Monday, August 20, 2007

The Rockefeller Technique

#283 The Rockefeller Technique

Ask Sam Walton, this works. John D. Rockefeller got a few bucks under his belt and started selling oil at a loss and putting everyone else out of business. Having done that, he raised his prices and made up the difference. It’s easier to do this now than it was back then. And it hits the bull’s eye every time.

A refinement came along when it looked like Japanese investors were buying up most of America’s best real estate. David Rockefeller, the head of the Chase Bank, figured out a way to give Mitsubishi Bank a royal screwing by dangling parts of a couple of realty dogs in front of them, and selling part interest which everyone thought was selling out, but was really selling nothing. Mitsubishi lost its shirt. Rockefeller walked away with enough money to buy Pluto and kept control of the real estate.

But the king of this technique had to be Nelson Rockefeller, and his caper didn’t even involve money. It only involved power.

Rockefeller was governor of New York. There was this guy, Robert Moses, whom everyone hated and feared and who seemed to run all the highways and the bridges and the parks and managed their planning and construction. He didn’t answer to anyone. He was the King. Governors, presidents, legislators, party leaders all kissed his ring and let him do what he wanted. Those who tried to get rid of him paid a heavy price, usually in a ruined career and near-homelessness.

Rocky was smarter. He took a look at the downstate transit systems and decided he could make one single agency that controls the New York City buses and subways, the suburban buses and commuter railroads and – oh, while we’re at it, let’s include the Triboro Bridge and Tunnel Authority, which was King Robert’s power base.

And that’s what he did. Moses would come to his office as always and issue orders. They wouldn’t necessarily be followed. He proposed building stuff. It hasn’t been built to this day. Nice office. Full staff. Good furniture. Fine salary. But Rockefeller shut that patronage mill down. Not that it hasn’t re-grown. But he offed the guy no one could touch.

And while he never admitted in so many words, we all pretty well knew what his object was, and that he’d accomplished it.

Now this was some decades ago and lately, people have forgotten how to do these things.

But there are a couple of pretty good potential cases awaiting. For example, the states of New Jersey and Pennsylvania are thinking about selling off their namesake turnpikes, or leasing them for a quick buck.

New Jersey’s Corzine should know better. He’s spent most of his life in the real world, accomplishing real things. Pennsylvania’s Rendell is just a politician and can’t be expected to know about how things really work.

These guys really want to kill the patronage mills run by the people who run the various roads. And the way to do that is to make a new agency that includes those people. Then, all they have to do as put their own guys on the agency’s boards and that’s the end of the patronage factory. At least for a decade or so.

Both governors are honking madly about how their states need money to fix bad bridges. Selling highways is not the answer. Just take a look at those elephantine budgets and move some money around. The roads get fixed, the bridges get fixed and the entrenched fixers get unemployment comp.

I'm Wes Richards, my opinions are my own, but you're welcome to them.

(c) 2007 WJR

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