomJoad said:

My company was briefly run by a Welch disciple in the early aughts. He followed Neutron Jack's play book to the letter: cut 10% of the work force, force six sigma down everyone's throats, organize businesses as silos, cut costs at the expense of quality, etc. And he imported several other GE acolytes to execute the plan. The only thing that mattered was share holder value. And massive bonuses and stock options at the executive level.

Fortunately for the company we only had to endure him for about 5 years until he went off to do his worst at another company. If there was a positive thing about the experience it's that the BoD realized that they'd been hoodwinked into hiring a sexy candidate, not the most qualified. And admittedly there was some dead weight that needed trimming. But the GE way that was invoked was to use a chainsaw vs a scalpel.

My former company, Vickers, was fucked by a Welch disciple, John Weber, back in the 90s.  Weber ended up hiring a bunch stooges from Texas Instruments, probably because Vickers couldn't afford more GE pricks.  The place was such a fucking shit show.  There is something so galling about undeserved arrogance coupled with utter incompetence.  I remember the plant manager hired an engineering manager, based on sitting next to him on a plane.  The engineering manager turned out to be a complete conman, who lied about his education and experience.  He ended up getting escorted out by police and left he company with several sexual harrassment suits. Fuck or fired type harassment. 

The perfect conclusion to this shit show was Weber getting a feature piece in the Wall Street Journal.  The final line: "We've broken all the china," Mr. Weber says. "Now we've got to get it glued back together." Within two weeks Weber took a CEO position with a smaller company, leaving a wake of broken china. Vickers was sold to Eaton shortly after.  My plant, which typically ran around 1100 employees, was closed.  I didn't know him, but there was one guy who ate a shotgun over it.  I was one of the last 5 employees in the joint.  Definitely left a mark. 

I don't blame Welch for any of that.  I don't blame corporate greed.  I don't have much respect for Welch.  He figured out how to make a languishing electronic-heavy equipment company profitable during a technological revolution.  Sure, that's not easy, but is it really that hard? He didn't invent shit.  He didn't start shit.  But I will give him credit for being competent.  And, as an employee who has been negatively impacted by gross incompetence, competence is important.  When talking about corporate leadership, I will take a competent asshole over nice moron.  Unfortunately, it is frequently just an incompetent asshole, and that's the real problem. 

I will throw blame towards the corporate/media circle-jerk that deifies folks like Welch, and pushes the idea that leaders are just better for being around him. I think the more likely dynamic is that people who leave very successful companies do so because their advancement is not in line with their ambition.  The belief about a disciple is generally "he must have learned a lot from Welch."  Maybe instead it should be "Welch must not think that much of him."  Right now, Tesla is the new GE.