Yves here. In this Real News Network segment, Bill Black describes the executive “heads I win, tails you lose” formula in the Sears bankruptcy.
GREG WILPERT: It’s The Real News Network and I’m Greg Wilpert, coming to you from Baltimore.
The department store, Sears, is in the process of seeking approval for bankruptcy restructuring that would allow it to pay its top three executives one million dollars in bonuses each if the company goes out of business. Also, the agreement would give other executives as much as 25 million dollars in bonuses. Meanwhile, Sears is closing hundreds of stores and laying off tens of thousands of employees who are receiving no severance pay.
Joining me now to discuss the Sears bankruptcy process is Bill Black. Bill is a white collar criminologist, former financial regulator and Associate Professor of Economics and Law at the University of Missouri – Kansas City. He’s also the author of the book, The Best Way to Rob a Bank Is to Own One. Thanks for joining us again, Bill.
BILL BLACK: Thank you.
GREG WILPERT: So according to the bankruptcy court filing, apparently top Sears executives would receive only 50,000 dollars if Sears remains in business, but if it goes out of business, they would receive one million dollars each. Doesn’t this amount to a reward for going out of business? What is the logic behind such compensation decisions, and why would a bankruptcy court even approve of such a thing?
BILL BLACK: So this is called a strategic bankruptcy. And an Ayn Rand devotee, Edward Lampert, through a hedge fund, bought Sears over a decade ago and has absolutely destroyed its value in pursuit of short run gains for himself. And this is, one hopes, the final stage of the looting, but God only knows, it may only be the penultimate stage of it. The whole idea of this kind of strategic bankruptcy is to avoid your debts to workers in particular. You want to reduce your pension fund and, as you say, get out of contracts that would normally require you to pay severance and such. But you have to keep the senior executives loyal to you, in particular, because Lampert was forced out as CEO. So he now is dependent on his former lieutenants to keep him in the game. And it’s a complicated thing that I won’t describe, but Lampert’s entities are involved in this supposed bankruptcy reorganization as what’s called a stalking horse. So he’s playing yet another role and the creditors believe he’s probably trying to loot the place one more time.
Now, Congress, in 2005, changed the bankruptcy laws to try to reduce these abuses. So these are the end stage looting where the senior managers yank a big chunk of the remaining cash out, and as you say, they are taking it straight out of the mouths of the workers’ kids. And Congress said you can’t pay people just for staying with a company in circumstances where there is a bankruptcy filing, you have to pay them for extraordinary performance that is way off the charts difficult to do. Except that this bonus pool that you talked about, the first tranche, the first group of this, pays off basically in two months. So there’s no conceivable way that these executives are doing anything extraordinary, and if they did, that would probably be worse news because what they would be doing is another short-term scam. Because these are the same managers that have been absolutely destroying Sears for a decade.
GREG WILPERT: Now, presumably, bankrupt companies are not required to pay severance, but clearly the executives are receiving a form of severance pay in the form of bonuses that they’re about to receive. So what does this say about the labor and bankruptcy laws of the United States? I mean, how does this even make any sense?
BILL BLACK: Well, it’s been a rigged system for decades. And Congress keeps coming back and making it more rigged. So anyone’s who’s got a college degree and has had these terrible debts pile up knows that they pretty much can’t discharge in bankruptcy anymore any of their student loans, and the only exception was Obama was finally forced into dealing with some of these fraudulent colleges, these for-profit colleges, and Betsy DeVos has gutted that as well. So it’s rigged against students, it’s rigged against workers and it’s rigged in favor of the executives. As I said, in fairness, Congress tried in 2005 to restrict this ability to pay something, as you say, akin to severance to the top executives. So they shouldn’t, in fact, be eligible at Sears. Indeed, all of them should have been fired and a trustee in bankruptcy should have been appointed.
Now, a trustee in bankruptcy can be appointed by the bankruptcy court where they don’t trust the management. This was done, for example, at Enron. And then you can have real investigations, as they did at Enron, that discovered and documented all the massive frauds, including the frauds by the top executives and the bankers. The unwillingness to do that, even in a place like Sears that has a terrible track record for over a decade by this management team of destroying value, shows you the complete outrage, that they’re willing to leave in control precisely the people who have looted and destroyed what once was one America’s great corporations, and even though they have a track record, as I say, of over a decade of just absolute dissolution, destruction of value.
GREG WILPERT: Now, why is a trusteeship in bankruptcy not being considered in this case? I mean, what is going on with it in terms of the bankruptcy courts?
