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think they meant “ouroboros capital management”

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Cerberus Capital Management, whose largest institutional investors include the California State Teachers’ Retirement System and TIAA-CREF (the latter handles my meager retirement accounts), purchases Chrysler, and immediately installs an anti-labor goon as CEO… Robert Nardelli, referred to in this USA Today article as "the poster child of poor workforce relations," is the goon in question. In other words, money managed on behalf of (mostly) union members has, via the wonderful ethical laundry program of capital management lp type stuff, come around to set other union members up for a royal ass-kicking and general despoilation, mostly of, yes, their retirement benefits. Following so far?

We’re not very far away from a scenario in which, say, a car company’s employee-managed retirement fund, via a capital management company, purchases the very car company in question, and in a frantic grasp for capital, robs the very workers who hold the fund of retirement benefits before breaking the company into parts and putting everyone out of work. So everyone ends up with no job, no health benefits, and slightly higher retirement account balances. Except, of course, for the new CEO and the managers in the CM firm, who walk away with tons of cash.

Ha! That would be hilarious! Almost as funny as California school teachers ("inadvertently") fucking the guys who make the Chryslers. (which is not as funny, because it is not as uncanny… plus there’s a rather obvious white-collar, blue-collar thing going on, though I’ll bet the blues on average earned more than the whites do now…)

At any rate, there is of course a message in all of this, a blindingly clear one about complicity and the impossibility of clean hands (like I said, TIAA-CREF manages my money too!), and what the "end of the proletariat" means when it results in the birth of a class of fractional capitalists who unconsciously read their quarterly-statements unaffected by the scenes of cannibalistic creative destruction playing out between the lines of figures.

Written by adswithoutproducts

August 8, 2007 at 12:32 am

7 Responses

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  1. Hey! Shout a little louder, I can’t hear you!
    Or, instead, think about this: Neither you nor I know what it will take to keep Chrysler (and ALL its jobs) out of the tank. We do know that the tank is precisely where it was heading under the prior management.
    Cerberus has a good long-term record of managing its acquisitions and preserving companies. Will it preserve all of Chrysler’s bloated staff and all its production inefficiencies? Probably not. Should it? Certainly not.
    But if some job cuts and changes in union rules are the price of Chrysler’s survival (and the survival of many of the existing jobs), should we all try to kick Cerberus in the teeth and let Chrysler go down? I don’t think so.
    And if Cerberus’s partners make a bundle on Chrysler’s future success, I say more power to them. They will have taken big risks to save a dying company, and they deserve the encouragement of a big reward.

    Herb M.

    August 8, 2007 at 6:48 pm

  2. Are you sure you didn’t mean to use this picture?

    My friend passed along this NYT article which I submit for your disgust and amazement. Taking “eat the poor” pretty literally, this author suggests that evolution spread the genes of the English upper class through society and prompted the Industrial Revolution.

    Some gems: “Just as there is no agreed explanation for the Industrial Revolution, economists cannot account well for the divergence between rich and poor nations or they would have better remedies to offer.”

    Or the “economic historian” himself:

    Dr. Clark says the middle-class values needed for productivity could have been transmitted either culturally or genetically. But in some passages, he seems to lean toward evolution as the explanation ….“The triumph of capitalism in the modern world thus may lie as much in our genes as in ideology or rationality.”

    Gah! Now I need a bath.

    Sorry to take over your blog comments.


    August 8, 2007 at 10:58 pm

  3. Herb,

    That’s right. Thank god everything is just so damn inevitable. If it weren’t, we might have to feel a bit down about the consequences of our actions, what we allow others to do on our behalf, etc etc


    Well, that would work if it were only a kidgod eating another kidgod instead of Big Daddy doing the eating, in this case. Or maybe all of the kidgods eating each other (see Totem and Taboo, actually, for more on that…)

    On the second point, thanks for the link, and I’ve posted on it…


    August 9, 2007 at 12:06 am

  4. CR,
    Actually, I thought most of my posting was about considering the consequences of action vs. non-action.
    Should we refuse to throw a life-preserver to a drowning man because we don’t like its design or color or manufacturer?
    Chrysler was drowning, and its workers and retirees were going down with it. They may still drown — despite Cerberus’s efforts — but let’s keep an open mind, at least for a little while.

