In Praise of Harry Truman
Last March, Richard Syron, former chairman of Freddie Mac, asserted that his primary obligation was to shareholders. We know what happened to Freddie Mac. Today we learn that AIG, despite its difficulties and because of contractual arrangements, is planning on awarding huge bonuses to the very staff that led to its implosion. Firing, apparently, is not an option: The staff that created this chaos remains too valuable.
Another piece if the New York Times lays bare the essence of the problem: “Is It Time to Retrain B-Schools?”
Instead of being viewed as long-term economic stewards, he said, managers came to be seen as mainly as the agents of the owners — the shareholders — and responsible for maximizing shareholder wealth.
“A kind of market fundamentalism took hold in business education,” Professor Khurana said. “The new logic of shareholder primacy absolved management of any responsibility for anything other than financial results.”
And, of course, managers and their hirelings were all too busy lining their own pockets as well.
Shareholders may now have suffered, but the underlying private greed has not relented. Civic responsibility has fled. We have instead the premise that if each man legally pursues his own self-interest, regardless of how extreme that path may be, then all will benefit. Thus we celebrate the likes of Buffet and Gates–and teach our children that great wealth is a sign of God’s favor. We eagerly follow the ups and downs of the stock market. Do we “short” today or do we go “long”? Perhaps we can make a killing in currency exchange. How apt is the word killing. Take a close look at the language of the market: It is a “jungle” out there. Eat or be eaten. But even lions and jackals rarely take more than they can eat.
Economic Darwinism has stripped away everything but teeth and gullet.
We take our companies abroad to maximize shareholder profit. We carefully study the art of economics so that we can maximize profit even as we minimize social responsibility. What becomes difficult to think about becomes merely an exogenous variable, something for others to consider, not for those with an eye on personal profit and shareholder value. If we become wealthy enough, then we can share a small part of our largesse with those upon whose backs we trod.
How do we unravel such twisted logic? We know the logic by many phrases. “Trickle down” is one. Trickle down has become a torrential flow upward. “Privatization” is yet another such phrase, for in that simple word lies justification for the elevation of the individual at the expense of the many. “Free markets” is yet another, as if in unregulated freedom lies the prosperity of the nation, when in fact it is merely sleight of hand for private greed and profit.
“Government is inept” is yet another. Little do we realize that government is what ties us one to another. If we honored and valued it, then it would bring us value. If government service were something more than merely an entree to wealth and power, then we might actually be of service to those around us. And there is nothing wrong with honorable service, or with kindness, or true caring for our fellow workers and fellow citizens.
Instead, we have the revolving lobby door. “You were a former Mississippi senator? Retire early and catch the lobby gravy train.” You were a former President? Your connections are invaluable. Foreign interests will pay well for your influence and advice.” If lobbying is the name of the game, perhaps we should cancel our pension arrangements with former Presidents and senators, indeed with all public servants. Those pensions really are quite lucrative.
But enough is never enough, unfortunately. And we wonder why government has a bad name.
These people do no feel any shame in what they do. They are right at home among their kind. The step into the lobby crowd is considered a step up. Thieves honor one another; he who stole the most has the greatest cache. Of course we never think of a CEO as having any sense of public service. The greater his take the greater our admiration.
I think fondly of Harry Truman; he simply went home. He served.