Column #36 WHAT COULD THE EXECUTIVES AT GM HAVE BEEN THINKING?

(Week 6 - Saturday, Sept. 6)

The shutting down of the auto plants in Flint, Michigan, and their relocation to locales (like the desert along the American border in Mexico), in spite of the evidently overwhelming preponderance of physical and human reasons not to do so (see Col. #32), is often held up as a prime example of the "greed and stupidity" that supposedly has infected corporate America. To be sure, it would not be difficult to find justifications to criticize the move, but looked at from a wider perspective, is the matter really that simple?

I was not present at any of the board-room deliberations at which it was decided that the factories in Flint had to go, but I can well imagine that there were present expert accountants with flip-charts heavy with graphics and ledgers full of numbers that presented 'carefully researched facts' and 'reasoned arguments', the 'bottom line' of which gave 'incontrovertible testimony' that GM had no other financial option than to move those plants. Furthermore, I can well imagine that these human beings - accountants, board members, even Roger Smith himself - may have acted, more or less, in what they perceived as good faith. As they saw it, presumably, did they not have a company to save, and would not the continuing 'high cost of labor' that would be incurred by a decision to stay in Flint result in the closing of these plants, and the loss of local jobs, anyway? After all, they had only to look around them and see most of corporate world coming to a similar conclusion in their own respective spheres.

Is it possible that all these supposedly "best and brightest" people in the business world could be "greedy and stupid," or was there some greater reality (real or imagined) at work in this now global economy that they felt compelled to recognize and make the necessary adjustment to? In my experience I have had occasion to work, from time to time, with people from the executive suites (as well as many from the factory floor), and have found them generally to exhibit the same tendencies for human integrity and corruptibility that I find in any group of human beings. I have experienced them on the whole, in the terms of their own perceived worldview, to be fine and conscientious people.

Notwithstanding, the question still remains, how then could such a judgment (abandoning Flint and relocating the plants), which seemingly flies in the face of every physical, human and indeed economic reality that lies around them, seem to otherwise intelligent, knowledgeable and responsible people to be a necessary conclusion?

The answer, I believe, lies in the deceptiveness that is an inherent part of the private-bank-loan transaction. It arises because the transaction is not a common sense borrow-money-and-pay-it-back routine (as it purports to be), but rather a money-creation-and-issuance process by which a compounding fee (called "interest"), that is in a practical sense unpayable, is attached. Thus the terms used to describe this process, such as "borrow," "loan," "debt," "interest," "payback" and "satisfaction," all have a disarmingly familiar ring, but the actualities of the steps they identify do not fit the their common sense meanings or dictionary definitions.

The building of a whole monetary universe on the foundation of an unsound mode of creating and issuing currency, and an inaccurate use of language associated with the process, has spawned a financial culture that is skewed at virtually every turn. There is not room to do the topic justice here (it will be explored as these columns continue), but the extent to which this has compromised the ability of persons in our civilization to think clearly on matters concerning money is jarring to behold. I find this to be true across the full spectrum of society, white collar and blue included.

Not only management, but the participants in the labor movement in America as well, would, I suggest, benefit from examining more closely their roll in the whole Flint drama. Only then will they be able to come to grips fully with the tragedy that has befallen them, and move forward with confidence and clarity into the future. I will take up that thread in the next column.

Richard Kotlarz
richkotlarz@gmail.com

The complete set of columns from this series is posted at the following websites:
http://economictree.blogspot.com/
http://www.concordresolution.org/column.htm