The Problem is About Bigness Itself–Threatened by Dinosaurs

I do leadership consulting for a living. I am fortunate to work with enlightened large companies helping to revolutionize their leadership training to a 21st century model where value is created by creating a sustainable future. What I’ve witnessed in the past 3 years is nothing short of astonishing. While big companies are far from perfect they are making rapid and amazing progress at inventing new products and services that are healthier, sustainable and benefit humanity. But this is far from the norm. There are many, many leaders that pathetically don’t get it. Their self-interest and wholly materialistic view of enterprise is the only Kool-Aid they drink. Increasingly they are desperate to survive, and they have become gigantic parasites sucking the life-blood of our economy and our future.

We used to think that business and government operated with a healthy tension that led to both a vibrant economy and a constrained government, but that is now a sad illusion. Now they simply feed on each other in a new kind of “state capitalism.” Please, please know that this is both an impulse of Republicans and Democrats. We know that by looking at what people do rather than what they say.

According to the Economist, the biggest expansion in the American state since the 1960’s was driven by none other than George Bush. As a give-away to drug companies he expanded a huge drug entitlement program of Medicare at retail prices. He also created the biggest new bureaucracy since World War II called the Department of Homeland Security. He also greatly expanded no-bid contracts to defense and other government contractors. 7000 new pages of government regulations were installed and wiretaps and financial data mining of our bank accounts became government-as-usual.

Since the financial meltdown taxpayers have had to bailout our big financial institutions and auto companies while no one pays any consequences.

Meanwhile both Democrats and Republicans are locked in an ideological cage fight played out in our hyperactive media while our nation convulses in dry-heaves of meaningless sound bites. If children are to thrive we need something more.

But that will be difficult. The marriage between big governments and big business is even greater in other big economies like China and Russia whose governments routinely “buy” private companies, decide who gets capital and who is pushed aside. (Most of these nations’ global companies are in fact owned by their governments!)

Meanwhile, a Saudi Prince (remember the Saudi Arabian government owns all the Saudi oil reserves) is the second largest stockholder in News Corp., which owns Fox “news” and the Wall Street Journal (see Fortune). He is also the largest stockholder in Citigroup, one of our too big failed banks. If you wonder whether this foreign quasi-state investor has much influence at News Corp. or Citicorp, Vikram Pandit, CEO of Citigroup, remarked that Prince Alwaleed’s view of his performance would determine whether he keeps his job! Prince Alwaleed announced he is opposed to new taxes on big banks to recoup U.S. taxpayer support. Big surprise. Isn’t it interesting that a foreign Prince has that kind of influence over the leadership of one of our largest failed banks? More influence than the taxpayers who kept Citicorp afloat.

This is just a symptom of the twisted new world of State Capitalism where the financial power brokers of Wall Street have moved from New York to K Street in Washington D.C.

Now we’re in a brave new world, sanctioned by our Supreme Court that opens the door to global corporations supporting their favorite U.S. political candidates. Welcome to bizarroworld where free speech has become bought and paid for speech by global corporations who claim to have the same rights as individual citizens. How do you like that Thomas Jefferson!

It’s long been observed that when companies are growing, brimming with innovation and new products they spend little on lobbying. However when big corporations grow dull and profits are shrinking they “invest” millions in Washington to impact laws and regulations to tilt the playing field, restrain competition, gut anti-trust laws and create special tax breaks. They simultaneously tout free markets while they work like demons to rig things for personal benefit.

So the problem we face is not only about big government; it’s about bigness itself. Dinosaurs were huge. Their inability to adapt caused them to go extinct. Now we have the dinosaurs of big government and big business mating creating offspring that is simply devouring all the assets and resources of generations of work.

What is the best we can do? State Capitalism is the global rage. It reigns almost everywhere from Japan, China, Malaysia, the Middle East, Western Europe and of course our own bloated version of it. Its failures will be painful and drawn out. The most important issues are personal ones that impact you and your loved ones. My view is don’t expect the system to change soon. There is too much juice in it to voluntarily reform itself. It’s time to live prudently, become multi-skilled in work that ignites our passions and focus on all the things we do control. There will be great churn in the economy and great opportunities to out-run the dinosaurs. It’s a day of constant innovation and, if viewed correctly, unprecedented opportunity. There are still great companies to work for that are innovative, treat their employees well and are thriving even now (Fortune Magazine’s 100 Best Companies to Work For). Remember, it’s our day-to-day life that matters, and in every epoch there are those that adapt, thrive and pursue their dreams. Be one of those. Life is risky. Take charge.