I’m quite fascinated by this whole article about how Ayn Rand economics killed Sears. While reading I found out that Sear’s CEO, Eddie Lampert was a protege of Robert Rubin.
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.
Rubin’s focus is the same of Republicans these days who seek to implement austerity. As for Lampert his corporate raiding practices of the past remind me of Mitt Romney and Bain Capital.
Some refer to Lampert as a corporate raider. He prefers the term “active investor.” It must be admitted that Lampert wasn’t only interested in stripping the assets of his retail giant to make a fortune off it right away. He thought he could increase profits, too. After making a nice wad of cash from Kmart by selling off the valuable real estate sitting under dozens of stores, shutting down 600 stores and laying off tens of thousands of workers in the name of cost-cutting and thereby jacking up the stock price, he got bigger ideas. He would use Kmart to take over another ginormous retailer, Sears.
The only problem was the fact that you have to actually be able to run a business which he wasn’t capable of doing. He applied the Ayn Rand theory that self-interest would benefit the the entire whole. It turned out that after he broke Sears up into individual units they fought each other and hurt the Sears brand thus invalidating that theory.
In addition Lampert seems to be a pretty disgusting individual.
Sears became a miserable place to work, rife with infighting and screaming matches. Employees focused solely on making money in their own unit ceased to have any loyalty the company or stake in its survival. Eddie Lampert taunted employees by posting under a fake name on the company’s internal social network.
It’s a shame to see Sears headed for the dustbin of American department store history. I strongly suggest clicking over to the article on Salon to read this piece in its entirety to see how everything happened.