Former General Motors boss Rick Wagoner evidently did not understand the meaning of the biblical admonition of those who live by the sword often die by it.
It’s easy to see why. Detroit has owned Washington, D. C. for, well, forever: no increase in car mileage standards since the Pinto; no new fuel technologies since Henry Ford poured ethanol into his Model A; gazillions for interstates, peanuts for public transportation.
Now, however, the roles are reversed and Washington owns most of Detroit. As such, the auto oligarchs are shaking in their wood-panelled offices and crying in their parked private jets.
And they should.
Would you expect to keep your job if the company you ran lost $82 billion since 2004, had its marketshare hacksawed from 33 per cent to 18 and its stock price from over $70 to $4 while the biggest brainstorm you had to quell the growing calamity was the Hummer?
Only Wall Street bankers and Capitol Hill lawmakers can sport such a sorry record and still keep their jobs.
President Obama’s canning the GM chief should give us a hope that he might have the courage to reverse the Big Biz takeover of government that makes you and me mostly powerless, and increasingly poor, functionaries of that buyout rather than individual owners of a shared democracy.
Indeed, writes Simon Johnson in the May issue of The Atlantic, America’s future lies with bold, new leaders pushing Washington to clean up the mess it helped create. (The story is at http://www.theatlantic.com/doc/200905/imf-advice.)
Johnson, most recently the chief economist for the International Monetary Fund, has swept up similar heaps of hubris around the world – Ukraine in 1994, Indonesia in 1997, Russia in 1998. The common thread to all the financial near collapses, he notes, was “oligarchs.”
“Typically, these countries are in a desperate economic situation for one simple reason – the powerful elites within them overreached in good times and took too many risks.” The government “and their private-sector allies commonly form a tight-knit oligarchy, running the country rather like a profit-seeking company in which they are controlling shareholders.”
Sooner or later “these masters of their mini-universe start making bigger and riskier bets. They reckon – correctly, in most cases – that their political connections will allow them to push onto the government any substantial problems that arise.”
While this is creepily similar to today’s Wall Street debacle, to anyone even half-awake in agriculture the last 20 years it’s just déj vu. Farmers and ranchers already know the costly consequences of agbiz oligarchs.
The oligarchs and their government partners have pushed market risk onto taxpayers (direct farm program payments averaged $9 billion per year in the early 1990s, since 2002, $15.6 billion); largely eliminated antitrust enforcement (the top four beef packers now control 83.5 per cent of the slaughter, the top three soybean crushers 80 per cent…) ensured global seed and fertilizer oligopolies and mostly watched as rural communities, as measured by health care, unemployment and poverty, fade.
The best chance to regain our nation and economy, suggests Johnson, is to fire oligarchs. And, he adds darkly, “Let us hope it is not then too late.”
He’s right; Wagoner ‘em and their Capitol Hill partners. Good grief, the folks who created this mess – and got rich doing it – won’t lead us out of it. Just ask a farmer or rancher.