Saturday, September 23, 2017

Profiles in Greed

Ulysses S Grant, Carl Icahn, and the character of capitalism.

Listening to a long podcast series about the Civil War, I was struck once again by the unusual character of our 18th president. Every one who knew him agreed that he had no sense for business. Yet he led the US army to a series of strategic victories, and wrote one of the great military autobiographies, and clearly did not lack intelligence. What makes the difference?

To contrast, a recent profile of Carl Icahn, paragon of US business and hero of Donald Trump, paints a character of quite a different color. Highly intelligent, yes, but with the added characteristics of intense greed and minimal scruples- apparently a modern-day Ebenezer Scrooge.

Grant was a forthright person, in love and war. Indeed, the archtypal story of his childhood was about a negotiation for a horse where he told the seller straight out what he was willing to offer, which thus became what he paid. Grant was very good with horses, possibly a mark of a character with less guile than normal. People, with their less scrupulous machinations, were more difficult, which clearly led to many of the disasters of his presidency. Does warfare require guile? On some, very strategic level, yes. But generally, clarity, consistency, attention to detail, and courage are more significant virtues. I don't think his Civil War campaigns were marked by strategic cleverness or deceit, but more by sound military reasoning, siezing strong points, deploying overwhelming numbers, fighting doggedly, and pursuing advantages opportunistically.

Ulysses Grant, colorized

Many of these virtues are relevant to business, but evidently one needs something more to succeed. The profile of Icahn describes in detail how he tried to use his influence with the president and his position as a semi-official economic adviser for personal gain- to rescind a rule requiring oil refiners, one of which Icahn owns, to blend ethanol or else buy offsets on a special market. His refiner could not blend ethanol, so was subject to a quite volatile market in RIN offsets. While unsuccessful, the effort was flagrantly unethical and illustrated Ichan's intense greed, his great skill in manipulating others, and his consistent practice of skirting the law whenever possible and advantageous. What a contrast to Grant! And something of a contrast to our current president as well, who isn't smart enough to be in the same league, and looks up to Icahn as a hero who sits on a far larger pile of money.

There was a brief period in the mid-20th century when business leaders were thought of as civic leaders as well. After the period of the robber barrons and Gilded Age, when the business community had been chastened by the great depression and the spectre of communism, (not to mention bitter union fights), and when the whole country had been brought together by the world wars. There was an ethic of fair dealing and paternalism towards workers, and of viewing the corporation as a public, civic entity, not just there to make money, but to play a supporting role in the American way of life. Perhaps I am looking back with rose colored glasses. At any rate, that period, however amicable, is long over. The captains of our current corporate landscape, especially those in finance, are poor models of any kind of ethics; scofflaws who are fined repeatedly, even in our attenuated enforcement landscape, providing models of greed, entitlement, and callousness.

How anyone could imagine that today's celebrity business leaders would make proper and positive civic leaders, particularly someone as twisted as our current president, is unimaginable (Michael Bloomberg excepted, perhaps). So now we are in an insult contest with North Korea, (among others), at an abysmal level of rhetoric which expresses perfectly the level of intellect and ethics our leader is bringing to the table, but which should surprise no one watching his business career or those of his colleages in the contemporary business world.

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