If you get to thinkin' you're a person of some influence, try orderin' somebody else's dog around.

(Most of this post is taken verbatim from Vicki Haddock’s article "Above the Influence", California Magazine, May/June 2009, p. 41-43, based on research from Berkeley psychology Professor Dacher Keltner, Cameron Anderson (Haas Business School), and graduate student Gavin Kilduff.)

Power flows to self-confident people who speak up – even if they don’t know what they are talking about and are often wrong. Power tends to erode empathy, and to cause the one in power to look upon themselves as the center of the universe. When people go on a power trip, they typically are encouraged by fawners and flatterers. Small wonder that the powerful come and go, yet year after year the rest of America looks at the those in Washington and on Wall Street and asks, “What were they thinking?!?”

Power doesn’t corrupt, however, as much as it reveals the true character. Those who already were community-oriented (“I look out for others”) or exchange-oriented (“I give something in the expectation of something equal in return”) tend to become more generous in power, while those who are innately self-centered become more selfish. Abraham Lincoln observed, “Nearly all men can stand adversity. If you want to test a man’s character, give him power.”

My advice to those in power: take out the trash twice a week.

The Vice President should perform Party duties for the President

The President should serve the entire nation from a position above normal party politics; so, he or she should refrain from performing Party duties, such as fund-raising, campaign rallies, and party-only speeches and meetings. The party in power will of course resist this, as the Presidency is too big a pulpit to resist using for partisan advantage. The Vice President, however, could perform these duties as the President’s representative, while keeping the President away from the partisanship inherent in party functions. Of course, this would take tremendous personal integrity from the President to resist party calls for favoritism.

To this American, something does not seem right watching any President raise money for other members of their party.

GM failed because its liabilities were based on negotiation, not productivity. Americans should learn a lesson.

I recently bought a new 2009 Buick Enclave and know that GM makes world-class cars. The bumper-to-bumper 5-year service warranty and On Star remote diagnostics show that they also know how to innovate and run a service business. Nevertheless, today GM filed for bankruptcy, while Ford and Toyota continue as independent car manufacturers.

General Motors was a phenomenal business that produced huge profits and benefits during its Alfred Sloan era. But eventually, the stakeholders (executives, unionized employees, dealers, politicians) placed liabilities on GM that paid out based on the results of negotiations, not productivity or business conditions. Thousands of dealerships built when GM had a 50% market share were unnecessary today, but state laws and inflexible regulations prevented their closure. Lifetime benefits and pensions negotiated when GM was young and growing cannot be sustained when it is older and shrinking.

Over the years, I’m sure that union leaders were congratulated for extracting “guaranteed” wages, executives got big bonuses for making promises that prevented a strike in exchange for liabilities pushed out far past their retirement, and politicians were re-elected for protecting their patrons. But any “guarantee” that is not based on productivity and a sound business model (that includes a reasonable profit and return on capital) is doomed to fail.

Americans should learn a lesson from General Motors. Our politicians make “guarantees” that lead to applause, re-election, and a comfortable consulting retirement. But these liabilities will not be sustained unless they are connected to productivity and a sustainable way of life, one that ensures our great-grandchildren will have the same blessings that we have.

P.S. GM is still a great company, but a horrible business.

Nothing is Too Big To Fail

Bloomberg reports that Nancy Pelosi “says GM is too big to fail”. Americans need to remember that nothing is too big to fail – including the United States of America. The responsibility to prevent failure is ours – to share the blessings of liberty among all instead of everyone accumulating as much as possible for themselves and then getting out before it all falls down.

Failure is not guaranteed when something is "too big" - it happens when the system is too complex or inflexible to adapt to external changes.