Say hello to Mr. Jonathan Tasini, self-described “union leader/organizer, author, strategist.” Mr. Tasini has a vision of tomorrow, and he wants you to know about it. This vision revolves around two ideas: Goldman Sachs and 15 million new jobs.
And this is Mr. Tasini’s buddy Richard Trumka, the president of the AFL-CIO. Friendly looking fellow, isn’t he? Mr. Trumka and Mr. Tasini are busy laying the groundwork for a new America. And like Mr. Tasini, he thinks there’s no place for Goldman Sachs or Wall Street in this workers’ paradise. According to Mr. Trumka, Goldman Sachs is everything that is bad in this country:
Says Mr. Trumka: “Goldman has almost 860 current and former partners, the documents show. In the last 12 years, they have cashed out more than $20 billion in Goldman shares and currently hold more than $10 billion in Goldman stock.”
Naughty, naughty. But Mr. Trumka is not only dismayed by the notion of a business making profits:
“…filings show an inner circle that is chiefly male — 87% of the current partners are men.”
Well, we can see why he’s upset. What socially-responsible management would tolerate such a blatant inequity? Certainly no labor union. And Mr. Trumka is on solid ground — because the 63 member Executive Council of the AFL-CIO is only 86% male.
Mr. Tasini explains their joint animus against Goldman and the rest of Wall Street:
“Even back in “the good ‘ole” days of Wall Street — before the 2008 collapse — we, the people, suffered from the Goldman Sachs ethos. Wall Street has been the financial engine behind the unwinding of the American Dream.”
Now, this comes a a shock. From when nemo was but a little pup, he was told in stentorian tones that it was the Godless communists who were “unwinding the American Dream.” Now this guy comes out of nowhere and tells me it was the capitalists all along? My head spins. But he explains:
“It financed leveraged buyouts and corporate takeovers based heavily on debt — which resulted in the shedding of millions of good-paying jobs and will continue to create the same sick dynamic in the financial system whereby the ‘health of a company’ is measured by its stock price, not by how well the workers are doing.”
Wow. We are breathless with admiration. Where to start? This sentence burned out the clutch between our mind and our mouth; we could hardly choose which segment to carve up first. So let’s break it down.
LBOS proliferated in the 70s and 80s because the stock market capitalization of dozens of formerly prosperous public companies had steadily fallen to a fraction of their breakup value. Why? Because, saddled with bloated payrolls and cumbersome management structure, they were in steep declines, and extinction was only a matter of time. Investors knew this, and understandably had little affection for putting their money into businesses that were in clear declines.
As a result, heartless (read: “realistic”), ruthless (“practical”) vultures (“managers”) stepped in and cut costs. They consolidated divisions and products. And they sold off or simply terminated divisions or segments that were unprofitable. And so a lot of people lost their jobs. AFL-CIO type jobs. Assembly line workers. Loaders. And a lot of high-paid executives, too.
They were going to lose them anyway. Out of business was not far away. But the LBOs saved jobs — jobs that were going down the drain, thanks in part to the highly impractical demands of labor. In fact, LBOs were the saviors of millions of jobs — far many more than they eliminated. Mr. Tasini wants you to forget this.
He wants you to forget this because, as this was all happening, the AFL-CIO screamed like a stuck pig. Dire forecasts of chronic double-digit of unemployment issued from the putative architects of a workers’ paradise. And what happened? Unemployment in the 80s and 90s and 2000’s remained at low levels.
Should Goldman Sachs and its brethren get the credit for this, Mr. Tasini? After all, as you point out, it was their financing that fueled these rescues. And how about your punch line:
“…the same sick dynamic in the financial system whereby the ‘health of a company’ is measured by its stock price, not by how well the workers are doing.”
Ah, now we get it. Mr. Tasini is either a canting moron or a dangerous demagogue. Do we live in some Fantasia where a company survives because its “workers” spend their day in saunas sipping antoxidant teas? Shall investors choose companies based on the fatness of their union contracts.? Didn’t we already go through this?
General Motors? Chrysler? Delta? UAL? What plunged these companies into the dustbin, Mr. Tasini? Why did the US lose its steel industry? What happened to US Steel, LTV, and all the others? Cheap labor in Japan?
If you measured any of these companies by how well their workers were doing, they would have been at the top of the list. Right until they croaked, merged or were broken up by the predatory LBO fiends from Wall Street.
There was a time when unions served an important social function. Many still do. Without them, capital could browbeat labor without restraint. But, as with so many good ideas and noble causes, things got out of hand, and the guardians of the workers’ rights became the exploiters, killing the geese that produced the gilded globes. And how have the unions themselves fared?
Union officials immediately blame this decline on the “loss of US jobs to foreign manufacturers.” Right. Anyone here want to make running shoes? And if all these foreigners were displacing US workers, why the sub-4% unemployment that characterized the last fifteen years before the financial crisis?
But back to Mr. Tasini, because he has a plan. And it’s brilliant in its simplicity.
“And, so, it is Trumka, and the labor movement’s general vision, not Goldman Sachs, that offers the road map to a decent society. As I have mentioned before, a number of us are working on creating a Job Party to press for a call for an emergency action to create 15 million jobs. Join us — and let’s change the conversation.”
Get it? We just create 15 million new jobs. Just. Create. Them.
How do we do this? Well, leave that to the “Job Party.”
Well, let’s get real for a moment. The fact is, you’re going to need Goldman Sachs and its friends if you want to create job one. Because the old jobs aren’t coming back. We’re going to need new ones.
You see, gentlemen, when you think of business and jobs you think of bricks and mortar, production lines, huge warehouses and giant pieces of machinery, filled with or surrounded by lots of worker bees swarming around industriously and wearing steel-tipped boots. Forget it. That America has been dying for years, and is disappearing so fast right now that you can almost hear the hiss of the helium leaving the balloon.
But there will be plenty of jobs. Trust me. Where will these new jobs come from? From new businesses. And there are going too be many, many of them. They are already there, but they are still few in number — so far. They live in a world that is made not from bricks and mortar, but of gossamer so fine that most of us can’t even see it sliding past the shrinking bulk of the visible world.
These business are very lean and very efficient. They often require very little space, and very little capital. They have no inventory to speak of, other than ideas and intellect. They are growing right now right in front of us. They are doing things so new that they will change the shape and fabric of global economies.
This is the world of e-commerce. No physical stores. No bulky and clumsy distribution centers or warehouses. Very little capital equipment. Print advertising? Forget it. Television advertising? Dead.
Of course, there will still be businesses that make things, but they will reach their markets in very different ways. By the way, did you play with dolls and firetrucks when you were little? Do you think kids will in the future? Or will they be manipulating 3 dimensional toys of fantastic wonder from a virtual keyboard? Get the picture?
This world is already here in some ways. Want a wonderfully funny example? Try “Gear Girl.” Note that this is almost pure entertainment, not an ad. Get the picture? Imagine this kind of thing multiplied by 10,000 in 100,000 different ways. Imagine a virtual grocery store aisle offering a currently-inconceivable range of brands, sizes and prices. No more limitations from “shelf space.” Scroll along and it’s just like walking down the linoleum at Price Chopper — except much, much bigger, and much, much easier.
Bad news for Mssrs. Tasini and Trumka. But good news for the rest of us. Because these businesses will employ a lot of people in sustainable jobs with futures. And this isn’t pie-in-the-sky. It’s already happening.
And who will provide the capital to make these new business grow? To expand into new product lines, conduct research, develop the necessary new technologies and systems to sustain it?
Goldman Sachs, of course.