Phillip Adams |

November 18, 2008

THE pile of corporate corpses grows ever higher. First came those carnivores of cash: greedy buggers who choked on their meals of money. Now major manufacturers are in the morgue while others, on their death beds, are pleading for transfusions from the taxpayer. But only some are victims of the meltdown. Most committed suicide.

The Model-T put Ford on the map 100 years ago. While the sturdy vehicle was democratising motoring, Henry Ford's assembly line became the enabling technology for 20th-century capitalism. But between 1908 and 2008 a lot of things went terribly wrong. Ford celebrates its centenary on the brink of extinction.

Having killed off the electric car a few decades ago, General Motors unveiled a revived version a few weeks back. The plug-in Volt is intended to recharge the prospects of what was, for generations, the most powerful corporation in the world. GM has been getting the market so wrong for so long that, like Ford and Chrysler, it teeters on the edge of bankruptcy. When launching the Volt, the General's chief couldn't resist pooh-poohing all that left-wing nonsense about climate change. No wonder the same gentleman now begs for a bailout. He should have been thrown out years ago.

When crusading against the "unsafe at any speed" cars produced by Detroit in the 1960s, the young Ralph Nader found that GM was already a basket case. Trying to find who was responsible for the highly flammable Chevrolet Corsair, Nader interviewed executives up and down the management chart. "No one in the company would admit to knowing anything," he told me at the time. "You'd be sent to see someone else. The senior people blamed subordinates who, in turn, blamed their bosses. Nobody took responsibility for bad decisions." Twenty years later, GM and Detroit had given the car industry to Toyota.

If Chrysler is bailed out, it will be for the third time in recent history. Enjoying health care denied to tens of millions of poor Americans, it will be put on life support courtesy of the taxpayer. This follows years of palliative care, courtesy of Mercedes Benz. Finally the Germans pulled the plug.

Remember Pan American? Born in the '30s Pan-Am died in 1991. As American as Disneyland and apple pie, the world's mightiest airline suffered a perfect storm involving everything from rising fuel prices to hijacks and Lockerbie. I mention Pan-Am because of the fact Qantas only narrowly escaped the scrap yard. Had the board and outgoing management been permitted to surrender to hijackers who called themselves Airline Partners Australia, it would be in the same debt squeeze as the once-mighty Packer media empire.

Some corporations die from their failure to deal with new technologies, others from general incompetence. Then there are those that die of simple greed. Recent events have eclipsed the collapse of Enron.

Run by George W's good buddy Kenneth Lay (or "Kenny boy" as Bush lovingly called him), Enron wasn't just another house of cards, a term flogged to death in recent weeks. Enron was a Vegas-style card game run by card sharps whose cheating was facilitated by legions of lawyers, legislators and the almighty accounting firm Arthur Anderson.

It took one bright young woman from The Wall Street Journal to see through the scam that the business media had shamefully applauded. Holding California to ransom by manipulating their power grid to create shortages and blackouts, Enron sent the price of electricity through the ceiling. And Enron's shares soared to $100. When they fell - to 50c - they took the savings and pensions of millions with them. And the Bush administration responded with some piss-ant regulation that ensured it could happen again.

And let's not forget the dot-communists, as threatening to US security as any reds beneath the bed. Their dot-com bubble burst in 2001: an immense financial collapse aided and abetted by the same brand of bribed accountants and auditors, the same wilful blindness of the business media and, of course, the same sorts of lawyers and legislators.

Or the so-called savings and loans crisis that preceded it. In the '80s and '90s, no less than 747 savings and loans associations crashed. This jumbo-sized fiasco, driven by falling house prices, required a taxpayer bailout topping $2billion. Small change by today's standards, but unprecedented at the time. Both the present crisis and the policy response had their origins here. It seems little was learned.

Governments are replacing shareholders with taxpayers to prevent poorly run companies flatlining. Whether it's GM or Ford in Detroit or Australia, bailing out bad businesses seems bad public policy. Here the purists among the free marketeers make some sense. When companies drive themselves off the cliff, let the laws of Darwin prevail. The old joke of "privatise the profits, socialise the losses" just isn't funny any more.