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Ayn Rand killed Sears

How the me-first corporate structure installed by hedge fund manager Eddie Lampert helped ruin the retail giant BY LYNN STUART PARRAMORE

Eddie Lampert, the legendary hedge fund manager, was once hailed as the “Steve Jobs of the investment world” and the second coming of Warren Buffett. These days, he claims the number 2 spot on Forbes’ list of America’s worst CEOs. He has destroyed Sears, the iconic retail giant founded in 1886, which used to be known as the place “Where America Shops.”

America now avoids Sears at all costs, thanks largely to Mr. Lampert and his love of twisted economic logic.

A bit of background: Lampert cut his teeth on Wall Street at the risk-arbitrage desk of Goldman Sachs under Robert Rubin, who later became U.S. Treasury Secretary and now serves as vice chairman at Citigroup. In 1988, Lampert founded ESL Investments and joined the billionaire’s club at age 41. He rose to fame in the early 2000s for seizing control of Kmart during bankruptcy and then using it to take over Sears. Along the way he was kidnapped and deposited on a motel toilet in handcuffs for nearly 40 hours, and lived to tell the tale. Lampert is known for his touchiness and odd habits, such as conducting meetings from a bare bones room to Sears executives forced to tune in by videoconference. He hates flying.

You might say that Lampert is the distillation of the fervent market worship and wrong-headed economic approaches that came to dominate the U.S. in the 1980s and have yet to run their fatal course. He adores Ayn Rand, and is reported to have given out copies of Atlas Shrugged during an ESL annual dinner. Lampert is also a fan of Friedrich von Hayek, the Austrian economist beloved by conservatives and libertarians. As a Robert Rubin protégé, he absorbed the lessons of a man whose discredited economic focus on budget deficits ended up starving the country’s infrastructure, education and alternative energy.

Looking at what Lampert has done to Sears, we can see what happens when the lessons of his mentors are actually applied in the real world. It isn’t pretty.

by Anonymousreply 3808/04/2013

Even a blind monkey could have seen that Lampert was a buffoon before he was even hired. I blame the Sears board.

by Anonymousreply 107/22/2013

Like most sociopaths, Lambert is not good at management.

by Anonymousreply 207/22/2013

She was Satan, ayn rand will be the downfall of humanity

by Anonymousreply 307/22/2013

Fucking 1%

by Anonymousreply 407/22/2013

Hmm, well the labor unions killed the automakers and Detroit.

They also killed the education system.

And also the Postal Service.

Guess makes them mass murderers while Lambert just killed one.

by Anonymousreply 507/22/2013

Bullshit, r5. That's a bunch of talking points that are a massive lie.

by Anonymousreply 607/22/2013

I've read Atlas Shrugged. She apparently killed the written word too.

by Anonymousreply 707/22/2013

To pretend a "hedge fund manager" is a businessman is a joke. They are con artists and stock brokers and that's all.

by Anonymousreply 807/22/2013


by Anonymousreply 907/22/2013


by Anonymousreply 1007/22/2013

[quote]It turns out that contrary to Lampert’s notion, you actually do need to know something about a business in order to manage it well. There’s really no substitute for industry-specific experience.

Not that I agree with Randian philosophy in the slightest, but this statement is demonstrably untrue. To use but one industry example: the current CEO of General Motors spent his entire career before joining GM working in the telecom industry. The current CEO of Ford similarly spent his entire career in another industry entirely, in his case aviation (at Boeing). And so forth.

Also, the history of modern corporate America is rife with stories of horribly conceived mergers. Kmart-Sears pales in comparison to, say, the AOL-Time Warner merger during the Web 1.0 boom. After the merger its stock dropped over 90% in value before Time Warner finally severed off AOL, and in 2002 the company lost nearly $100 billion - still a record annual loss for *any* company.

by Anonymousreply 1107/22/2013

Stupid people who read her, are the downfall of humanity.

I hope she died in a really painful way.

by Anonymousreply 1207/22/2013

Ayn Rand accepted Social Security and Medicare.

She was a lying, bitch.

by Anonymousreply 1307/22/2013

[quote]Ayn Rand accepted Social Security and Medicare.

