Once upon a time there was an Engineer named W. Edwards Deming who preached the message that quality reduced costs over time.  This was counter-intuitive since quality was thought to produce rejected parts, increased scrap, decreased throughput and increased manpower.  And so even though he gathered some followers, his message was quietly ignored until a war broke out and the military insisted on purchasing things that would not break down at critical times.  Hence the engineer found people who had to listen to and put his ideas into practice.

After WWII, he found that the devastation of the defeated former enemy, Japan, provided fertile ground where the vanquished had nothing to lose by adopting these quality systems.  Amid the rubble, the resurrected manufacturing system first relied on making cheap substandard products in order to generate cash flow in a cash-starved economy.  As a result, the country became synonymous with junk, poorly made disposable products.  However, this country did not work under the type of free enterprise system adopted by the United States.  Instead, they made communal decisions to eliminate internal competition and put manufacturing in the hands of a few who had power and vision.  These people embraced Deming’s principles and quietly put quality systems into use.  And this strange concept worked.  Scrap rates actually decreased, costs were controlled, and more importantly quality improved.  The nation’s ideology of group welfare over the individual enabled the people to accept quality standards and strive to actually produce goods that were manufactured to lower tolerances than the specification called for.  The combination of new (rebuilt) manufacturing facilities and an ideology of quality allowed the Japanese to be a low cost, quality manufacturer.

In the first post-war years the Japanese introduced low cost small cars of reasonable, but undistinguished quality.  Detroit did not like competition, but the market was small and unprofitable so they stood by and watched as the Japanese introduced these cheap cars which, after all, competed more with the Germans than with US automakers.  Once the Japanese had established their “limited” niche, they actually studied their products and their market.  They found that cold winters and salted roads combined to eat large chunks in their products, from the inside out.  They learned.  Instead of installing the infamous undercoating option (see the movie Fargo?) they went inside their vehicles and redesigned their protection package applied to their steel before it even looked like a car.  Using this revolutionary technology industry developed new models and began shipping improved cars to the US.

Still, Detroit figured that by making quality tiny cars, the competition had to be sacrificing profitability for sales.  Since it did not impact the sales of their behemoths that were in high demand, they ignored the competition..sort of what the big dinosaurs of yesteryear may have said about those small, pesky creatures called mammals.   Detroit was sure that only hippies and malcontents wanted small, affordable cars.  The American Dream, after all, was to progress upward to the Shangri-la that was the Caddy.

And the American pie was so large that everyone clamored for a piece.  And organized labor rose up and, recognizing the avarice of the Big Guys,  demanded plums by threatening to disrupt the bakery.  The Big Guys chaffed, but resolved to satisfy organized labor by increasing the size of the pies they produced.  So organized labor elevated their benefits above all others and rode upon the train called gravy.

Once the Japanese had established a firm base of dealerships and sales, they slowly introduced slightly larger cars.  To deflect any potential objections they agreed to restrict sales by accepting import quotas.  The Big Guys figured, well it’s just a few and after all they are all cheap Japanese products.  And in biblical progression the Corolla begat the Camry which begat the Tundra and the Datsun begat the Nissan and the Honda sprang forth from the land with the Civic and the Accord.  And the ground began to shake and moan and from the earth sprang forth the Lexus, the Acura, and the Infinity.  And finally the Big Guys realized that a mistake had been made and solemnly blamed previous generations of managers and collected their own large bonuses.  Then did they pay homage to 6 sigma and JD Powers and raised the banner of Crosby and Baldridge.  And the Big Guys ignored the distant air, “too little, too late.”  Their managers congratulated themselves that they enjoyed cheap gas and Americans loved their trucks, off-road vehicles and traditional symbols of luxury, spending millions advertising how much fun it was to ride the Escalade in the snow, in a balmy 90 degree Miami Winterland.

