Corporate profit

[livinincali]

It’s easy to remember the ones that still exist. It’s hard to remember all the ones that failed in the past 50 or 100 years. Some of these excelled over the past 50-100 years. Some are still around but a shadow of their former self. Some are completely gone.

Here’s DOW 30 in 1959

Allied Chemical
Aluminum Company of America
American Can
American Telephone and Telegraph Company
American Tobacco B
Anaconda Copper
Bethlehem Steel
Chrysler
E. I. du Pont de Nemours and Company
Eastman Kodak Company
General Electric Company
General Foods
General Motors Corporation
Goodyear
International Harvester
International Nickel
International Paper Company
Johns-Manville
Owens-Illinois Glass
Procter & Gamble Company
Sears Roebuck & Company
Standard Oil of California
Standard Oil (NJ)
Swift & Company
Texaco Incorporated (formerly Texas Company)
Union Carbide
United Aircraft
U.S. Steel
Westinghouse Electric
Woolworth

DOW 30 from 1928 when it first became and index of 30 names.

Allied Chemical
American Can
American Smelting
American Sugar
American Tobacco B
Atlantic Refining *
Bethlehem Steel *
Chrysler *
General Electric Company
General Motors Corporation
General Railway Signal *
Goodrich *
International Harvester
International Nickel *
Mack Truck
Nash Motors *
North American *
Paramount Publix (formerly Paramount Famous Lasky)
Postum Incorporated *
Radio Corporation *
Sears Roebuck & Company
Standard Oil (NJ) *
Texas Company
Texas Gulf Sulphur *
Union Carbide *
U.S. Steel
Victor Talking Machine *
Westinghouse Electric *
Woolworth
Wright Aeronautical *

[Anonymous]

I’m not sure what point you are trying to make.

[CA renter]

[quote=livinincali][quote=CA renter]
This is a huge pet peeve of mine. Lost in the capitalist propaganda of “risk and rewards” is the fact that most rich people take very few personal risks. More privatization of the profits and socialization of the losses…and it will always be this way until people start to wake up (which is finally starting to happen, but it’s a very slow process).[/quote]

It totally depends on how you got rich. The innovators of the world Jobs, Gates, etc probably deserve to have gotten rich. They all took significant risks. The problem is that eventually these people move on from their companies and you end up with Wharton grads running them. Most of these Grads don’t have the innovative skills of those they replaced so they start thinking in the short term and what’s good for the share price. Eventually most of them tend to run the company into the ground, but in the process they get rich. How many companies are still around from 50 years ago, 100 years ago? Not many.

Essentially you want to somehow prevent the well connected from going to Wharton and get the C-Level job because they don’t deserve to be rich in your mind. I don’t see how you can actually accomplish this though.[/quote]

Correct. This is why I’ve always differentiated between founding CEOs and “professional” CEOs (and other executive positions).

But it’s not just a matter of corporate management. The financial industry is one of the biggest problems in this country, IMO. They set themselves up to skim a portion of almost every legitimate transaction out there, yet they do very little to benefit society or the economy. We could easily set up a public bank that could facilitate transactions and even make loans to people and businesses for a fraction of the cost.

“According to the latest data from the Commerce Department, the financial sector now accounts for 8.4 percent of the United States’ Gross Domestic Product, “eclipsing the peak it hit in 2006.” In the 1950s, the financial sector accounted for less than 3 percent of GDP. Meanwhile, financial firms are once again making more than 30 percent of all corporate profits in the U.S.”

http://thinkprogress.org/economy/2011/12/14/389487/financial-sector-gdp-recession/

and this…

http://tcf.org/blog/detail/graph-how-the-financial-sector-consumed-americas-economic-growth

[FlyerInHi]

In a real meritocracy you wouldn’t have inheritances. People would have to work their way up.

[Anonymous]

[quote=CA renter]This is why I’ve always differentiated between founding CEOs and “professional” CEOs (and other executive positions).[/quote]

Investors also differentiate between founding CEOs and their successors.

