Re: Um...
 

So you miss all the charts and stuff this way but get the basic article.

Re: Um...
 

Thank you. Replaced Texan also pdf'd me the article, so I'm good.

I will say that I have been screaming this tidbit from the article for 12 years now: "In sum, personal financial considerations permeate corporate decision-making. As the independent economist Andrew Smithers argues in Productivity and the Bonus Culture, this comes at the expense of corporate investment and so of long-run productivity growth."

TM

Re: Um...
 

Limit buybacks severely.

Warren, in her policy planks, should just take the last 20 yrs of IBM financials and make it Exhibit A to the suggested bill. “All of the type and character of the buybacks here in this exhibit will be illegal.”

Re: Um...
 

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

Re: Um...
 

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?

Re: Um...
 

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.

Re: Um...
 

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

Re: Um...
 

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.

Re: Um...
 

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.

Re: Um...
 

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

Re: Um...
 

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?

Re: Um...
 

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

Re: Um...
 

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.

Re: Um...
 

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.

Re: Um...
 

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.

Re: Um...
 

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.

Re: Um...
 

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.

Jam yesterday, jam tomorrow, but never jam today.
 

Sebby: Hey, read this! Pitchforks! Inequality!

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

Re: Jam yesterday, jam tomorrow, but never jam today.
 

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?

Re: Um...
 

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

Re: Jam yesterday, jam tomorrow, but never jam today.
 

You’re drinking some of the local kool aid. Harris is a neat meet. But she’s a nobody. Wanna do better, in a realm that matters? (Post politics).

Re: Jam yesterday, jam tomorrow, but never jam today.
 

Emphasis on "if." I don't know what I said that you're referring to. Do you want to have a conversation? Tell me what you think I said that prompts you to call me a soft libertarian. Soft? Are you calling me fat? I generally think libertarians are full of it.

Sebby completely revised the post that this was responding to, in case anyone is confused.

Sure. Agree completely. Can't imagine why you think I disagree.

Re: Jam yesterday, jam tomorrow, but never jam today.
 

You seem to think I'm a Harris fan. I'm not (yet -- maybe she will grow on me). I just thought "corporate" was an odd word to use to describe someone who has been a government employee for her whole working life.

So, sure, I'm happy to do better. I guess. What are you talking about, anyway?

Re: Jam yesterday, jam tomorrow, but never jam today.
 

Franco would have revised it back. Follow your destiny Ty!

Re: Jam yesterday, jam tomorrow, but never jam today.
 

You know how to reach me. As Hank can attest, I use the phone. I really liked that last idea with which you were involved.

Re: Castro
 

I first read this to ba about a cricket colony, a la a swarm of locusts. I was disappointed, but learn how massive the Indian/Pakistani community in Houston has become.

LessinDaNang, Vietnam

Re: Castro
 

I first read this to ba about a cricket colony, a la a swarm of locusts. I was disappointed, but learn how massive the Indian/Pakistani community in Houston has become.

LessinDaNang, Vietnam

Re: Jam yesterday, jam tomorrow, but never jam today.
 

Everybody wants to go to heaven, but nobody wants to die.

Re: Um...
 

It's not as deep as that. When I ask people if they really want to live in the equivalent of the worst of India, with people washing in the streets, outrageously poor and uneducated, while they drive by in a limo with security to their gated towers, they shrug.

It's really just the natural extension of the "I vote with only my wallet in mind" approach to life.

TM

Re: Um...
 

People are naturally myopic and self-important.

I was having a conversation with an investment banker, someone fairly high up at one of the top 2 banks, and they were shocked Democrats didn't seem to worry about "the investment banker vote" and seemed "to just want our money". I asked them what portion of the population they think are investment bankers and they said, half the people I know are, "I don't know what the numbers are but in NY it's a big percentage."

Now, think about the fact that people trust these folks to make investments based on data.

Such a person would never believe the sheer number of people living in poverty in NY because they don't experience it. Sure, a few people have the problem, but they live somewhere else.

Re: Um...
 

Not gonna STP, so maybe already covered, but while I sort of agree, there may be policy reasons to prefer actual dividends to buybacks, including that the dividends are subject to taxation while the unrealized appreciation experienced by the insiders deciding to make the buyback is not.

