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 paneled offices and crying in their parked private jets.
And they should. Golly, would you expect to keep your job if, as in the case of Wagoner since 2004, the company you ran lost $82 billion, had its market share hacksawed from 33 percent 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?
Hey, only Wall Street bankers and Capitol Hill lawmakers can sport such a sorry record and still keep their jobs. You, me — and now, Wagoner — couldn’t.
On the bright side, 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.
Johnson, most recently the chief economist for the International Monetary Fund, knows what he’s writing about; he swept up similar heaps of hubris around the world — Ukraine in 1994, Indonesia in 1997, Russia in 1998.
Oligarchs the problem. 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 — and, most of the time, genteel — oligarchy, running the country rather like a profit-seeking company in which they are controlling shareholders.”
Sometimes, explains Johnson, now a professor at MIT, the partnership brings benefits: jobs, a growing economy, political stability. Sooner or later, though, “these masters of their mini-universe” will “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.”
We know it well. 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 deja vu.
Farmers and ranchers already know the costly consequences of agbiz oligarchs dictating farm and food policy through the disguises of campaign cash, 24/7 lobbying and revolving-door jobs.
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 percent of the slaughter, the top three soybean crushers 80 percent…) ensured global seed and fertilizer oligopolies and mostly watched as rural communities, as measured by health care, unemployment and poverty, fade.
Fire them all. The best chance to regain our nation and economy, suggests Johnson, is to fire oligarchs. And, he adds darkly, “Let us hope it not then too late.”
He’s right. 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.