…One of the American companies that could not be hurt by a Soviet political retaliation was the legendary Caterpillar. Immensely respected in Moscow for its history, including its co-founder Benjamin Holt’s role in giving the world its first successful tractor, and modernizing military equipment, including inspiring the British creation of the tank in World War I, the Russians treated Caterpillar with an admiration bordering on reverence. It goes without saying, but closely connected to the above, that the Russians are always partial to excellent workmanship, and Caterpillar has always delivered on that account as well.
Accordingly, they were delighted to do business with Caterpillar. I remember the Soviet participants in our negotiations with the company. They almost considered it an honor, and very soon thousands of Caterpillar bulldozer tractors and pipelayers started arriving at their new homes in Russia. The company, already beset by domestic problems, seemed to regard its cooperation with the Russians as a long-term solution to many of them, and effectively structured its production process in the United States around the Russian orders.
Then came December 1979, when Soviet tanks rolled into Afghanistan. President Carter called the invasion “the most serious threat to the peace since the Second World War.” I was not a supporter of this invasion of Afghanistan myself then, but I would hardly qualify it, then or now, in Mr. Carter’s terms. I believe that he badly overreacted, adopting countermeasures that seriously hurt America without doing much harm to the Russians. If the reader remembers, he ordered the grain and technology embargoes and boycotted the 1980 Summer Olympic Games in Moscow.
Among the victims of President Carter’s boomerang was Caterpillar. Having been capably working on the fulfillment of Moscow’s orders, its storage facilities were filled with the machines to be shipped to Russia according to the delivery schedule. Now, suddenly, with the embargo, the machines had nowhere to go, and the disaster struck, finding this venerable flagship of American industry on the verge of bankruptcy…
So, here is my big question of this entry, behind the Caterpillar story. What was Washington thinking, then and ever since? Why is it all right to bail out financial tricksters, thieves, and irresponsible speculators, for billions of dollars, while so severely punishing the backbone of the American economy: her good-capitalist producer and creator of value? What is the psychology behind all this elevation of the parasite and denigration of the workhorse?...
Today, like four decades ago, I wish Caterpillar well. It has survived its ordeals, and does a lot of business these days, particularly with the Russians. The Russians do not have to come to East Peoria anymore, like they used to in the 1970’s. Caterpillar has come to them, like it has also come to China and other countries. Today its superior products roll out mostly from foreign plants, using foreign labor force, rather than their own American worker, like it was before. There are still American facilities left in the country, but these are severely downsized, and the share of American jobs in the company’s production has fallen dramatically.
I do not blame Caterpillar for that. Washington has treated them shabbily, and the lush climate of yore for American business in America has long been turned into a desert. What I still applaud my good old friend Caterpillar for, though, is that even today, they carry on the American banner around the world, with their solid CAT logo, with great dignity, unlike the Fanny Maes, Freddy Macs, and all other financial wizarding frauds, which have somehow evolved as the favorite daughters of Washington’s mad King Lear.
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