Page 2 of 3 FirstFirst 123 LastLast
Results 11 to 20 of 23
Thanks Tree19Thanks

Thread: How “Shareholder Value” is Killing Innovation

  1. #11
    Veteran Member bajisima's Avatar
    Joined
    Mar 2012
    Posts
    41,618
    Thanks
    24449

    From
    New Hampshire
    Quote Originally Posted by labrea View Post
    Doesn't really make sense that they would be more worried about taxed on income from stocks, than income from work.
    True although some people that get stock options rely on that lump sum to pay for college or a new car. So any taxes that come from that hurt more than income. Income is static, one knows what they make but stock varies widely.

  2. #12
    Veteran Member bajisima's Avatar
    Joined
    Mar 2012
    Posts
    41,618
    Thanks
    24449

    From
    New Hampshire
    Quote Originally Posted by chaos View Post
    Capital gains is not paying its fair share of tax because of republicans but also because the democratic leadership does not represent the working and middle class.
    Well that's because they play mind games with the middle class. They start out by asking for tax breaks or "we will leave" and the taxpayers grant them what they want for fear of them pulling out. We have a major defense contractor in NH who does this like clockwork. Ask for 10 year tax breaks or threaten to leave the state. The people panic and elect whoever is endorsed by them. Its a game.

  3. #13
    Cat-tastic Babba's Avatar
    Joined
    Jul 2007
    Posts
    64,888
    Thanks
    45407

    From
    So. Md.
    I recently started a thread that explains that changes in laws enacted in the Reagan era would go a long way toward reversing this.

    All of this was happening amid a wave of deregulation in the US.

    The head of the SEC, John Shad, was a former banker — something that hadn't happened in 50 years. He, like Reagan, believed that the private sector could channel funds better without regulation and so he wrote rules with that in mind.

    For example, in 1982 he made it legal for companies to repurchase their shares on the open market pretty much whenever they wanted. Previously, the SEC had considered this a form of stock price manipulation.

    This was also the era of the corporate raider, pushing companies to become leaner and more profitable as quickly as possible.

    The shareholder became the main thing for a company to worry about. Employees lost their status. Companies feared getting attacked, so they bent over backward to mollify the former at the expense of the latter. Those new stock repurchasing rules, for one thing, allowed them to shore up their defenses by buying back stock. But, of course, that meant spending money that could've gone to innovate, invest in new technology and equipment, or reward workers.

    That's when Lazonick says the financialization of the American corporation began in earnest, and blue-collar workers were left behind by corporate America and the government alike:

    "As secure middle-class jobs for high-school-educated blue-collar workers permanently disappeared, there was no commitment on the part of those who managed US industrial corporations or the Republican administrations that ruled in the 1980s to invest in the new capabilities and opportunities required to upgrade the quality and expand the quantity of well-paid employment opportunities in the United States on a scale sufficient to re-establish conditions of prosperity for these displaced members of the US labor force."

    Reagan's mission was to cut the budget — which meant not spending money investing in the future of these workers. In the decades after this process started, manufacturing workers would find their numbers diminishing as corporations sought ways to please shareholders, and the government sought ways to lower taxes and deregulate the private sector.

    No one had their backs.
    WH is Only Telling Half the Story About What Happened to American Jobs

    Business, very naturally, exists to make profits and they're going to do that in the easiest way it can. Just as water is going to take the path of least resistance. The deregulation of the 1980s and 1990s caused this. Reversing that deregulation would mean that businesses once again would need to invest in themselves in order to increase profits rather than repurchasing stocks.
    Thanks from chaos

  4. #14
    Swamper chaos's Avatar
    Joined
    Nov 2015
    Posts
    3,320
    Thanks
    1500

    From
    Cyberia
    Quote Originally Posted by Babba View Post
    Business, very naturally, exists to make profits and they're going to do that in the easiest way it can. Just as water is going to take the path of least resistance. The deregulation of the 1980s and 1990s caused this. Reversing that deregulation would mean that businesses once again would need to invest in themselves in order to increase profits rather than repurchasing stocks.
    Profits being the operative word. Taxes were intended for profits but somehow our puppets in congress decided to tax labor instead. Americans have been programmed to believe that they are making a profit on their labor.
    Thanks from Babba

  5. #15
    Junior Member Claudius the God's Avatar
    Joined
    Sep 2012
    Posts
    1,881
    Thanks
    1158

    From
    California
    Quote Originally Posted by splansing View Post
    Certainly to some degree, the speculation on the stock can obviously impact the company. Any stock held by the company can be sold at the speculative price, so the company can gain funding by selling any shares it holds after speculators and traders drive that price up on the open market. It could buy them back and do the same thing at any point.

