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The Corruption of Capitalism in America

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Tom Doescher

Tom Doescher

is the subtitle of David Stockman’s book, The Great Deformation. Some of you more seasoned readers may recall the young Grand Rapids congressman who served as President Reagan’s budget director. I remember it clearly because we lost a very senior Plante Moran staff member, who joined Stockman’s staff. Those of you who know me well have often heard me say that I’m a fan of the free market. Well, in this 700-plus-page book, Stockman rocked my world. It continued a theme in my life where I’m realizing that much of what I’ve believed to be factual may not be. Again, my seasoned readers probably get it.

Here are a few of my thoughts:

  1. First of all, this could be a college-level economics textbook; it pushed me to the limits of my personal knowledge.
  2. Stockman has an enormous vocabulary or a Ph.D.-level thesaurus.
  3. Best I can tell, he isn’t aligned with either the Democratic or Republican party.
  4. The interconnections between the big banks and investment banks and our government are spooky. Just one example: How did Hank Paulson, former Goldman Sachs CEO, happen to be available to serve as the Secretary of the Treasury just as the Great Recession began? Patriotism?

Learnings from Stockman:

  1. He provides a fairly detailed history of 20th and 21st century U.S. economics, with relevant details about countries like China and Japan.
  2. He explains and provides details about the Keynesian monetary theory and application, and gives his views about its negative impact over the past 50 years.
  3. As a capitalist, he is opposed to deficit spending and would say that Presidents Reagan and George W. Bush significantly increased the federal deficits to an alarming level.
  4. He reminds us that President Eisenhower warned the nation that we must guard against the influence of the military-industrial complex.
  5. President Eisenhower reduced the defense budget and did not reduce taxes against his party’s wishes.
  6. Based on their actions and policies, both political parties support Big Government.
  7. According to Stockman, who was in the Reagan White House, the trickle-down theory of economics, or the Laffer curve, did not and does not work.
  8. He provides some very interesting, detailed insights regarding the causes for and the remedies of the Great Recession.
  9. He is a true capitalist and his criticisms in the book are of crony capitalism, where the government intercedes in the free market on behalf of a special group, like bailing out Wall Street or the auto industry. He believes the Republican Party has really drifted away from true free market capitalism, and his book provides many solid examples to support his view.

As I’ve already stated, over the years I’ve made assumptions that later turned out to be myths. Throughout this book, I once again felt that way. If you consider yourself a capitalist/free market person, I would highly recommend you take the time to read it. Unfortunately, politics have twisted some truths to fit positions or platforms.

Closing comment: For any automotive suppliers who are reading this blog, yes, this is the same guy who created, founded, presided over as CEO, and took Collins & Aikman bankrupt, and he also covers that in the book. Honestly, I was a little disappointed with his lack of remorse for his failure.

Another Employee Retention Idea

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Tom Doescher

Tom Doescher

In the August 27, 2019, issue of Inc. magazine, Bill Gates is quoted as saying the most important perk companies can give their employees is “flexible work arrangements” (FWA). The article goes on to report on a new Harvard Business School study that says companies that let their employees “work from anywhere” and work “whenever they want” wind up with employees who are more loyal, more productive, and cost less.

How Companies Benefit When Employees Work Remotely

I can feel the cynical pushback from some of you, but bear with me. The starting point for any policy would have to be to include guidelines for “who” and “when” employees would qualify for FWA. Examples of exclusions that I can think of would be: office receptionists, those whose work is performed at the clients’/customers’ place of business, and those who are on teams that continually collaborate, to name a few.

Probably one of the challenges of adopting an FWA would be allowing some employees to have this perk, while denying it to others. Obviously, whatever you do has to be a win-win. I know a young market research professional who started at her employer’s Detroit headquarters, but after a year asked if she could work remotely from Colorado. Today, she works remotely from the East Coast.

At my former firm, Tailored Work Arrangements (TWA) have been ragingly successful for years — and the firm has been able to retain very talented professionals. My all-time favorite TWA is an amazing story. A young tax partner and her husband had adopted an infant daughter and, as time went by, she asked if she could reduce her work hours to spend more time with her daughter. The firm gladly agreed. Then she asked if she could work part-time, and the firm gladly agreed. She was a very valuable professional in a highly specialized area of tax. Sadly for us, she eventually decided to resign from the partnership and stay home full-time. A couple of firm partners continued to stay in touch with her, and even had her perform some contract work in her unique specialty area. As her daughter grew up and went to college, she was excited to rejoin the firm as a non-partner. After several years, she was asked if she would like to become a partner again, and she said yes. She went through the partner selection process, and once again was offered a partnership. As a matter of fact, she’s the only person, in the 90-year history of the firm, to have been promoted to partner twice.

In this competitive world, I happen to agree with Bill Gates; I believe companies that figure out ways to accommodate employees’  special needs will be the winners in the long run.

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