Thursday, April 02, 2009

GM CEO's Out. His Largest Failure In The World Of Crony Capitalism And Government Complicity? He Wasn't A Big Dog In The Club.

We have been critical of Rick Wagoner's lack of transformational accomplishment at GM since starting this blog. It is long overdue that Wagoner turn over the reigns at GM. GM management has done nothing but cut wages, fire hundreds of thousands of employees and lose market share every year for over thirty years. Every single year.

Many are yammering that Wagoner's removal is government is meddling in private business or free markets. Ludicrous. A bankruptcy proceeding would be substantially more harsh. And that is where GM was headed. All the government did was exactly what the courts would have done. When the people of this country are bailing out executives making tens to hundreds of millions of dollars, it is a foregone conclusion management change is necessary. We can wax about glorious times gone by as dumbasses (often referred to as board members) of GM have done for decades or we can face reality with a new strategy. New strategies require new thinking. New thinking requires new management. We, the people, are the primary shareholders in these takeovers and should act as such. The calls of this being socialism are so terribly silly. It was socialism that required government involvement in these mega corporations in the first place. Corporate socialism that is. While the sovereign were told it's the way of the market re pay cuts or defaulted pensions or dropped health insurance.

It's a sign of moral bankruptcy in Washington that Wall Street CEOs who have made exponentially larger mistakes than GM are still in power. It was Wall Street that actually drove GM over the cliff. And, Wall Street CEOs actually paid government officials for the right to make their mistakes. Isn't that what lobbying is? Paying for favors? Wall Street CEOs are still executing strategies that are jeopardizing our financial system as I write this. Yes, we are still paying these buffoons to run companies whose business models continue to create future crises courtesy of the lack of serious government initiative to reform our financial system.

In the world of crony capitalism and corporate socialism, it's better to have friends in high places than to actually have business talent. Just ask Citigroup, Bank of America, JP Morgan or Goldman Sachs.

Lesson learned? The most important skill required to succeed in the American economy isn't the skill of business or machine tool technician or doctor or brick layer or engineer or any other particular talent. It's not about getting a college degree or trade degree or having a craft to compete. It's about being well connected in Washington. Of maneuvering in the club. What Washington has clearly signaled for the last two decades, and that has become glaringly obvious in this environment, is that politicians are for hire. That one should not spend capital investing in the economy. One should invest capital in Washington. For favors. Favors that circumvent competition and economic opportunity in the market. Wall Street is far and away the biggest contributor to lobbyists and political causes in Washington. And, the firing of GM's CEO with no similar actions taken on Wall Street simply reinforces that fact.

The single greatest issue that must be addressed for our economy to recover is transparency and restored accountability to the sovereign. From the antiseptic of daylight and accountability all things flow. Why can't we have publicly aired meetings into the policy making process of the Treasury? While we are at it why not into the future of Iraq policy? Or trade policy which allows corporations to ship jobs overseas at a profit. Or any other government policy decisions? In real time on government televisions stations aired over the internet? For free. These are civil servants not kings and queens. And because our political leaders have appointed themselves kings and queens outside of the light of transparency is the very reason we have this crisis. In fact, it is the source of most every crisis throughout history.

We need increased transparency into our financial system, into bank balance sheets, into shady lobbyist dealings, into opaque government policy decisions and into the seamy decision making process of Washington. Were we to have transparency into government, we would never have seen this environment develop. Ever. Do you see any transparency from the newly elected politicians? Hardly. As we have noted, it's the opposite side of the same coin.

Real change won't happen until we the people make it happen.
posted by TimingLogic at 11:57 AM