The Time Really Has Come for a Change in the State of American Business

Business sucks. Not just business in its economic sense but business in its practical applications.

S requested I help obtain a new computer for her; I convinced her to go with a new Dell (DELL) laptop (she does not want an Apple (AAPL)), largely because Dell has (had?) a reputation for offering the latest and greatest technologies. That mission, though, seems a thing of the past, as repeated visits to the Dell website revealed only tried and true parts, and not the latest and greatest I sought; nonetheless, I configured online from the options Dell does offer. And when satisfied, I went to purchase and apply a discount coupon, and hit a brick wall; the software would not accept the discount coupon. No problem, I would call the company sales team.

You can guess what happened next. A pre-recorded message stated, "Everybody is busy; please call during regular business hours (which I had); try again; and... Goodbye." And then Dell disconnected the call.

"Goodbye"...? You must be kidding. Dell is as hard-up for sales as the next (computer) company; I am a customer wanting to buy now. Why does the company not want my business? Well, screw Dell; plenty of other companies happy to receive my business, especially now. (Please forward my comments to any Dell mucky-mucks you might know, and have them contact me.)

But as I reflected on this incident, I realized it to be a fractal impression of the state of American business today; for example, too reliant on voice mail (punch x for --) that (purposefully?) frustrates the consumer's objective. I realize I will anger my Libertarian and Austrian school friends, with what I am about to say, but...

The time has come for change. I do not propose the economy be planned centrally a la erstwhile Soviet grand plans, but the same old same old cannot continue. I realize my thesis to be arguable (Please argue!), but we, as a nation, as a people, are bankrupt -- financially, morally, ethically, politically. And so the need for change. Now.

I left Wall Street for many reasons, but its willingness to prostitute itself for a buck was chief among them. The news last week that bankers paid themselves $18.4 billion of bonuses disgusts me, but is only more of the same. That the monies likely came from you, me, us taxpayers weakens my Libertarian resolve for the invisible hand. I share Maureen Dowd's disgust when she says,

"At least the old robber barons made great products. When you make money out of money, unmoored from morality and regulators, it must unhinge you. How else to explain corporate welfare queens partridge hunting in England, buying French jets and shopping for Lamborghinis? Mr. Obama was less bracing than during the campaign, when A.I.G. executives were caught going to posh retreats after taking an $85 billion bailout. He called for them to be fired and to reimburse the federal Treasury... That’s not enough, not with the president and Geithner continuing to dole out what may end up being a trillion dollars to these “malefactors of great wealth,” as Teddy Roosevelt put it... Anyone who gave bonuses after accepting federal aid should be fired, and that money should be disgorged to the Treasury."

This cannot go on, must not continue... and yet it does. And in all walks of life. Consider the vote for change that the election of President Obama represents. Yes, I too fear the realization of the Democrat's plank, spend, spend, spend. But how would that differ from what has occurred during the very recent past? And perhaps, just perhaps, President Obama sees a future different than most of us can envision, sour grapes Republicans especially. Frank Rich recounts only some of the latest examples of buffoonery by the GOP, aka, the Grand Obstructionist Party...

"The current G.O.P. acts as if it — and we — have all the time in the world. It kept hoping in vain that the fast-waning Blago sideshow would somehow impale Obama or Rahm Emanuel. It has come perilously close to wishing aloud that a terrorist attack will materialize to discredit Obama’s reversals of Bush policy on torture, military tribunals and Gitmo. The party’s sole consistent ambition is to play petty politics to gum up the works. If anything, the Republican Congressional leadership seems to be emulating John McCain’s September stunt of “suspending” his campaign to “fix” the Wall Street meltdown. For all his bluster, McCain in the end had no fixes to offer and sat like a pet rock at the White House meeting on the crisis before capitulating to the bailout. His imitators likewise posture in public about their determination to take action, then do nothing while more and more Americans cry for help. The problem is not that House Republicans gave the stimulus bill zero votes last week. That’s transitory political symbolism, and it had no effect on the outcome. Some of the naysayers will vote for the revised final bill anyway (and claim, Kerry-style, that they were against it before they were for it). The more disturbing problem is that the party has zero leaders and zero ideas. It is as AWOL in this disaster as the Bush administration was during Katrina. If the country wasn’t suffering, the Republicans’ behavior would be a laugh riot. The House minority leader, John Boehner, from the economic wasteland of Ohio, declared on “Meet the Press” last Sunday that the G.O.P. didn’t want to be “the party of ‘No’ ” but “the party of better ideas, better solutions.” And what are those ideas, exactly? He said he’ll get back to us 'over the coming months.'"