BILL BLACK: So the strong presumption is against the appointment of the trustees. In bankruptcy jargon, the typical thing in a corporation when it’s called a reorganization, that’s Chapter 11 as opposed to Chapter 7, which is liquidation under the Bankruptcy Code, the strong presumption is that the debtor in possession, the DIP, as they’re appropriately called – in other words, the CEO ran the place into the ground gets to continue running it under the theory that they know the place best. In a place that’s simply mildly incompetent and had tough economic times, you can see the logic. But in a situation where much of this time has been in the strongest economic expansion, the Obama-Trump expansion is one of the largest and longest in U.S. history, and Sears has completely collapsed in it, the presumption should be the opposite in that kind of institution, especially when there are many serious allegations of insider abuse, as they’re most assuredly are at Sears, the strong presumption should be, A, that we appoint a trustee, and B, that that trustee investigates prior senior management.
GREG WILPERT: So now, the labor campaign group, Rise Up Retail, has pointed out that this is actually something also that happened with Toys R Us when they went out of business, that the top executive received millions and millions of dollars on this pay-in, the workers, the employees, didn’t even get severance. How common is this practice of providing these kinds of severance bonuses while paying not severance to laid off workers?
BILL BLACK: Oh, this is absolutely the norm. And again, strategic bankruptcies where you don’t necessarily have to go into bankruptcy, but you do so to screw the workers and benefit the executives, are extremely common among the wealthy. And that’s being done in this case, and Toys R Us is a good example. What kind of bonuses – remember, in 2005, Congress changes the law to say you’re only supposed to be able to get a bonus for really extraordinary efforts. Well, Toys R Us just died. It wasn’t brought back to life as some wonderful, efficient entity through brilliance of the management team under bankruptcy. So under the very logic of the 2005 Reform Act, they should have gotten zero in the way of bonuses. So you can see that’s yet another area where, in practice, the bankruptcy judges tend to be extremely generous to the senior management that have looted and destroyed the place, and extremely hostile to the workers. It’s an outrageous, utterly stacked system, and it’s getting worse, and it should be a major area where the House of Representatives, under the new majority, should be acting to reform the law.
GREG WILPERT: Okay. Well we’re going to have to leave it there for now. I was speaking to Bill Black, Associate Professor of Economics and Law at the University of Missouri, Kansas City. Thanks again, Bill, for having joined us today.
BILL BLACK: Thank you.
GREG WILPERT: So if you like Real News Network stories like this one, please keep in mind that we have started our winter fundraiser and need your help to reach our goal of raising 400,000 dollars. Every dollar that you donate will be matched. And unlike practically all other news outlets, we do not accept support from governments or corporations. Please do what you can today.
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I just had a thought. The discussion comments on this blog have the best “wheat to chaff ratio” of ANY discussion group I’ve observed on the net (and possibly off net too!) There really does seem to be a very high percentage of insightful, polite and rational discussion. I’ve been following since at 2007….
Sorry to bring down the percentage of insightful discussion. But I just wanted to make that observation. And while I am being complimentary the readership is a reflection of the quality of the blog.
@Mark – and a great deal of time and effort spent on moderation. I have a comment in moderation right now and I’m kicking myself for not saving it.
This site and Wikipedia receive money from me. Very grateful for our hard-working hosts.
Ah! There it is! And only in moderation for a minute – Yves and Co. you utterly rock!
Hi divadab,
Paying for wikipedia?
https://www.youtube.com/watch?v=nDPrpKDjQ5U
Once I tried to get something fixed on there. Something that is factually wrong. The page “acids in wine” says that higher pH of a wine results in a more blue-ish color. This is in fact totally false. Feel free to add bleach to a wine and note the color doesn’t change, until you pass pH 8.X (I don’t remember the endpoint) where it turns brown. Not a bit of blue on the way.
Wikipedia is no doubt a tool of the elite, as Chris Hedges’ interview describes, but for those of us scientists, it can also have spurious information, or outright factually incorrect information. Now the information is probably 100% correct most of the time, but because there is no peer review process – only an “is it published” requirement, it is fundamentally flawed.
If you are interested in funding something a little more interesting than wikipedia, you might want to check out Patreon where you can find all kinds of needy folks that are making some compelling stuff. Black Bear News on youtube, Historic.ly on patreon, or Tim Black, or just send more to Yves. :)
I agree 100%.
