CEOs like the late Jack Welch embodied its endless possibilities.

Reprinted from Forbes

When he was CEO of Coca-Cola, the late Roberto Goizueta focused on enriching his shareholders. There was no mention of the Coke community’s efforts, or job creation, of “stakeholder capitalism.” Goizueta spent his days working diligently for those who pointed their savings to Coke and were criticized for doing just that. Concentrating on profit on people was supposedly heartless …

In fact, thank God for Roberto Goijueta. During his tenure as chief executive from 1981 to 1997, Coca-Cola’s value increased from 4 billion $ 145 billion. And in the process, Atlanta (where Coke is headquartered) was transformed. Thanks to the huge leap in benevolence of the heirs of Robert Woodruff (Coca-Cola president from 1923-1985), and those who saw their Coke share price rise during Goijueta, Woodruff has joined them as CEO. Goizueta is apparently seen walking through Emery University where you thank a university for one of the largest endowments of the university for the large exposure to Coke shares, which later funded all kinds of scholarships for Emery students. And then there’s the story of a pediatrician named Bill Warren. Warren was gifted shares of Coke at an early age, only to see their value rise sharply in the 1980s and 90s. The latter gave him financial freedom to quit his medical practice, only to spend his time helping the inner-city Atlanta family in their medical struggle.

Goizueta’s remarkable achievements come to mind while reading New York Times Columnist David Gales’s recent attack on the late Jack Welch. The goal is to promote the title of his new book The Man Who Broke Capitalism, All Giles really signals to potential buyers that they will read less than they have read before. And it taught them very little when they first read about the alleged horrors of the heads of for-profit companies. The same critique of the obsessive profit focus, different CEOs.

In treats and easy-to-imitate fashion, Giles writes about how Welch’s career was “defined by his dedication to maximizing short-term profits at any cost.” Where have we heard that one before? If you are looking for originality, this is the wrong book.

After that, Giles opposes himself. In fact, admitting that the value of GE increased from $ 14 billion to $ 600 billion during Welch’s tenure as CEO, Geles unknowingly revealed exactly how The look of the future Welch was in charge of the company. As any investor could explain to Geles, the popular notion of “quarterly capitalism” where profits are maximized without long-term consideration is not a way for shareholders to appreciate. This is because stock prices are an estimate of how many dollars a company will earn in the future. As they are, the steps taken for short-term gains in long-term health costs are logically met with reduced assessments.

If anyone doubts this, all they have to do is consider Amazon. Giles may be too young to remember his early days as a public company, but a popular joke was that Amazon was “” Take it? Aside from its long extended period without profit, Amazon’s shares provide investors with confidence that Jeff Bezos is setting the company up for strong earnings in the future. Shares of GE did so well while Welch was in control that there was evidence from real skin owners in the game that Welch focused his eyes very profitably on tomorrow.

Instead of acknowledging this fact, Giles returns to the absurdity with which he is most familiar. He claims that Welch’s focus on shareholders has “done more harm than good” to him, accelerating the growth of GE through a relentless consolidation and acquisition that has taken GE from its industrial roots and created a wave of corporate consolidation in the industry. Competition will decrease. Diversified like airlines and media. ” The book could be written, but with a little bit of recollection it would be said that in GE modernization, Welch saved it. Really, which business has ever thrived by embracing stagnation? In the face of diminished competition, when Welch took over GE, there were far fewer Americans on board than ever before, and television was largely confined to three networks. Fast forward to the present and flying anywhere is a cheap norm, also it is not unrealistic that “television” typewriters and Pephone will go the way of such diverse media ideas always, everywhere and always competing for the apple of our eye devices are not sitting in our family home .

Never bothered by the thought that other ankle-biting business journalists have written thousands of times before, Giles regrets Welch’s “slanting priority” which, among other things, has led to “fixed wages” and “factory closures” across the United States. That Welch created a low-wage, factory-closing trend among Copicat CEOs, but what does he mean? If we ignore the fact that GE’s reputation under Welch was “Generic Electric”, we cannot ignore the fact that for any business in the world, ambitious people always and everywhere aim to gain market share in the United States. Think about this fact. If the world really and truly fights to meet the needs of the American people, can what Gellus has written about “fixed wages” across the United States since Welch took over the GE come true?

One hundred years ago, New York City was the largest manufacturing facility in the United States, as “factory closed.” It’s not today. Fineness is certainly lost in prison, but what destroys cities, states and countries is not to close a factory, but to cling to them. New York City is improving right now because it has left the past behind. This is what attracts talent. “Factory closures” did not overtake U.S. cities, but the departure of talented human capital in search of better job opportunities There is. Giles will tremble, but he is channeling Donald Trump by lamenting “factory closure.”

Gales embraces Trump again, criticizing the Welch disciples and embracing their “outsourcing” and ignoring the fact that his own New York Times Fortunately it does this by outsourcing its newspaper prints to countless plants around the United States. This is a great newsletter and outsourcing means more and more of us can read real products every day. The work is called split Progress. Jobs are not limited to prison imagery. They are a result of investment, and follow investment productivity.

Gelles added that most of Welch’s followers once “failed” in the CEO position, only to miss the point presumably for him. Of course most of them have failed. They explain that Welch’s huge salary and Goizueta, Steve Jobs and countless other salaries. If anyone can shine in the CEO seat, it will be reflected in the reduced compensation.

At the same time, Welch’s spectacular tenure as CEO has redefined for investors how much CEOs can achieve. As a result, the search for the next Welch took flight naturally. This explains why so many “failed” CEOs are well compensated today. To make things easier for the jail, quarterbacks are paid a lot, though mostly bust. Those who have the mere possibility of transforming a business or team will enjoy a large line of suitors.

In writing Welch’s critique, Giles forgot about basic economics. Or it was found near learning. But what she should be most ashamed of is that she is Clear.

John Tamney


John Tamney, Research Fellow of AIER, Editor of RealClearMarkets.

His book on current ideological trends is: They are both wrong (AIER, 2019).

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