For nearly two generations, we have been told about the superiority of free market capitalism. We’ve been told that markets are the fairest, most equitable way to do everything: they are self-correcting, more agile, and better-aligned to the American spirit of self-reliance, ingenuity, and ability.
Some particularly myopic businesspeople and those who repeat their messages, have even held business as a model for government by declaring, “Government should be run more like a business!” Given these decades of pro-business thought & policy, one would believe that no entity would be able to better weather any storm than tried-and-true American capitalism. It is the stuff of pride and legend.
So, then came COVID-19.
What did nearly every business sector do immediately following the proliferation
of stay-at-home orders aimed at slowing the spread of COVID-19?
They all turned to the same institution that they have been running down, vilifying, and deriding for all these many years. Multi-million dollars CEOs of big companies, like airlines, oil companies, and others – gentlemen and gentlewomen who have decried government ineffectiveness and championed a business world without government interference – these very same captains of industry, when confronted with COVID-19, turned where?
That’s right. They
asked Government to save them.
They came with puppy dog eyes & stories of financial ruin, and yes, with
hands held wide open, to the Government for help.
Despite their rugged, go-it-alone talk, these business leaders had often found themselves at the sloppy trough of government support. It was just 2017 when these self-same CEOs had been given a gift by Mitch McConnell and his comrades in the Congress & the White House. It was a gift of a tax decrease from the new administration.
Did these business-school pedigreed CEOs put any money aside to handle a downturn in the economy of any type? Did they show any kind of foresight or competence in how they applied the windfall they’d been granted?
No, mostly companies bought back their own stock – stock which is now much reduced in value. They didn’t heavily invest in R&D and they didn’t stick any money under the mattress. I’d be tempted to say the CEOs were too smart for their own good, but that would be inaccurate. They may have been too smart for their company’s good, as many CEO salaries are based on stock performance. Buying one’s own stock reduces liabilities which tends to make the stock price increase.
So, the CEOs cashed in, the companies cashed in and then COVID-19 showed up. And the government paid. The government is us, by the way. You, me, the people across town, across the river, in the city, in the pastures and orchards, milking the cows, typing emails in office buildings, serving dinner and cocktails, hooking up IVs, and out riding the range – we’re all the government. We bailed out airlines, manufacturers & many companies with people that think government should be run like a business.
One of the things the business types love to tell us is that
the market decides who wins and loses and that poorly-managed companies will go
bankrupt or fail. Mitch McConnell disingenuously
hinted last week that perhaps it is the state & local governments that
should go bankrupt, after passing several sweetheart deals for preferred
industries in the CARES Act & following years of shunting funds from other
states to his own. Where’s the rugged
conservative ideal of corporate America that you succeed & fail by the sweat
of your brow? Nowhere to be found. McConnell makes sure that large companies
(& likely large campaign donors) will survive by the sweat of our brows by
giving them federal dollars. Bankruptcy for large companies is unthinkable,
but the failure of small communities and their local governments appears to be
OK with the Senate Majority Leader. These companies failed to prepare in the
very least amount for any crisis, not just a global pandemic, and many of them,
by the sword of capitalism, should rightly fail for that lack of vision.
We will rescue them, however. The
government (again, that’s us) will give them money to see them through to
the end of the marathon that is COVID-19.
The government will likely be decades before we come close to addressing
the financial hole this will put us in, but we’ll manage. CEOs will still be lauded for “managing the
crisis” and we probably won’t hear fewer calls for government to “run like a
business”. However, we’ll know each time we hear it, that
it’s a toothless saw – just another worn, useless saying.
The truth is, it’s a good thing government isn’t run like a business. If it were, where would the big companies go the next time they need a handout?