    The whole thing is deeply imperfect, and so the theory behind it is pretty much useless. By the time a company is "worth" a hundred million, they may only have reaped 10 million through the sale of stock. Obviously some companies just blow up. If you create an iPhone you can be a $100 million company with only $10 million in initial capital, because the idea is so good and caught on so fast and they're selling like hotcakes. But most companies are going to have a hard time delivering on a stock that's priced 5 or 10 or 50 times above where it was issued.

    Obvious exceptions like financial institutions that manufacture profits through fraud and theft aside, of course....
    Yes but secondary issues of stock are really about dilution are they not? if a company sees their value go up, then they can issue fewer shares to get the same needed amount. if they issue fewer shares, it dilutes the stock at a slower rate. At the end of the day, its about who holds shares not about the company itself.
    Thanks from Babba

  6. #16
    Cat-tastic Babba's Avatar
    Joined
    Jul 2007
    Posts
    64,888
    Thanks
    45407

    From
    So. Md.
    Quote Originally Posted by chaos View Post
    Profits being the operative word. Taxes were intended for profits but somehow our puppets in congress decided to tax labor instead. Americans have been programmed to believe that they are making a profit on their labor.
    Yep. And they've also been convinced that we have to keep taxes low on the wealthy because the average American might be wealthy one day, too. LMAO
    Thanks from chaos

  7. #17
    Swamper chaos's Avatar
    Joined
    Nov 2015
    Posts
    3,320
    Thanks
    1500

    From
    Cyberia
    Quote Originally Posted by Babba View Post
    Yep. And they've also been convinced that we have to keep taxes low on the wealthy because the average American might be wealthy one day, too. LMAO
    It's called the lottery complex. Poor people vote to keep taxes low on the rich because they believe that one day they are going to win the lottery.
    Thanks from Babba and Ian Jeffrey

  8. #18
    Mad Genius For Hire Puzzling Evidence's Avatar
    Joined
    Mar 2015
    Posts
    16,282
    Thanks
    6708

    From
    Derpville USA
    Quote Originally Posted by chaos View Post
    It's called the lottery complex. Poor people vote to keep taxes low on the rich because they believe that one day they are going to win the lottery.
    Well, it sounds noble too. It is the republican equivalent to sucking up to minorities.

  9. #19
    Swamper chaos's Avatar
    Joined
    Nov 2015
    Posts
    3,320
    Thanks
    1500

    From
    Cyberia
    Quote Originally Posted by Puzzling Evidence View Post
    Well, it sounds noble too. It is the republican equivalent to sucking up to minorities.
    I disagree. The republican establishment makes it clear that only white christian males need apply.

  10. #20
    Veteran Member
    Joined
    Mar 2007
    Posts
    29,419
    Thanks
    3671

    The OP is ridiculous. Every company makes its own decisions about when to reinvest and when to payout dividends. If they never reinvest, the problem is bad management.

Page 2 of 3 FirstFirst 123 LastLast

Similar Threads

  1. Replies: 30
    Last Post: 18th September 2016, 09:03 AM
  2. Crusader Assault Rifle Features New Safety Innovation
    By NightSwimmer in forum Political Humor
    Replies: 6
    Last Post: 5th September 2015, 05:38 PM
  3. A Chinese Innovation in Fraud
    By SamC in forum Economics
    Replies: 3
    Last Post: 29th January 2014, 02:37 PM
  4. Innovation and america!
    By Feetie in forum Economics
    Replies: 10
    Last Post: 30th January 2011, 06:11 AM
  5. Pelosi's Health-Care Bill "Openly Hostile" to Innovation
    By Forplay in forum Political Discussion
    Replies: 10
    Last Post: 13th November 2009, 01:13 AM

Tags for this Thread


Facebook Twitter RSS Feed