The founding CEOs typically own a much, much bigger share of the company.

[quote]They set themselves up to skim a portion of almost every legitimate transaction out there, yet they do very little to benefit society or the economy.[/quote]

Really, they just “set themselves up?” Like kids with a corner lemonade stand. Just set it up and start skimming!

So why does anybody give them money in the first place?

What is the measure of “benefit to society” – are you the final judge on that metric?

[quote]We could easily set up a public bank that could facilitate transactions and even make loans to people and businesses for a fraction of the cost.[/quote]

Yes! And why stop there? We could easily set up a public car manufacturer, or a computer design company – and everything else in our economy also. Everything would be a fraction of the cost!

It’s already been figured out for us – we would just have to borrow the instruction manual from North Korea.

[spdrun]

… or France. Or Germany. Or any number of countries where certain companies are publicly owned.

[Coronita]

[quote=CA renter]

Correct. This is why I’ve always differentiated between founding CEOs and “professional” CEOs (and other executive positions).

But it’s not just a matter of corporate management. The financial industry is one of the biggest problems in this country, IMO. They set themselves up to skim a portion of almost every legitimate transaction out there, yet they do very little to benefit society or the economy. We could easily set up a public bank that could facilitate transactions and even make loans to people and businesses for a fraction of the cost.
[/quote]

[quote=spdrun]… or France. Or Germany. Or any number of countries where certain companies are publicly owned.[/quote]

..Or why not go fully monty and just say all rental properties should be publicly owned? Afterall, how dare us pigglords use on our capital and good credit scores to buy rental property, to provide housing for people that need/want rental in exchange for something called “profit” so we don’t have to work in the future when we’re too old to work and count on government provided benefits completely

…There should be no profit at all in the rental business for things such as providing bare necessities like shelter for the greater good of people, so that we can keep rent prices to the absolutely bare minimum and avoid “skimming” profits from rentals…

… But we don’t need to wait for government action before that goodness is done…We can do it right now together… Even though we might be several hundreds/month cash flow positive and very profitable, let’s think about the greater good of people and just stop doing that and offer rentals with rent prices really low at $0 profit…

Come on guys….Who’s with me?????

[Coronita]

.

[FlyerInHi]

Theoretically, if there’s no friction, companies can be owned by the government and operate very efficiently.

Problem is that political interference creates a lot of friction and inefficiency. Take companies in France. Renault and big banks used to be owned by the government. Executives didn’t make the huge salaries of the USA but, still, they took huge risks that required periodic taxpayer bailouts.

France and Germany are bad examples because they lag in economic growth. Germany has reformed, privatized the post office, and now they are growing faster. France has also privatized many companies in an attempt to spur economic growth.

On the other hand, a success story would be housing in Singapore. The Housing Board built housing for the population, then sold them. Singaporeans enjoy some of the best housing in Asia, at low cost. They also now have one of the highest per capita GDP in the world, about $60k now.
https://www.google.com/#q=singapore+gdp

A dirigiste economy can work very well. It just depends how it’s managed.

China is good example. They have achieved remarkable economic growth in the last 30 years. Many of their top government managers are technocrats with PhDs.

[Coronita]

[quote=FlyerInHi]
China is good example. They have achieved remarkable economic growth in the last 30 years. Many of their top government managers are technocrats with PhDs.[/quote]

Well it’s easy to manage growth if you have absolute power telling the majority of other people what they have to do…provided the folks holding onto absolute power have their head screwed on the right direction.

For example, if you need to build a high speed rail system, it’s easier if you have absolute power to do whatever you want… You can simply tell people that live on the land where you want to construct a high speed rail to move, not compensate them well for it, not worry about the environmentalists, and finish it really quickly without much pushback from anyone else that might cause objections…

[CA renter]

[quote=flu][quote=CA renter]

Correct. This is why I’ve always differentiated between founding CEOs and “professional” CEOs (and other executive positions).