I would add that its not an accident that the btl comments here are very good – the NC Team do a lot of hidden work in pruning and monitoring comments to keep trolls and assorted tin hat wearers away, this is enormously time consuming (and no doubt occasionally like wading through sewage), so this is as good a time as any I think to extend my thanks to them for the excellent work.
I agree wholeheartedly. I am in constant awe of the depth and breadth of the knowledge and thought processes of the commenters here and NC bloggers. I learn things here and that is very very rare on the intertoobs. THANK YOU!!!
Same dynamic happened at Stelco in Canada. Management was older, approaching retirement, and they structured a buyout that garnered them the maximum amount of farewell money and left the workers with reduced pensions. Which meant they actively sabotaged a worker buyout as it would have been much less profitable to themselves in favor of a foreign takeover. Complete irresponsible greedy self-dealing, selling the company (which in the original sense was the people who worked there) down the river and feathering their own nests.
And don’t get me started on Conrad Black’s (now Lord Black, newspaper magnate) takeover of Dominion Stores. Pre-Black it was a prudently managed retailer where my Mom shopped (I still remember the jingle – “Why do more Canadians shop at Dominion, than at any other store? It’s mainly because of the meat, dah dat da dah, because of the meat!”). Its pension fund was in massive surplus which Conrad got his greedy little hands on by immediately closing the business and firing all the staff, thereby increasing the pension surplus, which he then dividended off to himself. (The story’s longer than this, but essentially, he took the employees jobs and looted their pensions). Nice fellow, Conrad, subsequently rewarded with a knighthood for being a rich Tory propagandist. Good on the Liberal government of the time (Jean Chretien, who also kept Canada out of the Iraq invasion) to force Black to renounce his Canadian citizenship in order to take up his knighthood.
Anyway, this is not new, grifters have been with us forever, it just seems to be more prevalent now as they seem to have taken over the government. I want to puke every time I see that Amway bitch open her mouth.
Thank you.
Black is Baron Black of Crossharbour, a suburb of east London, in the Peerage of the United Kingdom. It’s a life peerage, so can’t be inherited. He pontificates on the BBC from time to time.
A knighthood can be withdrawn for a variety of misdeeds, but a peerage can, sadly, only be withdrawn in the event of treason. Heirs are allowed to reclaim the peerage.
If one thinks Black is bad news, his wife is worse.
Some of these companies are getting nervous. Bain Capital and Kohlberg Kravis Roberts announced Tuesday that each had committed $10 million to a fund for former Toys R Us workers which is still $45 million short of the $65 million owed to former workers.
Edward Lampert however is in a class of his own. It is one thing to have private equity companies buy up companies to suck dry but Lampert did this all on his own due to the principles of Ayn Rand. I guess that this should be definitive proof that Ayn Rand’s principles don’t work in reality but I do not think that Lampert will see it this way.
After all, Objectivism is all about “the concept of man as a heroic being, with his own happiness as the moral purpose of his life, with productive achievement as his noblest activity, and reason as his only absolute”. It is just in this case the productive achievement is the size of Edward’s personal bank account. And in his now mind he gets to be a hero as well. Idjut!
off topic, but at the end of the video, youtube gives you suggested videos for what it thinks would interest you. i am getting steve bannon’s full address at oxford and jordan peterson’s nearly 2 hour british gq interview. note that i am on my work computer and not signed in to google/youtube.
however, i am signed in on my home computer and, for a many days now, been getting these two videos recommended to me there, where i am subscribed to the real news network.
it’s almost as if the billionnaire class were threatened by the “alt left” and are trying to shepherd people to the alt right in the belief that they might be receptive to those ideas and fall in line.
anyone else experiencing something similar?
I get alt-right video suggestions all the time. Not to mention the alt-right ads on my favorite leftie videos.
Yes. I hadn’t thought there was any political design in the recommendations – I thought rather it was algorithmic – videos of thoughtful people discussing ideas in long-form. And in some way opposed to the orthodoxy, which realnews, and Bannon, and Peterson do in obvious and subtle and different ways.
It’s not about the prescribed political scale. Liberate your mind. We’re not wings – we’re self-directing humans with interests and sovereignty over ourselves. Try reading the American Conservative – there are jewels among the dross. Or for that matter, this rather excellent, definitely non-party political site. The political spectrum labeling presumes people buy in to a basket of prescribed views that can be spread over a spectrum. What a crock!
i agree that the american conservative is worth reading and even bannon is good at diagnosing problems, but neither bannon nor peterson have any interesting solutions worth hearing.
it certainly is an algorithm working in the background, but one that tries to usher people from leftwing sources to rightwing ones.
