THE DEGREE TO WHICH U.S. PUBLIC OPINION CAN BE MANIPULATED—TO THE POINT OF CONTROL—IS NOTHING SHORT OF REMARKABLE.
EVEN NOW, AFTER THE GREAT RECESSSION, BANKS ARE STILL REGARDED FAVORABLY (ALBEIT ONLY ‘SOMEWHAT’) BY 58 PERCENT
I’M INCREDULOUS! THAT IS A TRULY MIND-BOGGLING FINDING!
Short of attacking Pearl Harbor, it appears U.S. Banks can get away with almost anything.
Big Health Insurance, Big Drug, and Big Oil are not so lucky.
Overall, I’m far from sure the American public is content with the current American Business Model. They have certainly no reason to be.
Factor in inflation, and typical household earnings have scarcely increased since the 70s. By global standards, that is impressively awful—because costs have increased.
As far as most Americans are concerned, the U.S. economy is in decline.
Public opinion is a peculiar thing. Though research into it, for a whole host of reasons (primarily political and commercial) has become extremely sophisticated—and market researchers normally get it broadly right, it still seems to be possible for the public mood to swing suddenly—and for unexpected consequences to occur.
Here, I am talking about mass protests, rioting, and other manifestations of rage which could extend to outright violence—including some kind of sustained organized hostility (better known, if it is spread over time, as a revolution).
Mind you, I am not entirely sure that such a degree of dissension would be possible in such such a highly controlled, surveilled, and policed society as the U.S—but it seems to me that something has to give—sooner or later.
My underlying point here is that there seems to be a great deal of underlying dissatisfaction with the U.S. economic system right now (what I call the American Business Model) and, though on the surface, things seem to be reasonably calm, I have to wonder whether they could not go badly wrong in a hurry.
Yet Big Business, which I suspect would be the primary focus of any outbursts of righteous indignation, seems utterly unconcerned.
- It is becoming increasingly monopolistic to a degree that is seriously alarming.
- Share buybacks, despite a fair amount of adverse publicity, continue at record levels.
- We have statistical full employment (5 percent) yet household earnings are in decline in real terms. That defies economics as it is taught and generally understood.
- Income and wealth inequality continue to increase.
There have been some small concessions on wages, but nothing has fundamentally changed. The ultra-rich go on getting richer, and steadily increase their grip on the political system; money in politics gets ever more blatant; the political choices get ever more horrific; and the economic plight of most Americans continues to deteriorate.
It seems to me that at some time there will have to be some sort of reassessment of the American Business Model, because surely it is better to modify it intelligently (as much of the rest of the world has already done with great success) than to continue to engage in what adds up to an economic civil war.
It’s madness—and, individuals apart, the country, as a whole, is paying a terrible price.
I find it interesting that the eponymous Seth Godin has joined the fray. Here is a man with his finger on the pulse—if anyone does. Or do I mean ‘trigger’ rather than ‘pulse?
This is Seth’s piece.’ As always, he argues it well.
What are corporations for?
The purpose of a company is to serve its customers.
Its obligation is to not harm everyone else.
And its opportunity is to enrich the lives of its employees.
Somewhere along the way, people got the idea that maximizing investor return was the point. It shouldn't be. That's not what democracies ought to seek in chartering corporations to participate in our society.
The great corporations of a generation ago, the ones that built key elements of our culture, were run by individuals who had more on their mind than driving the value of their options up.
The problem with short-term stock price maximization is that it's not particularly difficult. If you have market power, if the cost of switching is high or consumer knowledge is low, there are all sorts of ways that a well-motivated management team can hurt its customers, its community and its employees on the way to boosting what the investors say they want.
It's not difficult for Dell to squeeze a little more junkware into a laptop, or Fedex to lower its customer service standards, or Verizon to deliver less bandwidth than they promised. But just because it works doesn't mean that they're doing their jobs, or keeping their promise, or doing work that they can be proud of.
Profits and stock price aren't the point (with customers as a side project). It's the other way around.