4/30/2009

The Mess We're In

In 1980, Ronald Reagan ran a campaign based on repeating "there you go again" whenever Jimmy Carter brought up the spectre of reality vs. Ronny's "magic of the market" mantra. Reagan won and Americans headed down the path of consistently choosing fantasy over reality any time the option was presented. A nation of ostriches with our feathered necks stuffing our heads into the sand on practically every vital issue that presented itself for the next 28 years. I hate to consider the possibility that my country may be mostly populated by cowards and fools, but 8 years of Reagan and 12 years of Bushes presents a lot of evidence. Maybe "mentally lazy" would be a more generous label, but generous or not we probably don't want to spend a lot of time looking into the mirror. Our outsized porportion of supertitious types is a sad indicator, too. The things we, as a culture, believe in are indications of our deterioration.

Belief in or a desire for magic, for example, is always a bad sign.

A lot has been made of the dying of the "traditional media." It appears that newspapers and even the major networks have lost their means of support; advertising and readership. We are told that this is a disaster for our democracy. The real disaster occurred about 28 years ago, when Reagan and his FCC Commissioner, Mark Fowler, set out to deregulate the communications media under orders from the robber barons who wanted to consolodate the national media into the hands of a few huge corporations. They got what they wanted, every one of those characters walked away with wealth and power beyond belief, and the country got an advertising-based, public service and investigative journalism-free, media that lost its value to the democracy and trivialized itself into Faux News values.

I think it is safe to say that any business that forgets its core purpose is doomed, eventually, to history. The reason the media exists is to provide vital information about important issues to the society. When media becomes simply entertainment, it also becomes disposable.

GM, GE, and a host of once-great American manufacturing companies fell to the same short-term thinking. They saw easy money in finance, especially unregulated finance, and tossed off their core business in exchange for a fast buck. Since minimal skill was required for the fast buck, their expertise withered to accounting and legal functions, leaving them to blow in the winds of luck and ignorance. Luck always runs out and ignorance is a poor defence. Characters like Jack Welch ran their companies into the ground, stripping off functional portions of the business to prop up the phony finance business, until the company was down to its birthday suit and it was impossible to hide the invisible quality of the king's new suit.

Why are today's businesses and business "leaders" so much less prepared for reality than the very same companies of a few decades back? Competition, mostly. Once, our lazy, incompetent corporate management class could exist because nobody did that job better. In the 1970's, Japan showed up with hard-working, quality-driven, technically competent, humane management and we thought the world was ending. One world was; the American manufacturing world. Kicking Europe's ass was easy, because as bad as our management class had become Europe's was even worse. After the Japanese invasion into the world of manufacturing, the clock was ticking on the demise of American leadership in the practical world of building products.

The only manufacturing areas where American companies could still compete were socialized; munitions and medicine. Without the assistance of the taxpayer, American manufacturing had to be shipped off-shore to compensate for over-priced, untalented American corporate management.

The solution was magic; magical finance and magical marketing.

As usual, this was a short-term solution. For magical finance to work, the financial system had to be "deregulated" (the politispeak word used for "let the buyer beware"). Rules that had kept the banking mobsters in check since their last swarm of corruption in the 1920's had to be quietly eliminated. The regulators who kept a thumb on the games finance swindlers love to play had to be intimidated into retiring or silence. Entire departments, especially in the SEC, were downsized until they were impotent. Twenty years later, we see the result but we don't see that the people who created this system were rewarded and are perfectly happy with the system they have created and the culture they may have destroyed.

As for marketing, the first thing out the window when times get tough is unproductive marketing activities. No other department in a business has less connection to profitability or a closer connection to waste. After 40 years in business, I'm still waiting to see my first bit of confirmation that any activity by a marketing department justifies the expense of that department. After 20 years of shifting the purpose of television news services and newspapers to the sole function of marketing products, those industries are discovering that pointless fluff is an unnecessary luxury. In hard times, luxury doesn't even get a seat on the bus.

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