Social Security and Medicare are our BIRTHRIGHT! It's not anything at all like WELFARE!!!!!

by Anonymousreply 1407/22/2013

Based on R13's logic, the high income Democrats who favor higher income tax rates (such as Pelosi, Kerry, etc.) should voluntarily pay at those higher rates.

by Anonymousreply 1507/22/2013

I worked for a company whose dumbass CEO believed in bringing the virtues of competition within the company. The result was a maelstrom of fraud and deceit, and intercompany accounts so badly out of balance that management could not tell on any level how divisions were doing. And all that was a decade before Lampert got his chance to make the same errors again. These idiots don't understand why there are FIRMS, and the corporations exist because free markets never made any society RICH. No, not a single one.

by Anonymousreply 1607/22/2013

What color is the sky on your planet, R5? Because your kneejerk wingnut assertions about labor unions have no basis in reality.

by Anonymousreply 1707/22/2013

R17, I'm not R5, but the rigidity of labor unions in refusing to accept much in the way of concessions is indeed a major reason why the "old GM" failed. By 2007, GM had monthly retiree health care costs -- and these were for the infamous "Cadillac plans" mandated by the unions -- of $5 *billion* a year. That quite literally helped bankrupt the company, along with uncompetitive wages elevated to insanely high levels (e.g. blue-collar factory workers easily making six figures once overtime was factored in). The "new GM" got rid of this bullshit, dumped all the "Cadillac" benefits the AFL-CIO had won over the years, and started paying its blue-collar employees wages more in line with what they realistically should have been in the first place.

Unions also played a significant role in the destruction of the American manufactured-goods industry. Why on earth should, say, Levi Strauss pay American workers $40/hr under its union contract when it can relocate to Mexico (where there are no trade tariffs) and hire workers for a fraction of the cost? This is precisely why Levi's jeans, one of the most quintessentially "American" consumer goods of all time, are no longer actually *made* in America.

by Anonymousreply 1807/22/2013

[quote]Why on earth should, say, Levi Strauss pay American workers $40/hr under its union contract when it can relocate to Mexico (where there are no trade tariffs) and hire workers for a fraction of the cost?

Why indeed, R18? How about YOU move to Mexico and start enjoying some of those great economic benefits?

You are an imbecile.

by Anonymousreply 1907/22/2013

ha ha ha

by Anonymousreply 2007/23/2013

False history R17. First of all $5 billion a year in pensions (on $178 billion sales) did not bankrupt GM. What did bankrupt GM were that its vehicles sold at a $2,500 discount compared to say, Toyota's comparable models.

by Anonymousreply 2107/23/2013

R11, granted what you say is true, but Boeing to Ford is at least apples to oranges rather than apples to suitcases. It is more than likely that these men actually did some research into the companies, their products,and their customer base before making sweeping decisions.

Unfortunately, most of these CEOs reduce everything to the lowest common denominator so they don't need to learn a new vocabulary.

One of my favorite stories of corporate stupidity was when Kmart came to Manhattan. The absolutely refuse to adapt to the new market; so, the store actually sold lawn mowers. Just what every Manhattan apartment dweller needs. Also, Kmart insisted on using the same signage that was used in the suburbs. It was too large to be seen properly from the street, and was an annoyance to the apartments across the street.

by Anonymousreply 2207/23/2013


Hannity and Fox News like to call out rich people as hypocrites, like Warren Buffet, when they ask for higher tax rates to fund national projects: "Why don't they give up their money voluntarily if they want higher taxes," they ask. "Hypocrites!"

You can't fund a modern state with voluntary donations. Shaming rich people into giving up what they got won't work either. The issue is not that some people won't give on their own, they would be fools to do that. Taxes have to be compulsory  to work.

As it is now, the one percent dodge taxes, and we pay more than we should. That isn't fare and if taxes don't seem fare, a society won't support the tax programs.

The rich especially don't want to pay for services they don't need, like public education and the postal service, services that we have to have, so they have the politicians they own starve them. They pay millions for a media blitz to sell the song and dance that they don't work. Then tell us it is all our fault because our workers ran them into the ground.

R17: If we had socialized medicine and publically funded and insured pension plans that would cover old age expenses, programs that unions have supported for years, then the car manufacturers would not have have been on the hook for those expenses. Other countries with strong unions do this. Their companies do just fine.

On the one hand the rich work together to make sure health care and pensions remain private so they can play their investment games with our money, with the predictable result that our pensions disappear and our health care costs skyrocket while they roll in obscene piles of money..

If the government is not going to tax the rich to provide pensions and health care for us, if instead they are going to let the rich gamble with our financial security, why are we not allowed to cooperate in unions to get the best deals possible?

You can bet your ass the other side is cooperating -- look at the Chamber of Commerce's influence in Washington. You can do it and we can't? It is our health care and pensions that are at stake, not yours.

