I read an interesting editorial by Rance Crain in Ad Age wondering why people haven’t blamed marketing for the financial mess. He makes a claim when business gets sidetracked, things go bad, and the main focus in business is selling things to a specific market.
Things went wrong for Cadillac when they tried an entry level car, things went wrong for our government when we decided to be all things to all people- and then paid the most attention to the customers with the most money- as any business would.
The problem with government is it is supposed to be all things to all people- yet never discriminate between the rich and the poor. That’s the beginning of class war, and if we’re not getting close to one, I’ll be amazed.
NPR has been making a lot of mention how Obama’s approval ratings have fallen in Ohio to under 50% as the unemployed rate rose over 10%.
The joke is Ohio only looks good because we have Michigan in worse shape. Here are some excerpts from the New York Times talking about their cuts- and the lame ideas being floated for those magical “silver bullets” that will save the day:
The cuts started in the 2002 budget year, when some prisoners were ordered to sleep two to a cell. Then came cuts to state colleges in 2003, and orchestras, zoos and operas in 2004. Medical payments for the poor were cut in 2005, followed by cuts to a youth prison in 2006. After that? More cuts — to prisons, crime laboratories, libraries and day care programs.
Last month, 100 state troopers were laid off, and the troopers left behind were told to drive around less to, of course, cut costs.
In all, even before thinking about the coming year’s $1.8 billion shortfall, Michigan’s lawmakers had — through cuts, accounting shifts and tax increases — closed more than $7 billion in budget gaps over the past eight years…
On the revenue side, all sorts of notions have been entertained — Michigan, the new Hollywood? Michigan, the wind turbine state? — even an idea offered in a closed meeting this year by John Engler, the former governor, that Michigan ponder housing detainees from the prison in Guantánamo Bay, Cuba, raising perhaps $1 billion. (Mr. Engler, through a spokesman, declined to discuss the matter.)
Most people tie the state’s lasting fiscal woes to the collapsing auto industry, and by some measures, Michigan seems to be marching backward. While much of the country emerged from a downturn that started in 2001, Michigan never really seemed to do the same.
The wind turbine state? Isn’t it funny that we used to talk about tilting at windmills as an exercise in futility?
The president is right to try to re-engineer health care, for it is the basic welfare of our citizens, rich and poor, to be healthy so that they can contribute to society. However, this may be too little, too late.
The epic fail of our government has been the introduction of lobbyists and the auctioning of power to the elite. Yes, Obama made his way to the White House on the strength of small, $25 donations, but, the rest of the system is still borked. When politicians have to raise millions, they have to sell out, yet you hear nothing about an overhaul of the campaign finance system.
When it comes to how we got into this mess- with the Wall Street Casino busting out and then asking for a bailout, it’s precisely because we allowed the people with money to dictate the laws. Credit default swaps? No amount of rationalization can explain allowing a corporation to buy insurance to pay off on losing bets- it takes the whole model of capitalism and breaks it.
So instead of talking about wind turbines, making movies or slot machines at horse tracks (thank you Governor Strickland for ignoring the will of the people) we should be talking about restoring rationality to the engine of our economy that has made us the consumption capital of the world.
What is rational in business? We had laws for years to stop monopolies because they would eventually be able to artificially control markets. We saw what happened when Exxon made record profits because they were able to fool the market and sell us gas at $4 a gallon.
We saw when banks got so big they were “too big to fail” and then bailed out by us, through our elected government. We all took the hits for their binging on greed when they tricked regulators into allowing the insurance of risk.
We’ve been asked to take pay cuts, to give up on pensions, to work more for the same pay- while we spend money we don’t have as a silver bullet solution to a problem that hasn’t been addressed- what is the real business of government? What should the rules be to keep the playing field level?
Of course, the first step is to stop the auction of political power in this country. It’s time to re-engineer the election process.
The second step is to put some kind of limits on compensation at public companies- so that the pay reflects not just performance, but responsibility. Getting paid $2000 an hour to lose value, then ask for tax dollars, and losing jobs should put you in prison, not the corner office. If you want to be paid insane amounts of money, you either need to be the founder, or take it private, there can be no more pay to CEOs before the shareholders, and there can’t be shareholders who hold stock for less than a year.
The last step is to always ask with public money- is this the best thing we can do with the dollars we collect from a minimum wage paycheck- to serve a minimum wage earner? If we get that right- we’ve got our focus back, because when they are safe, secure, educated and productive- all of us should be able to rest easy (the one caveat is that minimum wage must be able to support a person).
Cadillac was supposed to stand for luxury. Government is supposed to stand for security in society. Right now, Cadillac in bankruptcy looks like it understands its mission better- and because of that, we’re all feeling screwed.
The focus of government is the welfare of all its citizens; we must rise and fall together, or the next war will be here, between the haves and the have nots.