[LMB] OT: Marylin's economics discussion
ed at edburkhead.com
Thu Nov 4 14:51:15 GMT 2010
On 2010-11-04 3:46 AM, mtraber251 wrote:
> Companies should not put the interests [and profits] of the
> stockholders first. The main reason that offshoring is happening is to
> eke out more profits for the stockholders and executives.
The companies are *owned* by the stockholders. It's their investment.
Certainly you can make a company where all the profit goes to the
employees -- just make it an *employee owned* company. The grocery
store I grew up with in Iowa has now expanded to my (displaced Iowan)
location in Peoria, Illinois -- HyVee is an employee owned company. It
grows, it's successful, it does well.
But, must all business follow that model? I don't think so.
Many companies offer their employees stock options to provide a feeling
of ownership and participation in the company. That can work - we have
some stock in the company in which my wife worked. It can also be a
catastrophe - think of the Enron employees who had their retirement
accounts invested in company stocks. When the company went down, they
lost *both* their stocks and their retirement nest eggs.
At the same time, I think that boards of directors who pay ridiculous
sums to their high executives are dumb. I would not choose to invest in
At the same-same time, I can understand that a company that feels
threatened may want the special proven-by-experience top gun executive
to save them. It could really be worth any price to save their
investments not to mention the jobs of 10,000 or 40,000 employees.
Blanket statements (including this one) are unwise.
JMH non-specialized O
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