I also get right-wing video recommendations all the time. Though I’m not sure if this is because the algos just default to pushing garbage like Peterson and Shapiro, or because the real left and ‘alt-right’ happen to share certain positions that are outside the centrist Overton Window.
Since 2008 (or even before) I’ve wondered at the messages that these degenerate practices that promote wealth over labor provide to ordinary Americans. While they may not follow economics, as with this blog, the assymetry of power is evident in the ways life becomes meaner and more precarious for all but the wealthy.
What are the consequences for us as societal cohesian declines and those who are insecure in their employment, sustenence, shelter and health, decide that the society they live in is not theirs? It would be interesting to see a sociologist’s take on this, though we are seeing what I think of are symptoms in our current politics and more overt intolerance. Wonder how much of racism, sexism and other destructive ways of looking at society has its origin in economic precarity?
Over at Wolf Street, Wolf Richter predicted awhile back that Sears would eventually go from Chapter 11 to liquidation.Time will tell whether this is accurate but is certainly intriguing.
In the above post Greg Wilpert notes that” “Meanwhile, Sears is closing hundreds of stores and laying off tens of thousands of employees who are receiving no severance pay.” Anyone who has ever worked at the store level, as I have, (not for Sears), figures out sooner or later that management views you as expendable.
They don’t care that you are understaffed and you don’t have the resources to hit the targets they want you to hit, or that the targets are unrealistic under the best of circumstances, you are continually expected to do more with less.
If you don’t like it the view is that you can go ahead and leave and they can easily find someone to take your place–whether or not they actually can, or more importantly someone competent, is a separate question. It’s not just associates that are viewed as expendable.
Higher-level management often also seems view store management as expendable as well with the rationale there are enough people, desperate to achieve a bit more money–retail managers, especially below the store/general manager level (e.g. assistant managers), often don’t make that much more than the associates they supervise–that if one burns out, they can easily be replaced by someone else.
If we the people remain so ill educated as to be swayed by talking heads on MSNBC, FOX news, et al such that sound bites control our thinking via emotions, then regular folks will continue to vote the Democrats and Republicans into office. Don’t know who said it, but we have the government we deserve. And as a consequence, looting of public companies, as in the instance of Sears, will continue.
Let’s be a little more, ah, “inclusive,” eh? The reason the mopes keep marching along in the same parallel and merging ruts is because of a long-game play by the Elites. They own the curricula of the schools, up and down. They own the means of propagandizing, the media as we call it. And have raised up a caste, practically a priesthood, of Bernaysian practitioners that are happy to mislead and sucker and stifle the rest of us for little Sonderkommando benefits and “loyalty rewards.” They own the “means of production.” They own the legitimizing mechanisms of government. They have in place the means to turn all “property” and “commons” from any kind of individual or collective ownership other than by the looting class. They own all our data, and have the Panopticon plugged into all the bits of our lives. they do, it seems to me, actively operate in synchrony to achieve all these “victories” in the war that one of their most successful practitioners, Warren Buffett, described very in-our-faces: “Of course there is class warfare, and my class, the rich class, is waging it. And we’re winning.” Follows the Powell Memorandum, and the observation of Jay Gould about how he could pay half the working class to kill the other half. They even recognize the actual structure of this war, for war is what it is — two classes, looting and working. As much a “war,” vastly asymmetrical, as what the Saudis are doing to Yemen or the Israelis to the Palestinians. Or the Empire to all those little sh!thole countries.
So do not be laying this on the mopery, as some kind of Randian failure to surmount and “succeed.” It’s hard to contemplate that in fact we are the soft, way too soft, targets of a vicious and prolonged war being waged on us by stealth and perversion and violence. Those “sound bites” are part of the long campaign to transfer all wealth and power to an ever smaller set of Looters.
Excellent comment. One nit. I think Buffett was being self-critical, certainly of his class, in that comment about the existence of class war in America, that only one side – his – had been waging it and had essentially won it, all while denying doing any such thing. I also think he was correct in his observation, even while he, too, feasted on the offal the war produced and continues to produce.
Others think Buffett was just gloating. Given his status as a serial looter and near the top of “the world’s richest men,” who maybe is a tiny bit concerned that the rev olution might start before he is comfortably deceased, and trying to research the interview and see his remark in context, I think there was quite a mixture of messaging in that remark. Not to mention a subtle invitation to embrace the futility of “resistance.” But reasonable persons can disagree, and usually do.