"The coming months"... Say, what?! Get with the program, Republicans. We are in a very bad situation, with a lot of hurt yet to come. So get f**king real. Stop playing games, throw out your old playbook of partisan politics, and no more same old same old. Try something, anything, everything... until something sticks. Perhaps, as Steve Ballmer (Microsoft (MSFT) CEO) recently said, 'This is not so much a recession, as the economy resetting itself at a permanently lower level.' That would be sad, but the sooner there, the better for us all.

We all are in this mess together. Only together will we find a way out.

Comments

[Steven Hansen:]

"'This is not so much a recession, as the economy resetting itself at a permanently lower level.' That would be sad, but the sooner there, the better for us all."

great article.

Feb 03 09:22 PM

[MarvinMBA:]

My experiance was similar to years. When I called in a day later to add to my laptop order they cancelled the whole order I found out a week later...frustrated I bought the same product at Toshiba. Talking to Dell in India which apparently understood little of what I wanted and then cancelled the whole order should not represent the best of American Business...MarvinMBA

Feb 04 12:58 AM

[MarvinMBA:]

We are in a Depression already...get used to it..if you have a place to live and some pasta to eat try to go to school to be better qualified for the next leg up. This is going to last a minimum of 5 years before we see the light of day so a BS, MS or PHD could be in your future...GO FOR IT!!!!!!!!
MarvinMBA

Feb 04 01:02 AM

[punk_ash:]

I am so tired of the "sorry", "thank you" on the phone lines, how about a real good product and at a decent value.

Feb 04 01:25 AM

[mediapro:]

Relative to the theme of your article, here's more food for thought:

The Speech I Wish Obama Could Give

Fellow Citizens:

My administration came to office with a mandate for bold action at a time when our most powerful economic institutions had clearly failed us. They crippled our economy; burdened governments with debilitating debts; corrupted our political institutions; and threatened the destruction of the natural environment on which our very lives depend.

The failure can be traced directly to an elitist economic ideology that says if government favors the financial interests of the rich to the disregard of all else, everyone will benefit and the nation will prosper. A thirty-year experiment with trickle-down economics that favored the interests of Wall Street speculators over the hardworking people and businesses of Main Street has proved it doesn't work.

We have no more time or resources to devote to fixing a system based on false values and a discredited ideology. We must now come together to create the institutions of a new economy based on a values-based pragmatism that recognizes a simple truth: If the world is to work for any of us, it must work for all of us.

Corrective action begins with recognition that our economic crisis is, at its core, a moral crisis. Our economic institutions and rules, even the indicators by which we measure economic performance, consistently place financial values ahead of life values.

We have been measuring economic performance against GDP, or gross domestic product, which essentially measures the rate at which money and resources are flowing through the economy. Let us henceforth measure economic performance by the indicators of what we really want: the health and well-being of our children, families, communities, and the natural environment.

Like a healthy ecosystem, a healthy twenty-first-century economy must have strong local roots and maximize the beneficial capture, storage, sharing, and use of local energy, water, and mineral resources. That is what we must seek to achieve, community by community, all across this nation, by unleashing the creative energies of our people and our local governments, businesses, and civic organizations.

Previous administrations favored Wall Street, but the policies of this administration henceforth will favor the people and businesses of Main Street—people who are working to rebuild our local communities, restore the middle class, and bring our natural environment back to health.

We will strive for local and national food independence by rebuilding our local food systems based on family farms and environmentally friendly farming methods that rebuild the soil, maximize yields per acre, minimize the use of toxic chemicals, and create opportunities for the many young people who are returning to the land.

We will strive for energy independence by supporting local entrepreneurs who are creating local businesses to retrofit our buildings and develop and apply renewable-energy technologies.

It is a basic principle of market theory that trade relations between nations should be balanced. So-called free trade agreements have hollowed out our national industrial capacity, mortgaged our future to foreign creditors, and created global financial instability. We will take steps to assure that our future trade relations are balanced and fair as we engage in the difficult but essential work of learning to live within our own means.

We will rebuild our national infrastructure around a model of walkable, bicycle-friendly communities with efficient public transportation to conserve energy, nurture the relationships of community, and recover our farm and forest lands.

