Corporations need more profits not less.

reply to post by gdeed


just a couple things, your replies are only a sentence or two long while the rest answer with many sources and logic that ties there whole argument together, you just repeat what you have already said disregarding the truth, and the truth is why sould a ceo yearly and quarterly receive raises while the average worker can bearly get by why should the executives have the same these people dont need that type of money to create jobs and the proof is in your face look at all the money they make and then look at how many jobs have been created look at how much rasises these people have gotton and then see how much the average workers wage rises ahh we get about a 25 cents a year while these top elite get thousands of dollars in bonuses, not to mention there friends in congress who make sure that most of there money is never paid in taxes how is this fair how does this create jobs how tell me how wow that was a nice rant hope i didnt go that far off topic

[edit on 26-2-2010 by truth_of_truth]

Here's an example of a rather typical scenario.

Large corporation with domestic manufacturing and big market share makes a big profit. The board members, egged on by big shareholders (banks and Wall Street investors) decide to close down the domestic factories and outsource manufacturing to a developing country. The benefit to the board is a big bonus for reducing the labour rates and real estate costs and the benefit to the big investors and bankers is increased profit and shareholder returns.

However, other manufacturers, seeing the profits to be made, do the same. There is then a large unemployed skilled workforce domestically to cater for. This usually means lower paid jobs in service sector or other lower skilled jobs (until they too are outsourced abroad).
The consequences of that are felt in a big way domestically, as those unemployed workers or now lower paid workers, can no longer afford to be the good little consumers they once were. Those goods they used to make and buy domestically can no longer be afforded. The taxes they now pay are lower so it hits the overall economy too. Of course, the board room boys have increased their pay and perks, and so too have the big investors, but at what cost to the country or it's economy?

The issue comes down to simple greed. There can never be enough profit for some people, especially those who measure their perceived worth purely on a monetary scale and the trappings and trinkets they surround themselves with. While the rich then get richer, the workers they have dumped in the name of profit get poorer. I am sure we all recognise the need to be profitable, and the benefits that can bring, but today's greed and shortsightedness on the part of many company execs and wall street is ruining whole countries. Is it any wonder people bitch about it?

reply to post by gdeed

No profits don't equal jobs that's for sure. If companies don't stash money away for raining days they will not be in buisness for long.

Not in this economic school of thought, we are all Keynesians now, didn't you hear?

In order for the Western economy to survive, a conveyor belt of internal wealth circulation must exist, indefinitely, and any interruption puts the economy into a tailspin.

To ensure a massive amount of cash is flooding into the economy from the top levels down, the Government has issued massive spending bills, not to mention the hundreds upon hundreds of billions pumped into the banks to filter into the economy..

The idea is to flood the economy with free money, or very cheap many, and very accessible money, the wealth will circulate to the consumer and begin a cycle anew. Only consumer wealth tends to have a more positive effect on corporations as it lifts all areas of economic indicators, from GDP to GPI and all areas in between .. we FEEL richer, if our cash in hand outstrips inflation (1990's?)

With Corporations HOARDING profits, at historic levels never before seen, we are seeing the top tiers of the economy growing massively richer.. yes, it increases indicators like GDP and Corporate Growth, it even increases taxation levels.. but it doesn't filter through the economy like the Keynesian model dictates is MUST in order to survive.. It's essentially removing part of the conveyor belt, but it keeps moving, and all that production just flies off the end onto the floor. Take away the circulation of wealth and you destroy the economy. Force corporations to spend, and they risk bankruptcy as Consumer defaults will accelerate.. either way, everyone is in for a hard time, and the Corporations are simply playing the Survivor game.

Companies are reporting higher profits then ever. The problem is, that a company used to return it to the workers. Now it is goes into stockholder pockets.

Have you met anyone lately that has worked for one company their entire lives? Not many these days, more like 6 or 7. Because people are now treated like drones instead of bread earners. There is no respect for the employer, the employer has no respect for the worker.

People keep talking about the good ol days. There were not the huge, massive, economy shaking companies in the good ol days.

Does anyone begrudge anyone a profit? No, Congrats you have a successful business. What people do begrudge is that wealth is being taken out of the system, and putting it into the pockets of fewer and fewer people.

They aren't giving the profits to shareholders either. Shares are a corporation's currency, like the green paper the Fed uses. They can steal wealth from shareholders by printing more just like the Fed steals wealth out of our pockets by printing more (aka dilution). Many of the companies that trade over-the-counter and on the pinks are, in fact, nothing more than share printing operations. If you call the transfer agent you'll find out that the number of shares outstanding is often a fraction of the number of shares that have been authorized. These companies exist only for the benefit of the executives at the top with huge salaries, ridiculous bonuses and golden parachute severance packages. The same way government today (the corporate state) exists only to benefit the career politicians who run it. They don't care about the consumer, their employees or shareholders/citizens.