But it’s not just a matter of corporate management. The financial industry is one of the biggest problems in this country, IMO. They set themselves up to skim a portion of almost every legitimate transaction out there, yet they do very little to benefit society or the economy. We could easily set up a public bank that could facilitate transactions and even make loans to people and businesses for a fraction of the cost.
[/quote]

[quote=spdrun]… or France. Or Germany. Or any number of countries where certain companies are publicly owned.[/quote]

..Or why not go fully monty and just say all rental properties should be publicly owned? Afterall, how dare us pigglords use on our capital and good credit scores to buy rental property, to provide housing for people that need/want rental in exchange for something called “profit” so we don’t have to work in the future when we’re too old to work and count on government provided benefits completely

…There should be no profit at all in the rental business for things such as providing bare necessities like shelter for the greater good of people, so that we can keep rent prices to the absolutely bare minimum and avoid “skimming” profits from rentals…

… But we don’t need to wait for government action before that goodness is done…We can do it right now together… Even though we might be several hundreds/month cash flow positive and very profitable, let’s think about the greater good of people and just stop doing that and offer rentals with rent prices really low at $0 profit…

Come on guys….Who’s with me?????[/quote]

You know how I feel about this. Housing/shelter is a basic necessity and, in my opinion, should not be subject to speculation. Personally, I have a problem with speculation where “investors” simply buy something that *already exists* in the hopes of extracting rent or selling it for a profit in the future — whether housing/land, agricultural commodities, industrial metals and other raw materials needed for production, etc. Some would argue that this makes a market more efficient, but it doesn’t. Speculators will enter and leave markets at exactly the wrong times — driving up prices in anticipation of shortages and/or unusually high organic demand, and selling in anticipation of supply gluts and/or unusually low demand. They cause greater volatility, and make the bubbles, booms and busts more pronounced; they do far more damage than good in most markets.

Of course, if you BUILD rental units and rent them out for a profit, I don’t have a problem with that, assuming that the land used for the units isn’t needed by others who would like to own their own homes, instead. As it works now, speculators/landlords are competing with people who are simply looking for a home of their own and they are driving prices well above where they should be. I most definitely have a problem with this.

[CA renter]

[quote=spdrun]… or France. Or Germany. Or any number of countries where certain companies are publicly owned.[/quote]

Exactly, spdrun. Some people are clueless when it comes to the differences between economic systems, and they regularly confuse socialism with dictatorial communism. There are HUGE differences between the two.

[moneymaker]

In one of Obama’s speeches the other day, he said he was amazed at how the Chinese government could build something (anything really) so fast. I’m not sure if they have red tape like we do, but somewhere they probably have committees that meet to decide such things as well. You could just sense how envious the President was that the Chinese could make a decision and have whatever it was built in a year or less.
“It’s a wondeful life” is on NBC right now, one of my favorite movies.

[Anonymous]

[quote=spdrun]… or France. Or Germany. Or any number of countries where certain companies are publicly owned.[/quote]

There are some “certain companies” in Europe that are publicly owned…

So let’s nationalize the entire American banking system!

[Coronita]

[quote=moneymaker]In one of Obama’s speeches the other day, he said he was amazed at how the Chinese government could build something (anything really) so fast. I’m not sure if they have red tape like we do, but somewhere they probably have committees that meet to decide such things as well. You could just sense how envious the President was that the Chinese could make a decision and have whatever it was built in a year or less.
“It’s a wondeful life” is on NBC right now, one of my favorite movies.[/quote]

No problem. A few more executive orders here and there, for many things I’m sure he can almost get the same result 🙂

The secret sauce for why the chinese have been able to advance so quickly is simple…(1) Deny the majority of the dumb people in the country the opportunity to have a say in the decision making process of anything (2) Invest heavily in well educated tech people and import experts from all over the world so they can learn from them (3) Dump a bunch of money into businesses and relax regulation to the point of almost “anything goes”

You really think they build they high speed bullet train all by themselves? Nope. They brought in the experts from europe…And now, they know how to build high speed rails…. Same could be said for other tech…

Democracy is the fairest system in the world. However, it’s not the most efficient system…

[Author]

Posts