Posts Tagged Bain Capital

Celebrating the Artificial: General Motors and the Skeletons of American Industry

GM is Alive, Government Motors, bailout, subsidy, taxpayerThe Treasury Department is reportedly feeling pressure from General Motors to “sell the government’s entire stake in the auto maker,” a move that, at the moment, would result in an estimated $15 billion loss for U.S. taxpayers. But such are the realities of dysfunctional private-public-private back-rubbery:

GM executives have grown increasingly frustrated with that ownership, and the stigma of being known as “Government Motors.” Executives have said the U.S.’s shadow is a drag on its reputation and hurts the company’s ability to recruit talent because of pay restrictions.

Last week, I explored these tensions over at Values & Capitalism, critiquing the government’s malinvestment in GM as well as the Democratic National Convention’s overt attempt to romanticize such failures:

“GM is alive, and Osama bin Laden is dead,” said President Obama in his recent speech at the DNC. The crowd responded with resounding cheers, energetically waving signs bearing the same slogan. Now, just a week later, bumper stickers are already primed for your Prius.

The problem is: Osama bin Laden is actually dead, and GM has resurrected into a zombie of sorts, fumbling and stumbling about under the control of autocrats—licking its lips for another round of taxpayer flesh.

Yet of all of the tall tales of glorious GM resurrection, the Obama’s administration’s underlying attitudes about human potential are made most clear by none other than Vice President Joe Biden, whose DNC speech rails against the “Bain way” (i.e. the profitable way), arguing that “the Bain way may bring your firm the highest profits, but it is not the way to lead our country from the highest office.”

And there she blows:

Profitability, we are told, should no longer be a priority of the American people. Further, we are told, it shouldn’t be a priority of the United States government. And this is what garners cheers from the ruling party of our nation.

We now live in a country where government-appointed know-it-alls waste tens of billions of taxpayer dollars on failing companies, only to then be hailed as “defenders of industry.” We now live in an era in which viewing government in terms of “balance sheets and write offs” is demonized; in which waste and inefficiency are downplayed; and in which those who pursue economic growth in a traditional sense are viewed as obstacles to human flourishing.

The truth, of course, is that “the Bain way” secures higher profits by discouraging wasteful behavior and drawing on everything that’s good in humanity. It is this—value creation and the reward of earned success—that makes the market much more than a market, empowering us to attain the American Dream.

The market can only be a source for good if it remains a free market: an arena where contributions come before rewards, not after. And the moment Americans forget this—the moment we join this overt celebration of government-subsidized failure—is the moment we start down the road that invariably makes America like every other entitled, vacuous Western democracy, rather than the exceptional nation we’ve always been.

If this is the contrast the Democratic party wishes to draw—a battle between Artificializer Obama vs. Realistic Romney—so be it. Americans will know what they’re buying, and if the pollsters’ current predictions hold true, we’ll get all the skeletons of “industry” and “economic progress” that we ask for.

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