While pondering this excellent blog on the Times-Picayune’s corporate-inflicted bleak future, it occurred to me that we’re deep into what I’m calling the Bain Capital Culture.
Simply put, it’s more profitable to decimate a business than to run it.
It’s increasingly hard to imagine, but profit used to be the byproduct of creating things and meeting public needs and wants. Factories, businesses and public works built an economy that included everyone. Government regulations (especially after the Great Depression) ensured that one sector of the economy didn’t destabilize things for everyone else.
In other words, we had an economy conducive to, and dependent on, things getting done. And we needed everybody to keep it rolling.
But along the line, something happened. It no longer was enough to make a tidy profit — it became a holy duty to wring every possible dollar out of an enterprise. Entire industries cropped up, devoted exclusively to helping companies retain money. Firms made money solely on the idea that they knew how to retain money. And guess what? The money wasn’t in producing! Production is expensive. But you know what helps line pockets? Cutting back!
And thus was born the new logic: If a business makes a healthy profit selling a popular item made under ethical conditions, but that business can give its executives and shareholders a few more pennies by moving its plant to Sweatshopistan and downgrading quality, then it’s not just OK — it’s an imperative. Civic responsibility, workplace harmony, sense of purpose, even market needs — all of those were distantly secondary. Today, to talk about decent salary and benefits or high-minded principles is to have most Americans laugh in your face — most of them because it’s so hard to find these days, and half of those because they insist that such things are too idealistic to matter anymore.
And why do so many average Americans buy into this logic? Because we lionize the wealthy. That’s another thing that changed. Go back to the early 20th century and you’ll see that the wealthiest titans were usually the worst people. Utterly greedy and completely unchecked, we called them what they were: robber barons. Americans wanted better lives for themselves, sure, but knew from their daily grind that comforting the rich at everyone else’s expense wasn’t the ticket to it. Such workplace strife led to historic strikes, unions, workplace safety, living wages and trust-busting. People (and even politicians) fought for better lives for everyone, not just for those with the most money. Because the prevailing philosophy then was that we all deserved a fair shake — that a decent life wasn’t something you earn admission into once you get rich.
Thinking (and acting) that way led to decades of consistent prosperity. And while you had rich, middle class and poor then as now, the differences weren’t so drastic; that was because we all needed each other. But that matters less in the new economy, where the big money essentially never leaves the hands of the top brackets. Look at any list of the most lucrative jobs in America, and about half of them involve helping people with money make more money. More service-oriented professions are increasingly associated with personal sacrifice as opposed to being ways to make a living. Teachers are one example. Journalists are another.
Newspapers are beset by the notion that they are going extinct. In a sense, that’s true, because nothing lasts forever. But the way many larger corporations are handling it hastens the demise. And their reactionary, cannibalizing actions often have little cause-and-effect with how a particular publication is actually doing. Lots of individual newspapers are actually doing quite well — it’s the pre-emptive strikes that kill them. And there’s often no sense that the deep-pocketed executives making the decisions have any understanding of — or even care about — whether their courses of action are correct. After all, they have their paychecks and, on paper at least, have successfully saved money for the company. In our Bain Capital Culture, that matters for something.
Everything else is nothing.