"GE used to feature on university courses as a model of probity," The Economist noted. "These days, it crops up in the seminars about earnings-manipulation."
"Earnings manipulation." Or, as its also known, "cooking the numbers."
School For Scandal
Did you know that there's something called the "Jack Welch Management Institute"? Perhaps unsurprisingly, it's attached to a for-profit "university," one of those scandal-plagued and overpriced degree mills that bilk the student loan system, have half the graduation rate of legitimate colleges, and wind up stripping students of both their money and their dreams.
Welch has no compunction about lending his name to a "university" whose President, as USNews notes, "is paid $41.9 million a year, 26 times the highest paid presidents of America's finest colleges and universities."
But then, if you thought that might trouble his conscience, you don't know Jack.
The "Jack Welch Management Institute" even offers a course in "Managerial Economics." Managerial economics? From the guy who can't read a jobs report without seeing little green men in the margins? What's on the required reading list -- alchemists' potions? Dan Brown novels?
"Tap into the CEO mindset," says the caption beneath Welch's picture on the school's website. To use an old Woody Allen line: No thanks, I'm due back on planet Earth.
The chortling, chuckling Welch on display with Chris Matthews is clearly satisfied with the work of his lifetime. No remorse, no regrets. People can draw their own conclusions about that.
Whenever I write about people like Jack Welch I'm asked if I hate them. Hey, I've spent very enjoyable evenings with guys like Jack Welch. (Not that it's likely to happen with Welch, especially after this.) I don't hate them at all. I just see them.
The behavior of our top executives is entirely predictable and, in its own amoral way, even reasonable. They are who they are. They're a lot like football players: We select them for aggression, reward them handsomely for it, and then act surprised when they behave aggressively.
What's truly irrational is society's behavior, not theirs. We elevate these executives into figures to be admired and emulated, as if bank balances alone conferred wisdom or morality on their possessors. We're the misguided ones, for treating them like sages. Sure, there are exceptions, but the typical high-powered executive isn't likely to be a wise elder -- especially about economic policy, which is a reflection of our national values.
When a CEO holds himself out as an economics expert, he's saying the two fields of expertise are interchangeable. So why not suggest he hire an economist to run his corporation? Krugman may be interested.
We should see executives like Jack Welch for what they are: often talented but self-interested competitors whose behavior must be regulated, and whose incentives must not be designed to encourage illegal, immoral, or socially destructive acts.
Besides, let's face it: Like their sports-playing compatriots and a lot of other people, they get a little unhinged sometimes. Take Jack Welch: He's made his peers look like goggle-eyed members of a flying saucer club who've just seen Venus in the night sky and think the mothership is approaching.