Maybe trained to deserve would be more true. We are trained to act as if we deserve this evil, and it is evil, have no doubt. A lot of time and resources have been used by the powerful to create a public will act as they want, which is to increase their already great wealth and power, while destroying the public’s ability to act in their own best interests. It is a long term campaign of political disaster capitalism.
Darn it JTMcPhee, you just beat me with a much better comment!
Sorry.
Of course many words often are worse than the terse few that capture the moment. Like Samuel Gompers and “MORE,” though he did go on to expand the categories he would apply that to:
“What does labor want? We want more schoolhouses and less jails; more books and less arsenals; more learning and less vice; more leisure and less greed; more justice and less revenge; in fact, more of the opportunities to cultivate our better natures, to make manhood more noble, womanhood more beautiful, and childhood more happy and bright.”
And of course “more-ism” is the the disease of consumption that’s killing us and the planet, a warped perversion of what Gompers was calling for. Better a “genteel sufficiency,” maybe, where one can eat to “enough,” and drink to “full hydration.”
I believe this article was linked here at NC in the past, but it kind of lays out how the Looters are connected: “Interlocks and Interactions Among the Power Elite
The Corporate Community, Think Tanks, Policy-Discussion Groups, and Government,“ https://whorulesamerica.ucsc.edu/power_elite/interlocks_and_interactions.html
One wonders if the up-coming generations of mope humans will figure out how to engage in the kind of asymmetric responses to the War of the Riches being waged on them that are so effective in “sh!thole” parts of the world. “We didn’t have to win the battles, all we had to do was not lose.”
Amazon killed Sears, aided and abetted by Sears incompetent management.
The Sears BK is all about developing the already spun off real estate, after making Sears and empty shell paying rent to the Real estate holding company.
The employees should be awarded the Real Estate Holdings.
I think Sears management was going to slaughter the company, and then butcher and sell remains whatever Amazon was doing; the company ceased being run as an ongoing concern more than a decade ago so its then still great resources was merely to be stolen from rather than used for the company.
What I want to know is what justification the bankruptcy judge used not to put the company under new leadership as was done for Enron. The stench of corruption here is so great it is like a field of corpse flowers in full bloom.
Yes, but Sears is in far worse position than Nordstrom or Macy’s. That’s because Lampert looted it and is drove it into the ground to get his hand on its real estate portfolio using self-dealing where his hedge fund has highest-priority secured loans to Sears backed by real estate far more valuable than the loans themselves. The moral hazard made bankruptcy inevitable, even if he hadn’t starved the company of investment.
When hedgies are looking for a company to loot, they DO look for the weak and sickly ones. After all getting control cheaply is the FIRST step. But that is not the only step. Having assets that can be sold off, and liabilities that can be shed in a bankruptcy are also important factors. I would guess that whether the individual store is leased from some mall, or was originally owned by Sears and is now leased from the Lampert Controlled RE company that was spun off from Sears is the MAIN factor on which stores have closed or are in line for closure.
Yes, Sears was in decline, but it might or might not have been able to survive for decades or even turn itself around if it wasn’t being managed with an eye to maximize looting potential and as some sort of Ayn Rand story with Lampert playing John Galt.
here’s where the rubber hits the road
https://www.bisnow.com/national/news/retail/sears-failing-reit-seritage-flourishing-warren-buffett-92265
The divergence of the two companies’ fortunes is evident in the value of their stocks. As of midday Tuesday, Sears Holdings was trading at $1.26 per share — down significantly from the $8.62/share it was trading at 12 months ago; Seritage shares were up 6.6% to $50.71 Thursday compared to the $47.37 that company traded at a year ago. The latter company has inspired such investor confidence that Warren Buffett’s investment vehicle Berkshire Hathaway gave it a $2B loan, which the Times said will help fund its redevelopment efforts.
St. Warren? say it ain’t so… but this is where the money is…
oh look, this is what they have in mind
Among Seritage’s planned redevelopment projects are a mixed-use complex with loft apartments in Chicago, a retail village in the Bay Area and a mixed-use apartment complex in Hicksville, Long Island, which the Times reports is in battle with residents over its fit with the downtown.
History of Sears:
As part of this restructuring, the Sears Merchandise Group, reorganized around its apparel, home and automotive businesses, closed many of its under-performing retail locations including some mall-based stores.
leaving a smaller — but successful — direct-response business.
