Working versus Whining

By Dan Ferris
April 20, 2006

The man who sells more cars than anyone in the world says the gasoline tax ought to be $1 per gallon higher.
I’m not kidding.

The man’s name is Michael Jackson, CEO of AutoNation. AutoNation sold 5 million cars last year. That’s about 30% of the entire U.S. auto market. Jackson made his comments in an interview that appeared in Monday’s Wall Street Journal.

Jackson justified his suggestion to destroy more wealth at the gas pump by espousing the viewpoint held by the last five U.S. Presidents, that, “America’s dependence on foreign oil is an issue of national security.” Says Jackson, “People say let the market forces do it, but the market forces haven’t done it.”

It’s not clear what Jackson thinks market forces should have done by now. Market forces tend to keep markets open, not close them down. Keeping markets open tends to keep the peace, not engender hostility or create “national security issues.” Jackson never mentioned that our “dependence” on foreign oil imports creates an even bigger dependence for foreigners on our wealth. That interdependence is what markets are about. It’s why they’re the best way for any two countries to get along.

Jackson reminds me of the comedian who said, “I bought an ant farm, and those little guys didn’t grow a thing.”

Jackson’s view may be as stupid as he is wealthy. But his idea is not, in this democracy of ours, unpopular. Jackson asserts that “our research shows, and this has been confirmed by independent research, that the majority of American consumers would support” his $1-per-gallon gasoline tax hike.

Okay, so the biggest car salesman in the country is trying to get noticed by saying the gas tax ought to be $1 per gallon higher, and every Capital One cardholder in America agrees with him. It’s as if an ugly kid at a homecoming dance yelled, “FIRE” to the top of his lungs, and instead of kicking the crap out of him, they pair him up with the head cheerleader and put a crown on him.

When you’re done vomiting, turn from the Jackson interview to the letter to the editor at the top right corner of page A17 of Monday’s Wall Street Journal. Jim Owens, CEO of Caterpillar, wrote the letter. Caterpillar makes mining and construction equipment, and exports billions worth of the stuff every year. Unlike the bankrupt U.S. auto industry, the commodities bull market has been very, very good to this particular mining equipment manufacturer. Caterpillar’s stock has tripled in five years.

If AutoNation’s CEO seems to be bucking for the 44th U.S. Presidency (on the Democratic ticket), Caterpillar’s CEO must be trying to overthrow the government. “Protectionism is for losers,” says the Caterpillar CEO. Owens thinks U.S. manufacturing companies should innovate, emphasize quality, embrace lean manufacturing principles, invest in their workforce and believe they can compete globally. Rather than whining to the government, Owens favors working harder.

Of protectionism’s possible effects on the global economy, Owens says, “Personally, I can think of no faster path to world wide recession than for multiple engines of the global economy to turn against one another.” Owens calls trade liberalization a “win-win-win” proposition. Sounds like he’s been reading up on the Great Depression.

This is no mere academic rant. At bottom, Michael Jackson of AutoNation thinks politics trumps markets, and Jim Owens of Caterpillar knows everybody has to work for a living. Which one would you want running your business? A worker or a whiner?

A big part of the job up at the top is capital allocation. One of the primary traits in a good manager and capital allocator is a strong character. I leave it to you to decide which CEO discussed above has more character and which one you’d entrust with the allocation of $100,000 or so of your nest egg…