Doesn’t Matter Who Wins the K Race; We’re All the Same

[Tyrone Slothrop]

Originally Posted by ThurgreedMarshall

Bonus culture and overpaying CEOs. You cannot tell me that the difference in talent levels between someone you pay $10 million/year and someone you pay $60 million isn't negligible. I refuse to believe that people commanding those salaries are worth anywhere near the difference between their salary packages.

Also, bonus culture on Wall Street will destroy us all. What is the personal risk to someone taking huge gambling risks with company assets? If you lose, the company (and/or taxpayer) pays. If you win, you get returns that are inordinately huge. We are right back where we were. Front-loaded salary packages will destroy us all (unless Amazon does it first).

Agree with everything you see here, pretty much, but the reference to Amazon is funny because the company consistently destroys its competition by investing for the long-term in a disciplined way.

[ThurgreedMarshall]

Originally Posted by Tyrone Slothrop

Agree with everything you see here, pretty much, but the reference to Amazon is funny because the company consistently destroys its competition by investing for the long-term in a disciplined way.

Two different concepts. You got the first.

The second is that we can't possibly succeed in a country in which everyone either works for Walmart or Amazon and can only afford to shop at those two places while each of them uses the safety net we all provide to avoid paying their employees a decent wage or providing healthcare, etc.

TM

[Tyrone Slothrop]

Originally Posted by ThurgreedMarshall

Two different concepts. You got the first.

The second is that we can't possibly succeed in a country in which everyone either works for Walmart or Amazon and can only afford to shop at those two places while each of them uses the safety net we all provide to avoid paying their employees a decent wage or providing healthcare, etc.

TM

I have decidedly mixed feelings about Amazon, but am generally in awe of their ability to execute. Often they outperform their competitors by focusing on what consumers want and making it happen. There are signs that maybe they've be slipping lately.

[Hank Chinaski]

Originally Posted by ThurgreedMarshall

Two different concepts. You got the first.

The second is that we can't possibly succeed in a country in which everyone either works for Walmart or Amazon and can only afford to shop at those two places while each of them uses the safety net we all provide to avoid paying their employees a decent wage or providing healthcare, etc.

TM

Was making small talk to the man at my bodega at 93rd and Broadway last night. They tore down the Europan next door and are fixing to built a tall apartment or condo. I miss the Europan. But I said “well you guys will be getting lots more business right?”

He said “that’s what people said when they built the apartment on the other side, but everyone gets everything from Amazon now.”

A bodega isn’t for considered shopping. There is a market a block down. The bodega is for walking back after dinner and realizing you need Pellegrino. I don’t get how Amazon impacts it. But it does.

I’ve two kids trying to sort out careers now (my son is back!!!) and I have no advice where to go that will have legs for 40 years.

[Icky Thump]

Originally Posted by Tyrone Slothrop

I don't get what's wrong with buybacks, conceptually. Is it not essentially like paying a dividend? If a company doesn't have a good way to re-invest its cash, why not let it give the cash back to its shareholders?

Buyback. You give someone money, they give you their equity in your company back.

Dividend. You pay someone for them to maintain their equity in your company

[Icky Thump]

Originally Posted by Hank Chinaski

A bodega isn’t for considered shopping. There is a market a block down. The bodega is for walking back after dinner and realizing you need Pellegrino. I don’t get how Amazon impacts it. But it does.

How many things do you need TODAY? coffee, milk for coffee, toilet paper, that's about it. How many things do you need for tomorrow?

[Hank Chinaski]

Originally Posted by Icky Thump

How many things do you need TODAY? coffee, milk for coffee, toilet paper, that's about it. How many things do you need for tomorrow?

I used to sometimes have an unexpected sudden need for a prophylactic, 2 even, but that has been awhile.

[sebastian_dangerfield]

Originally Posted by Tyrone Slothrop

I don't get what's wrong with buybacks, conceptually. Is it not essentially like paying a dividend? If a company doesn't have a good way to re-invest its cash, why not let it give the cash back to its shareholders?

They do have a good way to invest their cash. But investing in operations and workers pays out over the long haul. Buybacks get management that sweet sweet IBGYBG money now.

And in IBM’s case, they were strategically buying back shares owned by management. I guess that’s ok, because it’s public, so if it wasn’t ok, there’d have been issues. But that’s some really brazen self dealing.

I personally think IBM should have collapsed long ago and its scant assets sold to stronger competitors, as it’s supposed to work. But with our current system as it is, zombie companies like that (and there are many worse) are allowed to survive as, effectively, financial shell games.

The tide needs to roll out and those swimming naked need to be exposed. Limitations on buybacks would do that. And they’d also go a long way toward curbing the managerial conflicts of interest noted by TM, rather than enable them, as they are at the present.

[sebastian_dangerfield]

Originally Posted by ThurgreedMarshall

Bonus culture and overpaying CEOs. You cannot tell me that the difference in talent levels between someone you pay $10 million/year and someone you pay $60 million isn't negligible. I refuse to believe that people commanding those salaries are worth anywhere near the difference between their salary packages.

