Sometimes, you can't lose the "we"

by Russ Roberts on May 21, 2009

in Frenetic Fiddling

I'm flying on Virgin America where I can watch TV and blog at the same time.

Just saw a Saturn ad that said something like this:

"If you buy a Saturn and lose your job, we'll make your payments for nine months."

Wonder what they mean by "we."

Sometimes, you can't lose the "we."

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{ 10 comments }

Adam May 21, 2009 at 7:01 pm

Wonder what they mean by "you're job."

Steve Plunk May 21, 2009 at 7:20 pm

The "we" is Saturn. This is a simple insurance policy. Rather than offer a rebate or bigger rebate they toss the money into a fund (theoretical) to cover the payments of those who lose their jobs. It provides a sense of security to a buying public that is lacking security.

Isn't half the battle about consumer and business confidence now?

Russ Roberts May 21, 2009 at 7:21 pm

Adam,

Thanks. I'll fix it.

Luis May 21, 2009 at 7:27 pm

I guess that 'we' is just the company. In New Zealand we have the same type of ads for other car brands (I think it was Hyundai) and no government backing for the insurance.

Russ Wood May 21, 2009 at 8:17 pm

Russ,
Nice example. Because this is Saturn, a GM company funded with taxpayer dollars, the "we" is the remaining few of us who pay income taxes. Ford has a similar program, and for them the "we" is, thankfully, just Ford.

T L Holaday May 21, 2009 at 10:14 pm

Talk to Vice President Cheney; he knows how to make someone lose his wee.

PC May 22, 2009 at 3:24 pm

I am very sympathetic to the argument that one should "lose the we". However, I find it ironic that Masonomics is headquartered at a state university significantly funded by the "we".

And I find it personally troublesome that many who are Masonomists (at a state university) are quick to label people like me (a corporate exectutive) "rent seekers".

Perhaps we are both simply dealing with the world as we find it, not as we wish it were. If you want an academic career, you narrow your options significantly if you eschew public colleges. If you work for a corporation, you need to deal with Washington or you will get buried.

A final question I have struggled with – as a corporate executive, do I perhaps have a fiduciary responsibility to "rent seek" if that option is available and favorable to my shareholders?

Kevin May 22, 2009 at 5:38 pm

PC you do have an obligation to seek rents. Your responsibility is to your employer's owners, not to the people who fund rents created by statesmen, even if those populations overlap. Having said that, there may be a little less liability for breaching fiduciary duty in these cases because the same people who provide the rents would have to enforce an action against you for failing to claim them. If I were you, I'd seek me some rents.

BoscoH May 22, 2009 at 6:38 pm

PC, while you're trying to make the case for hypocrisy, your argument is essentially the same as saying that since I attended public schools, I owe the country 2 years of service and I should be a teacher at a publicly funded school, not privately employed writing software for them.

GMU Econ specializes and makes itself valuable by taking the Masonist view. Just as GM specializes and makes itself valuable by… ok, I won't go there. And I love my 2002 Blazer but not enough to spend $40K on a Volt next year. At any rate, GMU Econ probably wouldn't give the state the ROI it does if it were run by bootlicking statists. It would be just like hundreds of other econ departments across the land, not doing anything particularly interesting research -wise, and making sure hundreds of students would be well-trained in butchering calculus for the MBA program they attend. Think of that scenario like if GM made Camries.

Seriously though… If you're an exec at GM, you're in a tough spot. I really feel for you. The government will ruin your company. But it looks as if overextension, union contracts, and ridiculous benefits have already done that. Do your best and don't take it personally. At the rate Obama is shuffling the leadership crew, if you hang in there for a few years, you might have a stint as CEO.

Really seriously… Back in the mid 90s, Microsoft didn't pay much attention to Washington. And at the time, they were the greatest money making machine in the history of the world. This was before Internet bubbles and with negligible state intervention. Their biggest market enemy was piracy, arguably a complete lack of property rights enforcement by the state. They had one part time lobbyist in Washington. And for not paying attention to the whores in DC, they got dragged through the ringer. To me, that is sad, and I'm a Mac guy. In the same way, it's sad to see GM bend over with its hand out now.

Ray Gardner May 28, 2009 at 1:41 am

I'm suspicious of PC's executive status, but the question is still valid.

A person in the position to make decisions such as to rent seek or not is ethically bound to do what is best for the company.

Some might argue that – let's say a retail chain – should take advantage of what rent-seeking opportunities there are, but in the long run, such practices could simply gloss over inefficiencies at the store/plant level and eventually be their downfall.

Think of the American auto industry and their ability to utilize their economies of scale whereas the Japanese had no such options.

Looking at the details of how Toyota has made their gains, we find that quality problems were not capable of being hidden deep within the system whereas Detroit's problems were buried until it was too late.

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