In any case, those benefits the workers won were done through arms-length negotiations. If you don't like the results, blame the CEOs. They have a lot more money and political power than we do.

by Anonymousreply 2307/23/2013

The GM statement is pure tea party assholery.

In Japan, universal healthcare means that the auto companies do not have to pass on the cost of employee healthcare to purchasers. Why every large company in America is not screaming for single payer I'll never understand.

by Anonymousreply 2407/23/2013

Same here, r24. Not only would they free up their own money, the average American consumer would have more money to spend on stuff.

by Anonymousreply 2507/23/2013

Japan has its own pension problem. And they retire earlier.

by Anonymousreply 2607/23/2013

"Pensions? Health plans? Vacations? Why should we pay people not to work?!"

Capitalism, unbridled.

by Anonymousreply 2707/23/2013

Toyota doesn't pay its US workers a pension, but it certainly does pay its Japanese workers pensions.

by Anonymousreply 2807/23/2013

I am old enough to remember when the capitalists told us we would all have to make sacrifices (not them of course, just us) but in the long run if we gave up wages, benefits, and working conditions, then business would expand, and working people would see the benefits.

That was in the recession of 1980. From the start, militant union leaders did everything they could to tell their members they were being sold a load of goods. Didn't matter, the assault was on. PATCO was busted, Reagan's first act in office.

First the capitalists explained that we had to give back to keep companies from going bankrupt.

Then we had to give back because the companies were not profitable -- enough. As though there is such a think as "profit enough" to Wall Street and the banks.

Then we had to give back even more because the companies were making a ton of profist, but they could make even more obscene profits by taking the work overseas and hiring people at a dime on the dollar.

We couldn't let US companies do that? Right? That wouldn't be the patriotic thing to do. We should make more sacrifices or our jobs will go overseas.

So we gave and we gave. Then what happened? They sent our jobs overseas anyway. To make sure they got their way they hired the Democratic Party and Clinton to jam through NAFTA so the bosses could take their factories and get their labor supply wherever they could get what they needed the cheapest.

That's at the international level -- the race to the bottom. Over here, for what few jobs remain, the right to work for less laws force states to fight each other to provide the lowest corporate taxes, the worst safety inspections and screw labor as much as possible to get jobs away from a neighboring state.

"I will walk the picket line with you." says Obama, except when there is a real picket line in Wisconsin, "Oops, sorry, got important meetings with Goldman Sachs."

Now they make no bones about They tell us straight out that they aren't ever going to give anything back, that they would make sure we never had unions again, or decent wages, or pensions plans.

We should accept 10 percent unemployment as the new normal. We can never expect free college, or safe retirements or socialized medicine. Now the Democrats(!) want to slash away at the Party's chief accomplishment in the social welfare state, what's left of it -- Social Security.

They gave up all pretense and settled on stealing us blind with no excuses.

Now they have us believing that we have done this to ourselves. It is our fault.

I didn't realize that my homeroom teacher and my neighbor the sanitation worker ruined the economy.

by Anonymousreply 2907/23/2013

great post r29

by Anonymousreply 3007/23/2013

Thank you, R29. It is beyond depressing to see we lower and middle class people turning on each other. I'm in a union so right now (knock on wood) I still have a pension (rather, I am paying into a pension but I am 29 years from retirement!) and my health insurance isn't outrageous (yes, I do have to pay for part of my premium).

I think that's fair. I think what's unfair is that those in private sector don't have similar benefits.

by Anonymousreply 3107/23/2013

R31, I'm in the private sector, and my company pays my rent, insurance and ensures that I don't pay state taxes.

by Anonymousreply 3207/23/2013


Your point is?

by Anonymousreply 3307/24/2013

Apparently Lam spent a lot of time harrassing Sears employees on their internal network, Pebble:

by Anonymousreply 3407/24/2013

apparently, r32's point is that only the little people pay taxes.

by Anonymousreply 3507/24/2013

So typical of the kind of shit CEOs really do with their time R34.

by Anonymousreply 3607/25/2013

Corporations were invented to correct problems with markets, so any idiot who thinks the corporation can be "improved" by making it into an internal market has the brains of a gnat.

by Anonymousreply 3707/25/2013

clearly i'm a glutton because i suffered through fountainhead AND atlas shrugged. . .time i will never get back :( if i wanted to read utter nonsense tht wasn't in the least relevant to my quotidian life i would've just reached over and got the bible i read when i was a teen. . .

by Anonymousreply 3808/04/2013
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