That man is the late and lionized CEO of General Electric, Jack Welch, whose relentless pursuit of quarterly earnings and shareholder value at the exclusion of everything else influenced generations of CEOs and his approach could be the single biggest reason the U.S. finds itself in the precarious economic and political state it is. Ralph speaks with New York Times columnist, David Gelles, who wrote the book on Welch, “The Man Who Broke Capitalism: How Jack Welch Gutted the Heartland and Crushed the Soul of Corporate America — and How to Undo His Legacy.” Plus, Ralph rails against the proposed congressional handout to the microchip industry and the Senate oversight committee’s lack of oversight of the Pentagon budget.
David Gelles is a reporter for the Climate desk and the Corner Office columnist for the New York Times. He has previously worked with the Financial Times. His latest book is The Man Who Broke Capitalism: How Jack Welch Gutted the Heartland and Crushed the Soul of Corporate America — and How to Undo His Legacy.
There’s something unique about the role of the CEO in this country. And I certainly make the case in this book that it’s not necessarily for the better… We have endowed these men with not only tremendous power and authority but also with a huge amount of impunity where they – by and large – are not only not held accountable for their actions but are indeed rewarded to the tunes of tens of millions of dollars – or sometimes hundreds of millions of dollars – for their actions, irrespective of the consequences on the broader society.
David Gelles, The Man Who Broke Capitalism
It gives lie to their talking point that they’re really trying to maximize shareholder value. Because who’s picking up the tab for that kind of excess? It’s the shareholders, of course. It’s your investors. If you really want to demonstrate how much you care about the shareholders, be a little frugal once in a while. Don’t travel around with an extra chase plane stocked with steak and lobster following behind you, just in case yours breaks down.
David Gelles, The Man Who Broke Capitalism
Yes, he made [GE] larger. Yes, revenues and profits increased during that time. But the fundamental health of the underlying businesses often were deteriorating.
David Gelles, The Man Who Broke Capitalism
I don’t want to deprive Trump of the point of pride that he might have in being the true progenitor of some of his own nefarious behaviors, but there’s no doubt about it that Trump and Welch had a lot in common and had a long relationship together.
David Gelles, The Man Who Broke Capitalism
[The Man Who Broke Capitalism] raises the question of concentration of power. Not just in a few giant companies in our economy. But concentration of a corporation’s power in one person: the CEO.
Ralph Nader
[Welch’s acolytes] hollowed out communities all over the country in the US. So, it isn’t like, “Okay, they were greedy, but they built the mighty pillars of the US economy,” as we would say in the old days with Carnegie and Henry Ford and others. They hollowed out the economy. And the companies that they ran, they ran into the ground.
Ralph Nader
The Man Who Broke Capitalism