The Failure of Power
I had a real epiphany this morning and this story is the output from that. I awoke at 6am after a decent night’s sleep and as I went into our shared closet I flipped on the light as I always do, only to find that all but one of the track lights failed and did not go on. I did the usual of flicking the switch back and forth (as though the switch might be the problem) and nothing changed. I went about my morning business and eventually settled into reading an article by Malcolm Gladwell that I had noticed in the just-arrived edition of the New Yorker magazine. It is an article about whether Jack Welsh (rest his soul, he died in 2020 at age 85) was the greatest or the worst CEO of his day. That’s quite a big swing, even in this revisionist world, so the article drew my attention even more than a usual Malcolm Gladwell piece might otherwise do. It is clear to me that Malcolm Gladwell is a smart dude with many great and insightful thoughts and books to his credit (The Tipping Point, Blink, and Outliers being the most notable), but lately he has done what genius always tends to do, which is to keep milking the cow to a point where one logically questions whether anyone can keep coming up with great ideas with such constancy. In some ways, the very notion of great ideas is that they don’t usually spring from one source over and over again, but come from the process of reinvention and from less than anticipated sources. Since Gladwell has been a columnist for the New Yorker for 25+ years, as people say to me all the time, “you must be running out of ideas.” But in the November 7th edition, all the way back on pg.71, under the heading of BOOKS, is a piece called Severance. I’m not sure the title would have caught my eye, but the picture, which takes up 70% of the page did. Its a Hudsucker Proxy type picture of Jack Welch sitting at a large office desk, the kind that only CEOs can command, with a brass lamp on it and a potted palm off to one side. Behind Welch is a huge floor to ceiling window wall with an equally huge jet turbine behind it that dominates the whole page. Whoever did the art deserves kudos for creating an eye-stopper and makes you want to read about the little gnome in the foreground.
The reason the article is in the BOOKS column is because of the release in the next weeks of my friend William D. Cohan’s latest business tell-all, Power Failure: The Rise and Fall of an American Icon. Needless to say, the book is about Jack Welch and the recent trend of revisionist thinking about the once “God” of corporate America. I got to know Bill Cohan when he was writing his second Great Wall Street book, House of Cards: The Tale of Hubris and Wretched Excess on Wall Street. We spoke at length and I am mentioned (not so very unfavorably) in the book and even debated him on the open stage at Cornell one afternoon in 2010. Cohan has also written such spellbinding books (at least to us Wall Street sorts) as The Last Tycoons: The Secret History of Lazard Freres & Co., Money and Power: How Goldman Sachs Came to Rule the World, and now, the definitive book about the man that was the envy of Wall Street for twenty years, arguably the most prosperous twenty years ever seen on Wall Street. This is hardly the first book about Welch written in the twenty years since his stepping down as CEO of General Electric.
Welch himself has written at least six books about himself and his management style, most notably his 2005 book Winning, which is a one-word description of Welch’s primal imperative in business and life. But in addition to those, there have been several other interesting books about the man and his legend including the early ones like Jack Welch and the GE Way, Leadership Secrets From Jack Welch and The Welch Way and more lately At Any Cost, The Man Who Sold America and David Gelles’ book The Man Who Broke Capitalism: How Jack Welch Gutted the Heartland and Crushed the Soul of Corporate America―and How to Undo His Legacy. Do you see the trend from these titles? When Welch was off enjoying his excessive retirement package (some of which he had to give back to avoid further investigation and censure by the SEC) the books were complimentary, but once Welch got old and died, the knives came out. To be fair to the most recent writers, those books like Bill Cohan’s 700-page magnum opus take time to research and write and were largely begun before Welch died, but the tendency for the dog pack to turn on the aged alpha dog as he falters is hard to ignore.
That all said, when you read Gladwell’s account of the Cohan book, my buddy Bill should be wanting to send Malcolm a bouquet of flowers. He does a fine job of making a compelling case for what a good job Cohan has done to back up his bold assertion that Welch gutted capitalism and perhaps even crushed the soul, as it were, of corporate America. I am ending my ethics course this semester with the overall issue of the state of capitalism and the functioning of civil society in our day and age. I am using excerpts from Saving Capitalism From the Capitalists and having them watch Michael Moore’s Capitalism: A Love Story. Needless to say, with Moore involved, it is not so much an endorsement of capitalism as it exists in America in 2022. This has become a trend and its not an accident. Liz Truss was the shortest-lived Prime Minister in the history of the UK, serving for 50 days, just long enough to put forth a traditional conservative budget led by large tax cuts, just the the Republicans and other right-leaning governments have done. Only this time, the markets stood up and said quite loudly, “Enough!” And then Brazilians voted out Trump-wannabe Jair Bolsonaro and voted in leftist Luiz Inácio Lula da Silva, who led Brazil quite popularly for eight years. What’s up with that? And now, only a week or two after Elon Musk, the richest man in the world, spent $44 billion (actually only $31 billion since he got some silly bankers to put up the rest in loans, which are already deeply underwater) for Twitter and all he wants to do is cut staff at Twitter by 50% (eliminating the entire social media misinformation prevention team five days before the highly volatile midterm elections) and all his big advertisers are running for the hills, making him announce that Twitter revenues are evaporating before our eyes.
The theme seems pretty consistent and pretty clear, the extreme capitalism that has powered forward since 1980 and perhaps advanced most thanks to one Mr. Jack Welch, the revered corporate chieftain (and I use the tribal term quite intentionally) who epitomized the Gordon Gekko saying that “Greed is good”, was showing American business the path to self-interest. They learned the lesson all too well as we see now that one half of inflationary impact (at least in the case of energy) is being taken as excess corporate profits while Americans suffer the consequences and Republicans beat the drum and salivate over regaining power so they can drive capitalism straight through the heart of democracy. I know that sounds like hyperbole, but others must be feeling what I feel or they would not be turning on Jack Welch, the paragon of modern capitalism. I read the end of the Gladwell piece which quoted Cohan on Welch driving down the middle of the road in Nantucket as though he were the only pebble on the beach, making oncoming drivers pull to the side of the road. Just then, the other track lights in my closet flickered back on for no particular reason, but I had already noted the failure of power when and where I needed it most.