Monday, June 04, 2007

Pushing Tin, The Hitch Hiker's Guide to the Galaxy, Capitalism and our sense of fairness

I was reading an article today about Mitt Romney and the way he made his fortune (NYT - Romney’s Political Fortunes Tied to Riches He Gained in Business) and it reminded me of something I've been thinking about off and on for some time now. The disconnect between our love of capitalism and our sense of what is fair. I was also reminded of the movie Pushing Tin and the Hitch Hiker's Guide (HHG) Radio show (and the second book The Restaurant at the End of the Universe). Anyway, the article about Romney (which I did not read in its entirety) mentions that the way Romney made his fortune was through private equity, not running a business, per se. The article states:
But Mr. Romney’s Bain career — a source of money and contacts that he has used to finance his Massachusetts campaigns and to leap ahead of his presidential rivals in early fund-raising — also exposes him to criticism that he enriched himself excessively, sometimes by cutting jobs to increase profits.

He made his money mainly through leveraged buyouts — essentially, mortgaging companies to take them over in the hope of reselling them at big profits in just a few years. It is a bare-knuckle form of investing that is in the spotlight because of the exploding profits of buyout giants like Bain, Blackstone and the Carlyle Group. In Washington, Congress is considering ending a legal quirk that lets fund managers escape much of the income tax on their earnings.
“The amounts of money are so vast that it is truly a matter of time before the taxation of private equity is front and center of the public agenda,” said James E. Post, a Boston University professor who teaches business-government relations. “Increasingly, this world of private equity looks like a world of robber barons, and Romney comes out of that world.”

Mr. Romney learned the perils of campaigning on his business career in his first run for office, when accusations that Bain Capital had fired union workers at an Indiana company it controlled derailed his effort to unseat Senator Edward M. Kennedy, a Democrat, in 1994. “Basically, he cut our throats,” a laid-off worker said in a commercial attacking Mr. Romney. (He has said he had nothing to do with the firings.)

Mr. Romney, in an interview, acknowledged that Bain Capital’s acquisitions had sometimes led to layoffs but said that he could explain them to voters.

“Sometimes the medicine is a little bitter but it is necessary to save the life of the patient,” he said. “My job was to try and make the enterprise successful, and in my view the best security a family can have is that the business they work for is strong.”
Okay, this leads me to my musings.

First of all, what do we want in a leader? In the HHG, the main characters of the story learn that the person who actual rules the universe is an old man who lives in a small shack on the outer reaches of the universe. He doesn't seem to realize that he is really ruling the universe and he does not really believe that anything exist outside of his own perceptions. He can therefore make decisions totally in the abstract because he does not need to consider who they will affect or how they will affect them. He is the epitome of the disinterested third party.

This made me think of the movie Pushing Tin, in which John Cusack and Billy Bob Thornton play air traffic controllers. In the movie, one of the characters points out that if an air traffic controller ever begins to think of the blips on their computer monitors as actual air planes or, heaven forbid, actual people, they will become incapable of actually doing their job.

So this brings to mind the question, do we want someone who can think of American citizens, or other countries, as simply blips on a computer screen? Is that what we really need? Obviously, this is a characteristic that can be very useful in a capitalist economy. You have to make the hard decisions, based on profits and calculated losses. If you concern yourself with the individuals whose lives are involved, you just might not succeed in the business world.

This gives rise to the question of the disconnect between capitalism and our sense of right, or justice. In the business world, doing what most people see as "right" is not always what is best for business. To succeed over time, companies have to keep up with technology, which has meant increased mechanization and computerization over the years. This had lead to many people losing jobs that were based on unskilled labor. This may be good for the company, and good for the country over all, but it really sucks for the person who loses his job and for the family that he or she supports. To them, it seems unfair. What is a person to do? How do we have it both ways?

It seems to me that a political leader has to find a way to balance the two. Unfortunately, I don't have any answers as to how to do that. It is just something to think about.

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