If President Obama were anything like FDR, he would have urgently taken to the airwaves today with his address to America sounding something like this:
“June 1, 2009 – A date which will live in infamy- Yesterday, the Nation buried an American Giant which alone is responsible for pioneering the modern industrial era…. But in the day where financial engineering has long taken over from industrial engineering, there will be little lamenting on the streets of America. Instead, there’s an eerily devilish dance taking place upon the grave of General Motors by its bondholders, for their derivative bets have paid off by sending this giant to its grave. These out of control charlatans will soon announce record profits for themselves with the blood of tens of thousands of families on their hands…”
If you would indulge me a bit further, an FDR-like Obama would conclude….
“Today, America has lost its moral compass. On Wall Street, the rich hires the intelligent to export the job of the poor. Then turns these same toxic tools against that very ladder that got us here. Today, I’m announcing the end of Wall Street as we know it. There will be no more flooding of America with cheap money and watching it become complaisant and bet on its failure. Today, I’m outlawing the entire practice of option trading from all stock exchanges and placing hedge funds under heavy regulation. The creation of financial derivatives of all kinds will be outlawed as well. There will be no more betting that urges us to fail so the few can collect Trillions from the hard earned wages of the many. How many more American Icons would have to fall before Wall Street wakes up to its evil ways…..”
Much more would have been said, but this is 2009, and leaders fear the consequences of straight talk and the media that would have covered the event suffers from 2 things: 1. It is owned by Wall Street, and 2. It suffers from the worst case of Attention Deficit Disorder.
The legacy of GM is so intertwined with that of its founder Alfred P. Sloan, a genius MIT engineer and one of the pioneers of the American Industrial business model. So much so that MIT, Stanford and The London School of Business created their business programs based on his teachings. He is also known for having pioneered modern corporate finance. Things like rate of return (ROR) and return on investment (ROI) are standard parts of Finance 101 in every business school in the world today. But,what made Mr. Sloan unique, in my opinion, was that he never boasted about any of his accomplishments. For years he lived in the same apartment in NYC just a few blocks away from his office. When he’d visit Detroit, he would stay in a “sleeping room” upstairs at GM’s corporate offices. This is how good leaders are made to be great. When GM filed for bankruptcy yesterday, the legend of Alfred P. Sloan and the story of American industrial innovation came to an end.
Yes, on this day after we buried what once was the biggest industrial giant in the world, the streets were eerily quiet. America has slowly been lulled to its own industrial death, and we’re too numb or too dumb to do anything about it.
Yes, on the day we buried GM, The Dow Jones went up 221 points and two Giants who shaped America’s twentieth century; Franklin Delano Roosevelt, and Alfred P. Sloan were turning in their graves. This is the way America’s manufacturing world ends. Not with bang but a whimper.