Ayn Rand-loving CEO destroys his empire The invisible hand waves bye-bye to Eddie Lampert, whose business plan has run Sears into the ground LYNN PARRAMORE, ALTERNET TUESDAY, DEC 10, 2013 09:00 AM EST [This article originally appeared on AlterNet.] AlterNet Once upon a time, hedge fund manager Eddie Lampert was living a Wall Street fairy tale. His fairy godmother was Ayn Rand, the dashing diva of free-market ideology whose quirky economic notions would transform him into a glamorous business hero. For a while, it seemed to work like a charm. Pundits called him the “Steve Jobs of the investment world.” The new Warren Buffett. By 2006 he was flying high, the richest man in Connecticut, managing over $15 billion thorough his hedge fund, ESL Investments. Stoked by his Wall Street success, Lampert plunged headlong into the retail world. Undaunted by his lack of industry experience and hailed a genius, Lampert boldly pushed to merge Kmart and Sears with a layoff and cost-cutting strategy that would, he promised, send profits into the stratosphere. Meanwhile the hotshot threw cash around like an oil sheikh, buying a $40 million pad in Florida’s Biscayne Bay, a record even for that star-studded county. Fast-forward to 2013: The fairy tale has become a nightmare. Lampert is now known as one of the worst CEOs in America — the man who flushed Sears down the toilet with his demented management style and harebrained approach to retail. Sears stock is tanking. His hedge fun is down 40 percent, and the business press has turned from praising Lampert’s genius towatching gleefully as his ship sinks. Investors are running from “Crazy Eddie” like the plague. That’s what happens when Ayn Rand is the basis for your business plan. Crazy Eddie has been one of America’s most vocal advocates of discredited free-market economics, so obsessed with Ayn Rand he could rattle off memorized passages of her novels. As Mina Kimes explained in a fascinating profile in Bloomberg Businessweek, Lampert took the myth that humans perform best when acting selfishly as gospel, pitting Sears company managers against each other in a kind of Lord of the Flies death match. This, he believed, would cause them to act rationally and boost performance. Lynn Parramore is an AlterNet contributing editor. She is co-founder of Recessionwire, founding editor of New Deal 2.0, and author of Reading the Sphinx: Ancient Egypt in Nineteenth-Century Literary Culture. Follow her on Twitter @LynnParramore. Associated Press articles: Copyright © 2014 The Associated Press. All rights reserved.
Posted on: Mon, 23 Jun 2014 15:48:33 +0000
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