Dragonlady
Designing Woman
- Dec 1, 2012
- 53,128
- 31,149
The stock market is going ever higher in anticipation of a large corporate tax cut and the dividends and merger frenzy to follow. This isn't growth.
It is estimated that 90% of stock market holdings are the property of the top 10% earners in our country.. Folks in WV and KY who "rejoice" that the stock market is going up under Trump's tenure, exemplify how truly DUMB many voters are.
The value of the stock market is, in many ways, a false indicator of the fiscal health of the nation. It rewards high profits above all else, rewarding companies which cut workers wages and other bad behaviour.
Back in the 1970's an economist groused that the Harvard Business School model of bottom line management would be the death of the American economy. That putting profit above all else was rewarding companies for breaking up and selling off assets which destroyed jobs but gave the bottom line a big jump.
At the time I thought this guy deranged. After all, wasn't it right and proper that companies were more profitable? It turns out, he was right.
The pursuit of higher profits lead Walmart to structure the staff around welfare handouts intended for the poor. Walmart padded profits with massive wage subsidies of food stamps, Medicaid, and other government programs totalling $9 billion, and Walmart became the second most profitable company in America. The thing is that Walmart could have given all of their employees raises so that they no longer qualified for government assistance, and they would still have been a highly profitable company, just not #2 in America.
This is a lot like "teaching for the test". When governments started standardized testing of students and publishing results, school stopped providing well rounded education and began teaching students the things they would need to get good test results. Education has gone downhill ever since.
Corporations need to be profitable to survive. Companies which lose money don't last long. But padding profits at the expense of workers so that you boost the stock price, is a fool's game. It's picking up the peanuts while Being trampled by the elephants.
Corporate executives are so insulated from their front line workers, it's painful to watch.
Every time I watch the show "Under Cover Boss", you see some CEO go to work in entry level jobs within his company, and he or she sees decent, hard working people struggling to do right by their job, their families, and their communities. Invariably, the gift these deserving workers with free tuition, or a new car or some other expensive item which the employees can't afford on their current wages.
Wouldn't it be better for these CEOs to give all their deserving employees raises so that they can afford these things without appearing on a reality TV show?