Thta’s when the Internet was obviously going to take off…..the time of Mosaic and Trumpet windsock, which I recall downloading in the 4th quarter of 1993.
Even at the time it was a collective “huh?” The profit margin might always be lower, maybe, but even using the phone and paper catalogs of the time, home delivery (or even to one of the many, many local stores) could have been profitable. This is just an example of short term thinking. Even if the company’s catalog division only broke even, or even made a slight loss, the advertising and customer good will would have spilled over into the profitable areas and ultimately make the company more money.
All of these department store chains that are being destroyed built up generations, sometimes over a century, of strong customer loyalty, institutional knowledge, and infrastructure in work done by millions of people; much, maybe most of the retail industry has been destroyed in roughly a generation so that that some few thousands of people can make real money.
This isn’t even capitalism, or communism, or socialism, or any other -ism. It is as if a business class composed of marauding bands of nihilistic orcs was determined to burn it aaaallll down. Because they can!
Think about what Sears did when it closed its catalog ops. It had a distribution network in place, that Bezos is only now beginning to organize for Amazon.
All they needed was to basically, put that catalog operation online.
I don’t know the timeline, but decisions like that probably enabled the Lampert crowd to get their hands in.
I think they could have been ‘Amazon before Amazon’
@Synoia. I was right behind you online, end of ’93 into ’94. I still have the receipt for Trumpet, which had to be purchased/licenced in Aussie bucks, from the developer.
This after a short dalliance with AOL, which enabled me to find info about how to find a real ISP, and get setup with a ‘real’ connection. I did not know at the time that a Windows sockets was already available for Win 3.11, and I coulda saved my money.
And the PC cost about 1500 bucks, and was the cheap one…that was about my monthly salary, at the time.
It must have been the thing to do in the 90’s… “focus on the core business” and spin off anything not considered core. I live in Rochester, NY and that was the Kodak strategy during the 90’s. If you look at almost every business spun off and they’ve become very successful. They’d have been better off looking at all of their assets and skills and re-imagining the whole company. But obviously that wasn’t considered “prudent” management at the time.
There are two illogical standards in business that I see used all the time. “Layoffs are good” and “you need retention bonuses for top management for companies in distress/bankruptcy”. I often marvel at the ability to believe two impossible things before breakfast that you need to believe both of these things.
On layoffs, as I have explained to a few of my investing more conservative friends over the years, they can mean only two things, both of which are indicative of mismanagement. Either the company has contracted so much over a relatively short period of time that they have excess employees which cannot be handled by ceasing to replace workers leaving the force. Outside of a disaster (natural or man made) Said contraction means that management has either overhired, over expanded or has failed to understand their market, hence mismanagement. If there is not an excessive workforce, they are downsizing for the sake of downsizing in order to improve their corporate reports with no consideration of the stress they are going to be putting on their workforce. Thus engendering slowdowns in out put, increased service times and things that obviously piss out the customers. Both as I said are mismanagement and should be big signs not to buy or otherwise do anything that would reward said management. But that is never what you get when you hear about company X laying off workers outside of bankruptcy.
As for retention bonuses, my response is ‘you work here as long as your contract says you work here unless we fire you – no bonus for you!’ The people who have the most say over policies that have put the company in bankruptcy should be the last ones who get any kind of a bonus. And the courts should absolutely be enforcing this as it not only cheats rank and file employees (who should be considered) but also creditors but very likely make it harder for said companies to restructure in a fashion that will save them.
But hey, what do I know. I still think most top management should have it pounded into their brain daily that without lowly workers and naive customers they have no company. And you don’t cheat either of them.Although in a sane world with real market controls, that would be how it would work and such instruction would not be necessary.
The people who believe such doublethink are not only not harmed, but often benefit from such thinking, because they receive approval for repeating it; sometimes they actual are paid in part to do so. So why not believe it?
I, too, have always marveled at the claim that the managers who mismanaged a company into failure and bankruptcy consider themselves absolutely, positively the only ones in existence who can manage a company out of it. And that none – none – of the workers, and none of their benefits have any role in keeping a company working, doing what it’s designed to do, and making a buck.
Magical thinking must be taught both years in the MBA. Otherwise, one can only believe that running a business is irrelevant if you can feast on it on the way to, in, and coming out the other side of the knacker’s yard.
It is redolent of the evisceration of BHS in Jolly Olde …
https://www.independent.co.uk/voices/editorials/the-demise-of-bhs-is-a-sickening-story-of-capitalist-excess-a7071301.html