What genius chose Dominic Barton as head soothsayer on Justin Trudeau’s council of economic advisers?
The Liberal baublehead, who ran his campaign on a lollipop-unicorn rebuild of the middle class, now leans on the advice of Barton and his McKinsey & Co., the UK-based reptiles specializing in free-market globalization – aka the same brainiacs whose ideas have so gutted the middle class (and the slow learners still toiling to join it.)
McKinsey has been around for decades. Investigative hack Duff McDonald, in his 2013 doorstopper The Firm, described the consulting snakepit as pioneers in driving up CEO pay and laying off employees in good times in order to juice profits. “The single greatest legitimizer of mass layoffs in history,” McDonald wrote of McKinsey.
McKinsey’s triumphs over the years include:
– The first too-big-to-fail bank failure in the 1980s (Continental Illinois Bank);
– Advising AT&T to stay out of the cellphone market because it would be 900,000 customers max (Current market is over 100 million);
– Drafting a bril’ plan that actually made it harder for General Motors to compete with Japanese imports in the 1980s;
– Advising Apple – when, er, John Sculley was in charge (it was six weeks from bankruptcy by the time Steve Jobs returned);
– Pushing for Time Warner’s historically shit-tastic merger with AOL, which took the two companies from a valuation of $350-billion to $50-billion;
– Ably guiding General Electric to a $1-billion loss in 2007;
– Arguing New York should follow London’s lead and aggressively pursue derivative underwriting (before derivatives helped FUBAR the global economy);
– Persuading insurer Allstate to reduce legitimate claims payouts;
– Brilliantly strategizing Swissair to bankruptcy;
– Advising British railway company Railtrack to reduce spending on infrastructure — leading to a number of fatal accidents, and the company’s eventual collapse;
Notable McKinsey alumni include Enron’s former CEO, Jeff Skilling – currently serving a 24-year sentence for his role in the collapse of the energy giant.
Enron fell apart, McDonald writes in The Firm, thanks to imported McKinsey practices “emphasizing vision over execution … ruthless HR policy with excessive employee churn [and] off-balance-sheet financing and securitization.”
Raj Gupta, who had been managing partner of McKinsey for nine years and sat on the boards of Goldman Sachs and Procter and Gamble, was found guilty of insider trading, involving another McKinsey director, Anil Kumar.
The aforementioned M. Barton was brought in to clean up that mess, and by all accounts was a success.
In a 2011 article for the Harvard Business Review, Barton wrote that “Business leaders face a choice: They can reform the system, or watch as the government exerts control.”
Alternately, you can reform the system by, er, exerting control over the government, and the Liberals have been only too happy to hand him the wheel.
His bril’ pitches to Finance Minister Bill Morneau, Trade Minister Chrystia “Britney” Freeland, and the rest of Trudeau’s economic advisory quango, include that $135-billion-plus “infrastructure bank,” which will use public seed money matched by private international investment.
No one seems to understand how this bank will work, even after Trudeau spent a day curtsying to global investment leviathan Blackrock ($15 trillion in assets under management, and still hungry).
So opinions naturally vary on how we’ll get totally fucked on this. While the Financial Post’s Terence “Corky” Corcoran predictably denounces the scheme as a Stalinist plot, others suspect the deal’s another cash vache for the dreaded 1% at the expense of Canada’s 99.
Could be. Canada can sell bonds to finance infrastructure at 0.7%. Private investors may expect returns of 7%-9% from the infrastructure bank, and those returns need to come from somewhere – extortionate rents, tolls and fees being the most obvious source.
Trudeau & Co. may still be basking in the rosy glow of The Economist’s latest cover-story-cum-tongue-bath on Canada, in which Freeland gushed that “Our 1% get it.”
Indeed, they seem poised to get it all.
The real import of The Economist’s message that Canada is the last still-functioning liberal bastion on earth hasn’t sunk in: “You’re next.”