This Reuters story tells us that Jack Welch, that supposed genius of American capitalism over the last 20 or so years, believes that our economy is tanking (gosh, what brilliant insight)…
“I now believe we are in for one hell of a deep downturn,” Welch told the World Business Forum in New York on Wednesday, adding that the first quarter of 2009 will likely be “brutal.”
Until recently, Welch said, he had believed the U.S. economy could avoid recession, but he has changed his mind.
“I am now caving,” he said. “Get ready for real tough times. They’re coming. There is no credit available.”
It makes me laugh in a somewhat rueful way to see members of the “pay no price, bear no burden” crowd like Welch tell us that times are going to be tough now; where the frack has he been for the last eight years? Shooting the “back nine” at the Nantucket Golf Club, I guess.
Welch said mortgage lenders, legislators, investment bankers and others are all to blame for the crisis, which stemmed from easy credit and investors’ appetite for yield.
“The problem was money didn’t cost anything,” Welch said. “People took swings.”
The problem was also the fact that robber baron CEOs such as our boy Jack ushered in the era where a company’s share price trumped product quality and loyalty to employees, to the point where Welch fought attempted corrections of excessive CEO perks and regulatory reforms such as Sarbanes-Oxley.
And even though Welch supported his successor Jeffrey Immelt in the Reuters story, this tells us that he would “get a gun out and shoot (Immelt)” if he missed GE’s projected goals again (Jack is such a compassionate guy, isn’t he?).
Also, as David Sirota notes here, it would be easier to dismiss Welch as an overhyped, well-to-do crank were it not for the fact that ciphers like President Clueless continue to give credence to Welch’s greedhead schemes (typified by Welch’s “barge mentality” which, as Sirota notes, means that any “captain of industry” should just be able to move a company anywhere he or she wants to when those pesky unions, fair wage laws and competitive employee benefits impinge too inconveniently on executive compensation).
But the macro-level issue in all of this, as Sirota notes, is that economies of nations (this one in particular) are melting as Welch and his pals continue to demand the world for their failed “leadership” at the expense of the labor of their employees (and speaking of melting, Welch is also “a global warming skeptic” according to Wikipedia, even as his former company takes some halting steps in the right direction on that urgent matter).