[edit on 27-2-2010 by Crito]

Originally posted by nixie_nox
Companies are reporting higher profits then ever. The problem is, that a company used to return it to the workers. Now it is goes into stockholder pockets.

Stockholders are people that have pensions, 401ks and other entitilements, which is many workers.

Have you met anyone lately that has worked for one company their entire lives? Not many these days, more like 6 or 7. Because people are now treated like drones instead of bread earners. There is no respect for the employer, the employer has no respect for the worker.

Unions have created hate against companies so companies now treat employees with suspicion. There are millions of employess suing Wall mart and other companies because people would rather get rich by suing than working and now they can.

People keep talking about the good ol days. There were not the huge, massive, economy shaking companies in the good ol days.

Does anyone begrudge anyone a profit? No, Congrats you have a successful business. What people do begrudge is that wealth is being taken out of the system, and putting it into the pockets of fewer and fewer people.

I agree, the pockets belong to the lawyers, who are suing companies out of business everyday.

Originally posted by wbh72
My solution to corporate business is do away with the unions and give the labor force the same benefits as the CEO's. (Ex. If the company is profitable it is not by the will of the CEO alone but the entire company as a whole. If the laborer knows that he will benefit by getting a bonus and stock options same as the CEO for doing a good job and keeping cost down. Then he will do so.) And everyone wins the company, the stock holders, the CEO and the Laborer. Oh and there are way more middle class tax payers than the wealthy tax payers.

This is actually what Europe does -- in Germany the union leaders sit on the corporate board of directors.

This is the libertarian socialist model that Chomsky advocates -- aka anarchism -- where the workers do profit-sharing and also have a say in management.

It's based on economic democracy. Unfortunately the U.S. has a poor history of economic democracy -- corporations are legally people and people do not have bill of rights protection when on corporation property!!

www.davidcogswell.com...

"The Divine Right of Capital" by Marjorie Kelly addresses some of the most pressing problems of our age. While many assume that the corporate system is based on some sort of natural law, Kelly shows that the structure of the modern corporation is based on ideas that are so deeply ingrained in society we don't even recognize them as ideas.

The wealthiest 1 percent, who have increased their share of the total wealth from 20 to 40 percent in the last two decades, may be quite happy with the progress of events. Over half of the total gain in marketable wealth between 1983 and 1998 went to the richest 1 percent. But for many others the problems Kelly addresses, "wealth inequality, layoffs, speculative excess, corporate welfare, sweatshops and environmental indifference," need to be examined.

Corporate law, which has evolved not through legislation but through case law in the courts, mandates that a public corporation must maximize the revenue to shareholders, and that is the extent of its obligation to the community.

But in the post-Civil War period, the rise of the robber barons coincided with an evolution of corporate law that was rooted in the pre-democratic world. Corporations, which had been strictly limited in what they could do, were gradually altered through the courts to create the basis of a new aristocratic society. In the 19th century corporations were opposed by conservatives because they undermined both democracy and the free market. The tension between the aristocratic model of society and the democratic one is still with us today. In recent decades that tension is winding tighter as the extremes of wealth and poverty in the United States grow to resemble those of third world countries.

The mandate of a public corporations to maximize the return to shareholders is usually justified on the basis of the shareholders being investors, who provide the capital on which the business operates. But Kelly shows this commonly held belief is not true. Shareholders own the stock of the corporation and receive its profits, but they do not fund the corporation. The only time money from sale of stock goes to the corporation is when the new stock is issued. This takes place when a company goes public and perhaps after that, but only at very rare intervals when a corporation issues a secondary offering. In the steel industry, for example, a study shows that during the growth years of 1900-1953, issues of common stock provided only 5 percent of the working capital of the industry. The sales at the stock exchange represent only money changing hands from one speculator to another.

www.tellus.org...

The program is rooted in a set of fundamental Prinicples of Corporate Redesign that were developed through a two-year multi-stakeholder process: 1. The purpose of the corporation is to harness private interests to serve the public interest. 2. Corporations shall accrue fair returns for shareholders, but not at the expense of the legitimate interests of other stakeholders. 3. Corporations shall operate sustainably, meeting the needs of the present generation without compromising the ability of future generations to meet their needs. 4. Corporations shall distribute their wealth equitably among those who contribute to its creation. 5. Corporations shall be governed in a manner that is participatory, transparent, ethical, and accountable. 6. Corporations shall not infringe on the right of natural persons to govern themselves, nor infringe on other universal human rights.