It's fitting that Mel Brooks' The Producers has been the great Broadway smash of the '00s. The musical, after all, forecasts America's new business model: Accountant Leo Bloom declares that "a producer could make more money with a flop than he could with a hit."
As even a cursory glance at the business pages tells you, ours is an era in which the notion of spinning a flop into millions is no longer a farcical idea: It has become common business practice. The first inkling of this new development in capitalism came in January, when EMI reportedly terminated its $80 million contract with Mariah Carey at a cost of $28 million after only one album and allowed her to keep a $21 million signing bonus. In other words, she earned $49 million for the soundtrack to Glitter. At the same time, the Enron case was demonstrating that even rampant incompetence, mismanagement, and financial shenanigans don't curtail one's right to a seven-figure salary.
And, most recently, it was revealed that L. Dennis Kozlowski stood to make more for leaving Tyco under a cloud of allegations than he would have had he successfully served out his contract. There was a time when the powerful dreaded failure; the belief was that the higher one climbed, the further one had to fall. Now, however, it is possible to make grave mistakes and find oneself not only not ruined but amply rewarded. Failure has become the new success.
This switch has happened gradually. At the beginning of the 20th century, it was still possible to screw up so badly that one disappeared, never to be heard from again. The annals of the Great Depression are filled with tales of those who crashed from opulence to abject poverty. Hollywood had silent-film stars—the Clara Bows and Fatty Arbuckles—who were ruined by the talkies or their own vices.
But if it was once the case that there were no second acts in American lives, there are now not only second acts but third, fourth, and fifth ones. This is not entirely unhealthy: The belief that one shouldn't be judged by one's worst mistakes resurrects careers that might otherwise have ended. Thus, Sergio Zyman rebounded from the failure of New Coke to lead the company to great success and landed on the cover of Fortune in a story headlined, "So You Fail. Now Bounce Back!" That story put a new spin on screwing up: "If you haven't failed yet, you probably will. And for the benefit of your career, you probably should." The comeback came to be seen as an inevitable phase in one's career: Witness the endless birth-death-redemption cycle that is the life of John Travolta.
Sometime in the 1990s, though, the notion of failure as the necessary prelude to success reached its decadent phase. In this, Hollywood led the way. When the movie Showgirls flopped in theaters, its distributor, MGM, decided to actively sell it as a bad movie, arranging midnight shows stocked with drag queens shouting the film's lines back at the screen. The notion of shame in failure came to be seen as archaic, and the "redemption" phase of a comeback grew shorter and shorter until it disappeared entirely. As Hugh Grant taught us, no matter how tawdry one's indiscretions, one can earn forgiveness through a self-deprecating chat on a national talk show. Similarly, Bob Dole didn't enter a Nixonian seclusion after his presidential election defeat—he swiftly segued into his new role as a pitchman, poking gentle fun at his own inability to win.
The '90s cultivation of an appreciation for failure was ideally timed since the '00s have made failure epidemic. Failure is not merely more common than success these days, it's also more interesting. The dot-com mania didn't produce many enduring companies, but it has given us such fine documentaries as Startup.com. Toby Young's writing may not have filled many pages of Vanity Fair, but it managed to fill 368 pages of his new memoir of working there, How To Lose Friends and Alienate People. And Stolen Summer may not have been much of a movie, but how about that Project Greenlight?
As these examples show, with a little effort, one can fashion a silk purse from a sow's ear; but often, even such rudimentary stitch work is no longer necessary. As the New York Times noted during the furor over Kozlowski's pay, such deposed CEOs as Ford's Jacques Nasser and Mattel's Jill Barad also received lush severance packages despite lackluster performances.
Perhaps the Kozlowski-style deals are anomalies—the final convulsions of the spend-happy 1990s. Or perhaps they presage something more: Perhaps, at long last, the bothersome link between merit and reward has been definitively severed. The only drawback, it appears, is the brief discomfort of public notoriety that comes with those riches. Indeed, for those who still possess a vestigial sense of discomfort at seeing sloth, greed, and incompetence rewarded, it's tempting to look at the new group of millionaire failures and wonder: How can they sleep at night? To which there can be only one answer: atop massive piles of 10s and 20s.