But then the enemy appeared.  The price of petroleum and gasoline continued to rise exponentially but the Big Guys did not understand the notion of an exponential increase and chose to look instead at their own power and the profits generated by financing the sale of their vehicles.  When consumer resistance was met, interest rates were temporarily lowered and leasing was introduced and the dollars kept rolling into their coffers and the pockets of their managers who took credit for the effects of an expanding economy.  And they ignored the distant air that proclaimed, “beware, beware.”

But the monster Petroleum rose from its slumber, stretched out its arms, and reached for $200 a barrel.  And the price of gasoline moved in panic, striving past $4, looking for the next plateau to reach.  And the Big Guys shook and shuttered plants (and laid off their workers and renegotiated contracts to reduce the cost of labor,) rejected hybrid technology and prepared to last out the uncertain times, confident that another election and a little time would reestablish the world in the mode desired by the Big Guys.  They would hibernate over the winter and rise refreshed and rapacious.  And they ignored the raven tap, tap, tapping at their door.

But in that time of troubles emerged other monsters, even more terrible than the first:  Big Guys of the financial kind.      These guys had not been content to wait with open pockets and to allow the filling of the pockets to proceed at its own rate.  Instead they granted stock options, inflated earnings and tried to cash out before the deception had been discovered.  The Big Guys of the Financial Kind ignored prudence and growled ever more rapaciously for spoils.  First mortgages begat second and third mortgages and jumbo loans were spawned.  And the price of land rose to never before imagined heights and the Big Guys of the Financial Kind reveled in the heady atmosphere and grasped for more and more.

And then the ground shook and the investment firms and financial institutions began to crumble and the wellspring of cash trembled and its flow began to diminish and cease, but then Barney, the new kind of Dinosaur said “not to worry, everything is under control”

Then the lowly consumer felt fear and the first and second and third mortgages fell due and the wellspring of cash no longer overflowed into the pockets of the consumer.  As the cash ceased to flow, the price of real estate began to collapse which caused the banks to fail and the financial institutions to default.  And the insurance giants who made more money from investments in the market than from premiums began to crumble and received largess from the government.  And the Big Guys of the Financial Kind were suddenly not able to provide their consumers with 8 year loans or 3 year leases at zero percent and lo, sales began to dwindle and dry up.

More terrible than anything imagined in recent time, the whispered words “recession comes” were once more heard on the street.  And organized labor saw the train called gravy diminish and they were afraid.  They returned the plums that the train might continue down the track, but it was too little, too late.  And the Big Guys who no longer enjoyed the sales of their profitable behemoths began to hemorrhage cash and to look for someone to blame.  And they looked for a hero, (but mostly for a scapegoat) as they awarded themselves bonuses took early retirement and golden parachutes.  Over the wailing of the investors and the consumers came their pleading–BAIL US OUT, TOO.  Bankruptcy is bad for the country.  You owe us for all those good years.  The time has come to give us money from the public coffers.  (And AIG sold off its assets.)  And the people looked for a hero.

The people looked to their leaders, but the vision of the leader was affixed to the East and would not look toward home.  Neither flood, nor storm, nor economic crises could wrest the vision of the leader from the East, for the leader was not a Hero and was impervious to the cries of the common people.  The people looked for leadership and did not find it.  One near the leader rose up and proclaimed himself a Hero, but the people did not see him since he stood in the shadow of the leader looking East.  So the hero did not emerge from among those in power, and the fear continued unabated.  And one rose up from among the people, and proclaimed himself a Hero, and turned to the people for support.  And though the people were accustomed to another, they turned away from the familiar and identified one of their own as a Hero.  And the Hero rose up and rallied the masses.  And…

And the Bib Guys  continued their lavish meetings, their outlandish bonuses, and they continued to stroke their golden parachutes.  And they brought forth the Hummer truck, the behemoth of behemoths, and advertised it during football games.  And never learned any lessons, ever, about anything.  And they ignored the distant air which proclaimed “I told you so.”  After all, “what is good for GM is good for the country.”