Brad DeLong's Semi-Daily Journal
The hollowing out of corporate America has been going on for some time now. The hollywoodization of salaries in the Reagan era attracted the worst and the greediest to the corporate suites, and encouraged them to strip out the flesh of corporate staffs. The deep bench -- called organizational slack by sociologists -- which provided the resilient strength of American business was sacrificed long ago to pay multi-million compensation to ruthless bastards enjoying short, but lucrative tenure at the top.
The advent of the Bush administration was the signal to the Enrons and WorldComs that they could get away with much worse. But, that signal was given out to many companies, which did not cross the line into actual illegality, but nevertheless weakenened their franchises to pay ransom to their masters.
Collapse -- not mere scandal -- may provide Act 2, in a drama illustrating the unwisdom of Bush and the greedy class he represents.
The risk that General Motors, once the largest and one of the most profitable corporations in America, might actually liquidate, looms on the horizon.
Part of the Coming of the Perfect Storm