Also, bonus culture on Wall Street will destroy us all. What is the personal risk to someone taking huge gambling risks with company assets? If you lose, the company (and/or taxpayer) pays. If you win, you get returns that are inordinately huge. We are right back where we were. Front-loaded salary packages will destroy us all (unless Amazon does it first).

TM

I agree. We’re citing different problems which are working in concert. What you’re citing is the more insidious and tougher problem, as it’s cultural, and it’s pretty much corporate America’s get rich plan. That’s really hard to remove from CEO and upper management and board culture. But it can be done. It needs to be done. The buyback limitation is just one device of many that should be employed to do it.

I think this stuff is a rare issue where you’ll see little disagreement between liberals, progressives, moderates, and real conservatives. Our upper management pay structures are perverted, indefensible. I don’t care what your political leaning is — this shit is “soft theft.” In a better world, where our public would be a lot smarter, and the media not intent on dividing people, the tea party and progressives and everyone in the middle would agree on this. That won’t happen. But people like us can agree on this. And I’d say we have an obligation to take an article like Wolf’s and spread it as widely as we can.

I’m doing my part.

[sebastian_dangerfield]

Originally Posted by ThurgreedMarshall

Two different concepts. You got the first.

The second is that we can't possibly succeed in a country in which everyone either works for Walmart or Amazon and can only afford to shop at those two places while each of them uses the safety net we all provide to avoid paying their employees a decent wage or providing healthcare, etc.

TM

Yup. Nick Hanauer was the canary in the coal mine on this years ago: https://www.politico.com/magazine/st...tocrats-108014

But you know this perhaps way better than I do, so I’ll ask, if you’ve ever discussed this issue with finance professionals, what do you hear? Because I hear this really creepy refrain: “Well, inevitably all cultures stratify, sort of like old English class structures.”

Fuck that. I’m a prick and rather live-and-let-die, but I’d rather live under a bridge than in a society that tolerates that thinking. That’s not competition. That’s not libertarianism even. That’s the fixed game Wolf describes. That’s punching down, and punching down should cost you your teeth.

Which is why I could vote for Warren.

[Tyrone Slothrop]

Originally Posted by Icky Thump

Buyback. You give someone money, they give you their equity in your company back.

Dividend. You pay someone for them to maintain their equity in your company

Sure. So? With buy-backs, the people who take the offer opt to take the money and are no longer shareholders. The company no longer has the money, and the remaining shares are worth more individually because there are fewer of them.

When a company is growing, public offerings expand the number of shareholders. If a company doesn't have good prospects, why not decrease the number of shareholders? It beats having the company waste the money on initiatives that management doesn't think will have a good return.

[Tyrone Slothrop]

Originally Posted by sebastian_dangerfield

They do have a good way to invest their cash. But investing in operations and workers pays out over the long haul. Buybacks get management that sweet sweet IBGYBG money now.

If you're right, then buybacks are always a bad idea. But you're not right. Some companies have a lot of cash, and don't see good ways to invest it. How much cash is Apple sitting on? Why would it be wrong for Apple to buy them back?

And in IBM’s case, they were strategically buying back shares owned by management. I guess that’s ok, because it’s public, so if it wasn’t ok, there’d have been issues. But that’s some really brazen self dealing.

OK, we agree that at least some buybacks are a bad idea. It just seems to me that they can be legit too.

[Tyrone Slothrop]

Sebby: Hey, read this! Pitchforks! Inequality!

Also Sebby: Sure, I'll vote for the guy who offers me a tax cut.

[sebastian_dangerfield]

Originally Posted by Tyrone Slothrop

Sebby: Hey, read this! Pitchforks! Inequality!

Also Sebby: Sure, I'll vote for the guy who offers me a tax cut.

I have not and will not vote for Trump.

You’re lost in this conversation. You’re hanging out with too many folks who cite economists to support soft libertarian views polished with a patina of progressivism. Your slip shows increasingly.

It’s okay. I’m lost also. It’s a process. You’ll move through internal inconsistencies. Stop thinking like a lawyer. It makes it easier.

ETA: But even if we disagree on some things, might we agree on this: You can’t punch down. A rigged game is wrong, whether you’re a Randian or a Socialist Democrat. We can disagree on how much we are our brothers’ keepers, but can’t we all agree we have a duty to not rig the game to fuck folks out of a fair chance? And maybe if we have that agreement, in the spirit of small steps leading to leaps, can we discuss ways to avoid this unfairness?

[sebastian_dangerfield]

Originally Posted by Tyrone Slothrop

If you're right, then buybacks are always a bad idea. But you're not right. Some companies have a lot of cash, and don't see good ways to invest it. How much cash is Apple sitting on? Why would it be wrong for Apple to buy them back?



OK, we agree that at least some buybacks are a bad idea. It just seems to me that they can be legit too.

I agree. That’s why I suggested limiting them rather than rolling back to the 70s when they were illegal.