James Surowiecki, “Private Equity.” Yes, it’s as bad as we think it is. See also Krugman’s comment:
They make one especially keen point: if it were really about adding efficiency, why do the same people lead takeovers in many industries, instead of people with specific expertise in each industry doing the job? Their answer is that these specialists are specialists in deal-breaking, not value creation.
This takes me back to my theory of What’s Gone Wrong With American Business. I wrote awhile back:
In my experience, CEOs rarely come up through the ranks of production, manufacturing or engineering. They come from finance, advertising, marketing. They make decisions about money, sales, acquisitions. Often they have only a vague idea how the products their company sells actually get made. Nor do they care. As a rule they don’t deal with employees below the upper management level. Often they aren’t even that bright; they’re just really aggressive and narcissistic and intimidate everyone around them into obedience. Their success often depends on the quality of the staffs they assemble around them who take care of the details, like actually managing.
The money guys not only don’t care how the products get made; they have no respect for the processes and skills required to get products made. This means they honestly don’t see any difference between managing a fruit company or an automobile company or a toothpaste company. “Making things” is what the little faceless drones in the office cubicle hives do, and one office full of faceless drones is just like another to the big shots.
See also Steve Kornacki, “When a Party Flirts With Suicide.”
Update: Following up the Rand Son of Ron airport issue mentioned in the last post — Steve Benen says Rand was on his way to Washington to speak at the annual “March for Life,” also called the March to Criminalize Abortion and Turn Women Into Cows. Steve says,
Hmm. So, Rand Paul, always cautious about his privacy rights, balked at airport security measures. He was en route to a March for Life rally, where he’ll speak to activists who don’t believe there is a right to privacy.
Libertarians sure are an odd bunch.
Son of Ron was able to take another flight.
Well, look on the positive side.
If these sociopaths and psychopaths didn’t have ‘Vulture Capitalism,” they’d be chopping up male/female hookers after torturing them, and keeping their heads in the fridge, as momento’s.
This way, people are unemployed, not brutally tortured and murdered.
Your comment, “CEOs rarely come up through the ranks of production” is so true. I recall that in the early eighties, I was taking an independent study course (I was an accounting major) and I was evaluating General Motors. By that time, all the ‘car’ guys that had made cars that people had salivated over, such as Billy Mitchell and Zora Arkus-Duntov had retired. These were guys from the 40s and 50s that were instrumental in making what we now call classics. Well, they were gone and the bean-counters were in charge and GM had a long slide down hill.
That seems to always happen to companies these days, once the generation with hands-on experience moves on. In a few years we’ll all be saying what a shame it is Apple can’t make good products any more.