A strong middle-class society is an American ideal. Our past embodiment of that ideal made us the envy of the world. We will act to restore that ideal by rebalancing the distribution of wealth. Necessary and appropriate steps will be taken to assure access by every person to quality health care, education, and other essential services, and to restore progressive taxation, as well as progressive wage and benefit rules, to protect working people.

We will seek to create a true ownership society in which all people have the opportunity to own their homes and to have an ownership stake in the enterprise on which their livelihood depends. Our economic policies will favor responsible local ownership of local enterprises by people who have a stake in the health of their local communities and economies. The possibilities include locally owned family businesses, cooperatives, and the many other forms of community- or worker-owned enterprises.

We will act to render Wall Street's casino-like operations unprofitable. We will impose a transactions tax, require responsible capital ratios, and impose a surcharge on short-term capital gains. We will make it illegal for people and corporations to sell or insure assets that they do not own or in which they do not have a direct material interest.

To meet the financial needs of the new twenty-first-century Main Street economy, we will reverse the process of mergers and acquisitions that created the current concentration of banking power. We will restore the previous system of federally regulated community banks that are locally owned and managed and that fulfill the classic textbook banking function of serving as financial intermediaries between local people looking to secure a modest interest return on their savings and local people who need a loan to buy a home or finance a business.

And last, but not least, we will implement an orderly process of monetary reform. Most people believe that our government creates money. That is a fiction. Private banks create virtually all the money in circulation when they issue a loan at interest. The money is created by making a simple accounting entry with a few computer keystrokes. That is all money really is, an accounting entry.

My administration will act immediately to begin an orderly transition from our present system of bank-issued debt money to a system by which money is issued by the federal government. We will use the government-issued money to fund economic-stimulus projects that build the physical and social infrastructure of a twenty-first-century economy, being careful to remain consistent with our commitment to contain inflation.

To this end I have instructed the treasury secretary to take immediate action to assume control of the Federal Reserve and begin a process of monetizing the federal debt. He will have a mandate to stabilize the money supply, contain housing and stock market bubbles, discourage speculation, and assure the availability of credit on fair and affordable terms to eligible Main Street borrowers.

By recommitting ourselves to the founding ideals of this great nation, focusing on our possibilities, and liberating ourselves from failed ideas and institutions, together we can create a stronger, better nation. We can secure a fulfilling life for every person and honor the premise of the Declaration of Independence that every individual is endowed with an unalienable right to life, liberty, and the pursuit of happiness.

No government on its own can resolve the problems facing our nation, but together we can and will resolve them. I call on every American to join with me in rebuilding our nation by acting to strengthen our families, our communities, and our natural environment; to secure the future of our children; and to restore our leadership position and reputation in the community of nations.

This is an abridged excerpt from David Korten's new book, "Agenda for a New Economy: From Phantom Wealth to Real Wealth," to be published by Berrett-Koehler, Feb 2009. This extract forms part of the YES! series, "Path to a New Economy." An earlier version of this chapter first appeared as part of David's article in Tikkun, Nov/Dec 2008. David Korten is the author of the international bestseller "When Corporations Rule the World and The Great Turning: From Empire to Earth Community." He is co-founder and board chair of YES! Magazine, and a board member of the Business Alliance for Local Living Economies

Feb 04 05:10 PM

[TeresaE:]

Your experience with Dell is indicative of American mega-corporations. We Americans are only good for one thing to these companies, our money (or credit).

They offshore jobs, tout how "globalization" helps us, run American suppliers out of business, then are SHOCKED when their former customers are too broke to buy their products? Doesn't take an MBA to figure out firing & bankrupting your best customers (auto industry anyone?) is bad for the bottom line.

Now, banks are firing & bankrupting their best customers--the ones that still pay. Accidentally miss your due date by ONE day (because they change it every month), they increase your interest rates to 40%. For an accident? They drop your credit line, decreasing FICO, justifying increasing rates and are SHOCKED when the customer cannot find pay 2 or 3 times minimums every month? Or, when their customers figure out that they will never make enough money to pay them off, ever? The banks are forcing honest people into bankruptcy, then running to the government for more cash.

We are being led into the abyss, by bean counting, elite, over educated, idiots.

Meanwhile, I lose MY customers, because of their stupidity.

Yeah, just keep thinking that fewer people, with less money, is the solution to ll our problems.

Feb 10 09:01 AM