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The New Ruling Class

I think people are getting more and more sick of the incompetence and immorality of the ruling class here in New Zealand. And yes, I used the word “class” deliberately because it really has got to the point where there is a certain group of people who rule by a sense of entitlement rather than any proven competence.

Every week there seems to be a new story describing the ineptitude of another highly paid director or other leader. The latest is Solid Energy ex-CEO, Don Elder, but he is just one of many.

Don Elder was probably quite a smart person at one time. He went to the prestigious high school Christ’s College, graduated from the University of Canterbury with a degree in engineering, and then gained a Rhodes Scholarship to go to Oxford University. Who knows, maybe he’s still a really smart person but I think something has gone horribly wrong and I think I could make a good guess about what it is.

It’s that senior managers acquire a false sense of their own importance, competence, and uniqueness. They really think that they deserve the vast salaries they are given. They really think their decisions are better than those of mere mortals. And they really think they are making the “hard decisions” which no one else understands.

There are probably a few exceptions to the picture of hopelessness I have presented so far – after all, the people running companies or other organisations reasonably well usually keep out of the news so we don’t hear much about them – but the model seems to fit the vast majority of the ruling class I have heard of.

The process through which this false sense of their own skills and value is acquired is obvious. Who do these people associate with? The board of directors, other managers, senior government ministers, and other people of the same class as them. In other words, other immoral, useless parasites who aren’t going to risk sabotaging the system by suggesting it has significant faults.

I can imagine them congratulating each other on a job well done and giving each other huge bonuses at the same time as their company sinks into financial disaster or compensates for its inefficiencies by ramping up prices for its captive customers.

Don Elder has driven the company into the ground at the same time as he made investments which anyone could see were bad, built a luxurious corporate headquarters (known locally as the “Palace”), bought a mine for $64 million and closed it a month later, invested in a failed biodiesel project, and thought that he and his high class buddies were doing such a good job that they deserved $23 million in bonuses. What a guy! Now isn’t that the sort of performance well worth paying over a million dollars a year for!

And now he’s at home being paid full pay as an adviser and to help with the transition to new management, and still he refuses to be accountable. His phone diverts saying he’s out of town. Is he hiding somewhere like a coward or maybe he’s enjoying an overseas holiday at our expense.

Let’s get some of the defences proffered for Elder out of the way here. First, the coal industry is in decline so losses are inevitable. OK, maybe they are, but why make matters worse with foolish investments and undeserved bonuses? Second, it’s a hard job, could you do it? Well yes, I think I could, because I would have enough expert advisers to allow me to make a sensible and moral decision. Third, maybe what look like bad decisions would work in the long term. Yeah maybe, but it seems unlikely, and if he really thought that why not make an appearance and tell us all how that could happen.

There’s another point I should deal with too. That is the Solid Energy is a state-owned company. Some free-market zealots (not mentioning anyone… yes I am, Steven Joyce) have claimed a similar problem could never happen to a fully commercial company. Interesting theory but the constant failures of a very similar type in public companies tends to counter that assertion. In fact it was by playing the same games that fully commercial companies like to play that lead Solid Energy down this dismal path in the first place!

OK, that’s one member of the new aristocracy dealt with, now who else deserves an honourable mention in this role of the most esteemed members of the upper echelons in modern society?

Could it be another member of the privileged class who is perhaps even more despised than Elder, our old friend Jenny Shipley? She has just resigned from one company she was a director of which failed, resulting in the loss of many jobs. She did have more luck with Genesis Energy though. But to overcome the gross incompetence of its management it was necessary to push the prices up for its victims, whoops, I mean customers.

Yes, Jenny is proud of the profits at Genesis Energy, but the fact that these are gained at the expense of the people of New Zealand wouldn’t even be of the slightest concern to her. Those people are from the lower classes after all, so who cares? So let’s put the prices up in January this year and then again in a few months time. Oh and I think the directors deserve a bonus for their good work on that too! Would $30,000 be OK?

Well just pushing up prices to consumers isn’t the sort of brilliant work we should be paying these scumbags big money for. The price increases are totally unjustified despite the lies about increased distribution costs and other excuses. I could choose a homeless bum off the street, pay him with a bottle of vodka a day, and let him come up with the idea that you can make more money if you just charge your customers more.

Who knows, he might even come up with a genuinely new idea instead of the stale and mindless rubbish the privileged classes just recycle over and over again. Anything would be better than what we have now.

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