    Herb M.

    August 9, 2007 at 12:22 am

  5. Herb,

    One of my favorite passages in all of literature comes to mind. It’s from Conrad’s Heart of Darkness.

    “One thing more remained to do — say good-bye to my excellent aunt. I found her triumphant. I had a cup of tea — the last decent cup of tea for many days — and in a room that most soothingly looked just as you would expect a lady’s drawing-room to look, we had a long quiet chat by the fireside. In the course of these confidences it became quite plain to me I had been represented to the wife of the high dignitary, and goodness knows to how many more people besides, as an exceptional and gifted creature — a piece of good fortune for the Company — a man you don’t get hold of every day. Good heavens! and I was going to take charge of a two-penny-half-penny river-steamboat with a penny whistle attached! It appeared, however, I was also one of the Workers, with a capital — you know. Something like an emissary of light, something like a lower sort of apostle. There had been a lot of such rot let loose in print and talk just about that time, and the excellent woman, living right in the rush of all that humbug, got carried off her feet. She talked about ‘weaning those ignorant millions from their horrid ways,’ till, upon my word, she made me quite uncomfortable. I ventured to hint that the Company was run for profit.

    “‘You forget, dear Charlie, that the labourer is worthy of his hire,’ she said, brightly. It’s queer how out of touch with truth women are. They live in a world of their own, and there has never been anything like it, and never can be. It is too beautiful altogether, and if they were to set it up it would go to pieces before the first sunset. Some confounded fact we men have been living contentedly with ever since the day of creation would start up and knock the whole thing over.

    The joke here, of course, is in the long run on misogynist Marlow. But beyond his hypocritical projection here (he is only lucid in diagnosing the cynicism of others, not so much with himself…) he’s got it on the ball.

    You know you are headed in the wrong direction when you start reading the pursuit of profit as anything more than the pursuit of profit – exactly where you are headed here:

    And if Cerberus’s partners make a bundle on Chrysler’s future success, I say more power to them. They will have taken big risks to save a dying company, and they deserve the encouragement of a big reward.

    See how you’ve set it up – as if the partners’ profit is a sort of afterthought, a kind of tip for doing a good deed. Just like Marlow’s Aunt…

    I feel very, very safe with the following rule of thumb: labor union members should not derive profit from the reduction of other union members benefits. I am a union member, I don’t think I’m deriving profit from this deal because I’m invested in the wrong sort of TIAA-CREF accounts, but if I am, this is not a healthy thing.


    August 9, 2007 at 12:35 am

  6. CR,
    Unfortunately, the combination of my low IQ and poor memory doesn’t permit me to quote from Conrad — or anyone else — at length.

    However, I will say that I didn’t mean to imply that Cerberus’s gains would be an “afterthought.” I was trying to say that if Cerberus (and TIAA-CREF!) made money on Chrysler, they might be encouraged to take similar risks again in another desperate situation, and perhaps save another company and more (union?) jobs. And make even more money! And on and on. (By the way, I too am a TIAA-CREF participant.)

    Herb M.

    August 9, 2007 at 11:22 am

  7. No need to disparage your own IQ etc. I quote for a living. And there are sites to cut and paste those quotes from. But do read the scene – it’s rather wonderful…

    Look, there are no easy answers re: what to do about corps like Chrysler. But the only answers that ever get picked nowadays are those that involve shedding union benefits, force marching unions in a race for the bottom possible compensation package, and line the pocket of investors as all this happens.

    Are you in a union? How are you going to feel when it’s your turn to have your unsustainable and counterproductive package cut? Perhaps you’re an educator who works for the state, like me. If so, I’ll bet your school system, like mine, would really, really benefit from some surgical rationalization. Just some health benefits here, job security there. Freeing the hands of the administration to Grow and Outperform and Become Efficient!

    It’s funny that way – on the labor side, we all need – for the good of everyone – to slice off a good chunk of our own well-being. If it hasn’t come for you yet, it will soon. But those privatizers and consultants and fund managers who run the show, their beach houses just get larger.

    Union members should not be involved in “rationalizing” other unions. That is the long and the short of it, as far as I see it. There are far too many, outside of our fold, who are ready and willing and armed to do it for us.


    August 9, 2007 at 11:45 am

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