The View From 1776

The motivation for the lawsuit in the new TV series Damages is nonsensical. 

The opening episodes have revolved around a clash of two titans: Glen Close as Patty Hewes, a ruthless and hard-boiled plaintiff lawyer, and Ted Danson as Arthur Frobisher, an apparently equally ruthless and highly successful entrepreneur.  The implausible plot brings them into a head-to-head clash. 

The audience see brief scenes suggesting that Frobisher talked his employees into investing much of their life savings in his company’s stock, shortly before he sold his own stock in the company to an outside buyer.  Somehow or other, this bankrupted his employees.

Think about it for a moment, however.  Clearly Frobisher had a very successful company, successful enough for an outside investor to buy Frobisher’s presumably controlling interest in the company.  How did change of stock ownership bankrupt the employees?  In most takeover situations, the stock price is pushed up, at least initially.

What could Frobisher possibly have gained by advising his employees to invest in the company stock, whether he was planning to sell his stock, or not?  In a company large and profitable enough to support Frobisher in the lifestyle we see, the investment of employees in the company stock would have been a drop in the bucket compared to the holdings of institutional investors.  If all employees had bought stock, their purchases would likely have had no impact at all on the stock price, and it wouldn’t have put a dime into Frobisher’s pocket.

Charitably, we can say that the scriptwriters simply don’t understand the real business world.  They appear to have concocted a stew of unrelated ideas from Enron to the Martha Stewart case, and from the 1980s leveraged buyouts that led to dismemberment of companies to pay off acquisition debt.  Then they sprinkled the broth with Karl Marx’s view that capitalist profit is really stolen from the workers.

But today’s audiences, schooled since the early 1960s to believe that all the world’s ills result from capitalism, accept the script premise without a second glance.  Our colleges and universities have inculcated the mindless assumption that, if an entrepreneur is successful, it can only be because he has oppressed the workers. 

As Derek Bok, former president of Harvard, lamented:

Many seniors graduate without being able to write well enough to satisfy their employers. Many cannot reason clearly or perform competently in analyzing complex, non-technical problems, even though faculties rank critical thinking as the primary goal of a college education. Few undergraduates receiving a degree are able to speak or read a foreign language. Most have never taken a course in quantitative reasoning or acquired the knowledge needed to be a reasonably informed citizen in a democracy. And those are only some of the problems.

We can be sure, however, that all seniors will have been repeatedly exposed to liberal-Progressive-socialist ideology.

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