Power-generation billionaire Robert C. McNair’s death last week deprives the city of Houston—that capital of the Americas, as I am fond of calling it—with its essential steadying voice. Here is a metropolitan area that is probably the best example of the American Dream as we can muster in the country these days. There are so many thousands, millions, of regular people doing well in life here. Exceptional as it is, Houston needs reminding that it can keep it up, that its outstanding success is not an illusion—an engaño, the term the vast Hispanophone population across the metro would use.
Houston rising. Photocredit: Getty
Bob McNair was the primer inter pares of the high Houston business set who led by word as well as deed. He was the one everyone—the other rich included—would look to when times might suggest that the Houston model was becoming obsolete. And everyone always knew what he would do. Bob McNair would quiet the crowd, issue a pithy and stirring endorsement of all things free-market, and settle back into his seat amidst a palpable renewal of confidence and optimism in the room.
Bob McNair had a gift for distilling, in the form of humbly delivered communication, the awesome essence of the free-market system. He used the platform established by his wealth and success to put that gift to good use. I dare say that without Bob McNair’s steadying voice over the past several decades, Houston’s confidence might have eroded such that the place, conceivably, could have forsaken its principles. Bob saved Houston, just maybe, without our ever even knowing it.
For example, back in the bleak days of the fall of 2008, in early November as the economy was imperceptibly beginning its recovery after the bizarre free-fall of recent months, Bob mounted the rostrum to give an address to a hundred some businesspeople, intellectuals, students, and friends at a gathering at the center of Houston’s best living, River Oaks Country Club. Bob told those gathered to rededicate themselves to everything they knew was right. Let the economy heal by virtue of its own processes, not those of the government. Understand that whatever has happened lately, it is the exception to the unerring rule that free enterprise brings success and prosperity to countless people, far beyond the entrepreneurs and CEOs who call businesses into existence and run their operations.
And then Bob went into a riff on mark-to-market. He expressed his puzzlement at how an economy could let global bureaucratic rules shut down all sorts of going businesses because accounting or something. Bob did not have a problem with mark-to-market per se—reporting the immediate liquidity value of any asset on a balance sheet—but with the odd requirement that businesses be compelled to shut down at whatever moment marking-to-market gets the balance sheet below a certain level.
I was reminded of J.P. Morgan’s legendary dispatching of the 1907 crisis, when Morgan gathered everyone with “distressed assets,” along with their counterparties, in his parlor for an evening into the night, dismissing the group when agreement was reached on how to keep all concerns running. Panics in the old days lasted the equivalent of five minutes because keen leaders knew that rules had no value in themselves and were secondary to the progress of good outfits. The spirit of Morgan was there in River Oaks that day, I thought.
Bob McNair’s own pecuniary fortune came care of Enron. In the late 1990s, Enron bought a share of his power-generation assets for over $1 billion in good cash, which Bob then used to establish the National Football League back in town care of his Houston Texans. The Texans have always stood as rather an indictment of the common opinion that Enron was corrupt to the core, an accounting fiction. Whatever fraud there might have been at Enron as exposed in the early 2000s, it had real money prior to that. The existence of the Texans proves it.
I occasionally spoke to audiences just after Bob McNair over my better part of two decades now of living here in Houston. Bob was an easy, not tough, act to follow. When a scholar sounds off about how retiring government across-the-board can bring prosperity into its season in the sun, it can rally people, but not fully dispel the impression of implausibility. When Bob spoke, implausibility vanished from the scene. Now that Bob has died, I have a renewed sense that his constant affirmations to the Houston community were essential in keeping us from questioning our commitments—and sliding into fashionable Keynesianism or whatever Beto O’Rourke was selling, weaknesses we are all prone to, now matter how true we may think we are to the free market.
