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    Monday, March 6, 2017

    Uber, Corporate Abuse, Winners And Losers, And Trump

    I know this blog is supposed to provide at least some (hopefully) original thought, but occasionally you read something that says everything you might want to say but in a much better way than you possibly could.

    Erik Loomis highlights a piece that Miya Tokumitsu wrote about Susan Fowler's having to endure rampant sexual harassment at Uber with the firm's clear approval. Says Tokumitsu, "Fowler’s letter highlights how employers take advantage of their employees’ goodwill, using it as an excuse to inflict or ignore poor working conditions. Generally, workers want to succeed...Employers, particularly prestigious, white-collar firms like tech companies, banks, and universities, rely on their employees’ internalized desire to achieve...She did what most of us probably would do in her situation: she endured...Even an accomplished worker with highly marketable skills like Fowler has little choice. Most people require a stable income to survive, and quitters forego the right to unemployment benefits...On top of income, life’s practical realities make the sudden withdrawal of labor extremely onerous. Even if you could find a new employer right away, are you really going to disrupt your children’s school year, leave your community, break your lease or sell your house, give up the fringe benefits from your current job...Employers are banking that you won’t. Any amount of sexual harassment or bullying is unacceptable, but they know workers will put up with a fair amount of it because...the costs of quitting are so high."

    Loomis then adds his own thoughts, "The problem isn’t Uber so much, even if that company is especially bad, as it is a broader workplace culture where we actively contribute to the decline of our own rights by not taking vacations, by taking work home with us, by not standing up to watching others being harassed, by seeking to please our bosses, by valuing performance-based bonuses that are driven by favoritism, racism, and sexism. Of course, none of this is the fault of a single worker. It’s the fault of a cancerous corporate culture mixed with the connection between unions and blue-collar manufacturing labor in the American mind that convinces these workers to see themselves more as aspiring partners than as workers with rights."

    In many ways, it is the thinking behind that "cancerous corporate culture" that has actually given us Donald Trump. The current thinking is an even more destructive mantra than Vince Lombardi's "winning isn't everything, it's the only thing". It is the trader's mentality and it is best summed by looking at the world in a binary way. If my opponent loses, then I must win. And most of us spend our entire lives, from childhood on, being urged to be a "winner". As Loomis says, workers are desperate to see themselves as partners on the winning management team and will endure so much in an attempt to get there.

    The story I love to tell about this is when that now convicted felon, Michael Milken, was in his heyday, he was giving out the annual bonuses to members of his firm. One particular trader had had a spectacular year, bringing in over $100 million in business to the firm, and Milken gave him a $1 million bonus. (This was the 1980s and that was big money back then.) The trader objected saying he felt he was worth at least $5 million. Milken told him that he would love to give him that money but that would mean he would get a bigger bonus than Milken himself. The poor guy, thinking Milken was being frugal himself, dropped his plea and went away fairly contented. Subsequently, during the investigation that led to Milken's pleading guilty to securities and tax fraud, the trader found out from public documents that Milken had actually given himself a $50 million bonus for the year in question. Milken could have easily given that trader the extra $4 million and it probably wouldn't have even had to come out of Milken's bonus. It was just that Milken felt better that he made the poor guy a "loser" in the bonus discussion.

    That attitude pervades upper management in all large US companies these days. Screwing their workers while they take millions in bonuses is more than just outright greed, although there is plenty of that. It is all about making them feel like "winners" because they can make their employees "losers". Adding to that destructive attitude, is that they also need to be seen as winners to their peers in their industry and their social circle.  Many of these people seem to have at least some worry that this attitude will only last for so long before the masses come after them with pitchforks and fire, which is why you see so many rich people like Peter Thiel who have these survival plans in place, like his compound in New Zealand or bunkers, essentially converted missile silos, in the Midwest with their own private security guards. But they get away with it because so many workers dream about and have the drive to join the "winner's circle". You see it in every company, co-workers who will take credit for other's work, kiss up to the bosses, screw their own peers, and especially their subordinates, at the drop of a hat, all in the hopes of moving up to where they will be "winners" and not just another one of the "losers". Other more honorable people like Fowler work even harder and endure even more abuse.

    On the political side, you can see it in the entire Republican party. So much of their focus in the last eight years has been on making sure that Obama became a "loser", thinking that would make them winners. It drove their entire mentality regarding health care. So now that they have actual control, they still have no plan for healthcare because making Obama a loser meant you never had to formulate a positive policy, just make sure his policy didn't work. Trump works in a similar environment. He spent most of the primary campaign denigrating his opponents as "losers". It is his favorite pejorative for anyone that he sees as a threat and it makes him, and his supporters, who have been the "losers" now for decades, feel like "winners" when he says it.

    In many ways, this mentality is why capitalism has gone so far off the rails in the last few decades, failing millions of workers in the developed world. The essence of the ideal of capitalism is that there are multiple winners. Innovation means lower prices for consumers, meaning potentially higher profits, which can be shared with those same workers/consumers. "Free trade" is built on the same idea, that both countries will benefit from an open trading relationship. Yes, there will be some industries that will grow and some industries that will shrink, but the benefits from the bigger pie can be used to help those displace by the new arrangement, making everyone better off. All of that has gone out the window in the last thirty years. Driven by the myth of  maximizing shareholder value over actual workers, higher profits go to management bonuses and payouts to shareholders. Winners from trade just pocket the profits and the losers get nothing. For business and political leaders, the world is simply a binary choice between "winners" and "losers" and to the victor goes the spoils. And we end up with Donald Trump.

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