Re: Um...
 

I see your argument. But what I was describing is, I think, a mindset one or two steps beyond wallet voting. Wallet voters are self interested, yes, but having been one, I can offer this: A lot of the decision to avoid taxes at all costs accrues from recognition of the reality that govt wastes money. One of my biggest annoyances is the defense budget. It infuriates me to see it increased. Tax voters are not all ogres.

I also don’t like paying for things like the NSA to spy on me.

Welfare and ACA taxes don’t bother me. But yes, poorly run programs that spend more on administration than on helping people irritate me.

But putting all of that aside, the finance people I’m talking about are not just avoiding taxes. They are predatory. There’s a belief that we’re moving into a time of scarcity for most, fabulous wealth for a few, and they need to maximize gains ASAP. Bank it for the coming collapse. They also believe they will be protected if the shit hits the fan. And if you tell them their money will not do that, that the Czar and Shah said similar things, they will call you a fool. They’ll remind you that the 1% owns the govt.

These people, many in tech as well, believe the game is rigged so well that it can’t be unrigged. And they get very angry about things like Occupy. When confronted with the fact that it’s a rigged game, they assert that they deserve what they have. I’ve argued Taleb’s randomness theory to people in this strata — that a lot what they have derived from luck. The reply is usually, that’s what losers say.

No, that’s what thoughtful people say. And thoughtful people understand that in a world where the only law is power, Monday’s winner is frequently Tuesday’s corpse. Things turn like a descent into bankruptcy... slowly, slowly, slowly, then all of the sudden rapidly and horribly.

Re: Um...
 

I'm not saying they're all ogres. I'm saying they're all fucking selfish assholes. If you don't push back against the actual government waste instead of using it to coat your unbelievably broad brush you use to say all government is wasteful so I'll just vote my wallet because you just don't like paying taxes, you're full of shit. These people are how we end up with a fucking little shit-rat like Grover Norquist wielding actual fucking power over the entire government.

And picking and choosing which shit you don't like paying for such that you are a wallet-only voter is fucking stupid. There are all sorts of shit I don't want to pay for. But this is a democracy. A society. Sometimes you lose, but in the grand scheme you win. We live in the richest country in the world with the greatest economy. To get to that point, it costs fucking money in the form of investment in ourselves, collectively. Wallet-voters have taken advantage of all that to enrich themselves and now they want to opt out of paying. Fuck them all. Either work to figure out where we can eliminate legitimate waste or shut the fuck up.

You're just describing different levels of selfish assholes. It's all the same shit whether you're talking about these assholes or the parents in whatever suburb who continually fight to have the boundaries of their school districts reduced so that their taxes never pay for a public education for someone who isn't in their income bracket. It's all the same.

TM

Re: Um...
 

The NFL would truly suck if every team finished 8-8.

Re: Um...
 

That's a policy gain in the same way that it would be if the government seized the entire company.

Re: Um...
 

I actually think closing tax loopholes can lead to real world efficiency gains, but even if you do not, changing the incentives of those deciding whether or not to buy back is not merely confiscatory. Who knows what wonderous things they might suddenly discover to invest in if they didn't have the alternative option of using company cash to enhance the value of their holdings.

Re: Um...
 

I'm not sure what point you're trying to make. I hope it's not that some teams do better, which makes the League so much better. Because they play a sport with forced parity, unlike MLB where everyone constantly bitches and moans about the advantage big market teams have.

TM

Re: Um...
 

But you didn't identify a tax loophole. A distribution of cash would be taxed. Appreciation in the stock would be taxed, too, and the sellers of shares of stock bought back pay taxes on their gains.

Re: Um...
 

I would rather live in an egalitarian society, but I think a lot of people like living in a stratified world where some people have more status than others. It's not just an indifference to human suffering. Many people in the limousines would be less happy if everyone had the same limousine. Public conversations about inequality rarely mention this, but it seems to me like the biggest obstacle to living in a more equal society.

I know the phenomenon is not news to you, so I don't mean to sound like I'm telling you something you don't know.

Re: Um...
 

I'm 6' 11".