After Taibbi's work at Rolling Stone, I personally am stunned that I'm reading him, and Jeff, I wonder if you are stunned you're reading him, too. Strange times make for strange bedfellows. (Though Taibbi is a great writer, has a slashing wit, and calls out idiocy when he sees it.)
However, I too thought his article's focus on stock buybacks made little sense in relation to the hollowing out of the middle class (and let's be frank, we're talking about the hollowing out of lower middle management and skilled industrial - not trade - workers). Offshoring makes more logical sense as the key factor.
Not sure if your UofC profs mentioned this as another reason for stock buybacks: to get excess cash out of the hands of management, who otherwise would be tempted to make poor investments/acquisitions/"empire build." Forgot who taught me that at GSB (dating myself with that), but it was the sort of cynically realistic viewpoint of agency issues that make a lot of sense.
As a happy Apple shareholder for several years, I'm willing to forgive them for that one. Plus, a 2022 Bloomberg estimated they've spent over $550 billion buying back stock over a ten year period.
I just thought of one person who didn't piddle away a pile of cash - Warren Buffett has done quite well with acquisitions, especially in 2008 when he rode to the rescue of Goldman Sachs (and profited handsomely).
Kind of funny that they complain about CEO salaries but not a peep when it comes to athletes and hollywood salaries. Be interesting to see what effect Mary Barra's salary has on the cost of a vehicle that you will own for a number of years. Then compare that to the cost of a night out at the movies or a sporting event and see how the salaries of the athlete or actress affect the cost of that.
I have never understood the American dynamic where we berate CEO's for some of the highest stress jobs in the country, but then actively applaud an athlete making $30 million a year or an entertainer making $100 million a year.
I also don't understand why someone would care. If you don't own the company or a part of it, what is it to you? "Well, it's not fair to workers." Huh? When someone says this I know they are an economic illiterate. Markets determine these wages, and if I had a $100 billion company, I sure as hell don't want some Joe Schmo running it. If I have to fork over $10 million to preserve my $100 billion you can bet your ass I'm doing it. This is not an area I'm going to take risks. And the fact that every OTHER huge company is thinking the same thing is exactly why these pay packages are so high.
But for some reason the average Joe doesn't get this. I never understood it, as I've had this debate with numerous good friends. And they always say--because I'm a small business owner--that they don't mean "me" but "those other guys in the Fortune 500. Why? What's the difference? Those guys give up their entire lives for the company, and most of them miss the best moments of their family's lives. They also die young from stress and illness. It's a huge tradeoff.
Hypothesis: this may be due to the fact that most people know they can't play football like a top NFL player..maybe can't even put in a top-notch acting performance...but they don't really understand what CEOs and other executives do and imagine that it can't be too hard.
But I'll keep it simple on Re: stock buybacks. I never understood the Democrat obsession with these things. I simply don't understand why they hate them so. There must be a paper or a book somewhere with someone berating them, but as an economics person I don't get it.
You pointed out the corporate supply side of buybacks, but let's not forget about where the money goes. It goes to investors, who have a number of choices of what to do with it. One, they will invest in another stock or company, thus raising the stock value for others and providing more capital to another company that actually needs it, which is better for the economy. Two, they will cash out and spend the money, thus providing service or manufacturing jobs, thus helping the economy.
In either case, the money is put to use (better use) and just about everyone is better off. In economic terms, it increases velocity, lowers the cost of capital, and helps out everyone on the income spectrum.
So I just don't get where the hatred for it comes from. Am I missing something in their argument?
Is it just wealth envy, like everything else with these people?
I don't have a problem with buybacks in a general sense, but I have two issues with them.
First, if the buybacks aren't larger than options awarded as compensation they aren't really helping shareholders. Consider simplified hypothetical that isn't necessarily represenative and isn't intended to be. If a CEO is awarded 10k shares as part of a compensation package, and then proceeds to have the company buy back 10k shares, I as a shareholder, have not benefited even slightly from the buyback - the number of shares outstanding has not changed.
So in this case, I don't have a problem with buybacks generally. I have a problem with principal agent issues. But that underlying principal/agent issue shouldn't be neglected when talking about buybacks.
The other issue I have with buybacks is also not really about buybacks, it's about the distortion tax system. I think it is absolutely ridiculous that returning value to shareholders is taxed differently when it's done via buybacks instead of dividends. Not only is it taxed at a lower rate, but it can be deferred until realization.
Again that isn't a problem with buybacks, it's a problem with the distortions in the tax code. But again, this distortion also shouldn't be ignored when discussing buybacks. If the tax code was non-distortionary, I wouldn't have the problem.
On the exec comp piece, this is a separate decision that is already a liability on the balance sheet, so it should theoretically have no bearing on the value of the stock (it's already embedded within the balance sheet), and a buyback is an independent action that doesn't change the value proposition for the options granted to executives. Also, shareholders do benefit, because if the options become worth money, then the shares have gone higher and the shareholders benefit. If they are out of the money, then the comp is no longer a liability. To me, it would seem that these price movements would be independent of movements related to a buyback. Obviously, I'm taking an academic approach to this, as I don't know what empirically happens or if the market is separating these events.
And, to be technical, the CEO doesn't order the buyback, the BOD does. A good BOD should have already analyzed the impact of the buyback on the cost of its options structures for execs. If the Board still determines that this will help shareholders then they make that decision in good faith, not the CEO. Again, this is academic, and perhaps cronyism in the board room prevails. But theoretically this conflict should not exist.
You answered your own objection on the tax issues, which strikes me as just rational behavior. Of course, everyone pursues policies that lower tax liabilities. This is a governmental policy issue, not a corporate issue.
I understand what you're saying regarding taking an academic approach. I had to do the same. "I know it's more complicated than this very simple example, I acknowledge that, I just don't want to spend pages covering all the details, here is the broad point". Brevity is worth a little imprecision most of the time.
The government has to be the one to fix the distortions in the tax code but I don't think they need to get involved in the principal/agent problem I mention in the first point. My first point is addressed more to shareholders, than to legislators and regulators.
I'm willing to ignore the cronyism for the purpose of discussion, I think we both know it is significant in real life though. But all the same, if we assume that the BOD is the one who orders the buyback then why do we reward the executives for the resulting price increase?
The argument is going to be along the lines of "it was only possible because the executives increased the EBITDA" or something along those lines.
But if the BOD had issued a dividend instead, the price would have gone up some but probably not as much, and thus compensation would be lower, but for no good economic reason.
Like I said, I don't have a problem with buybacks in an abstract sense, I have a problem with the way they interact with all the other elements in the market.
The first problem could be fixed by changing the way options are awarded _OR_ by changing the way buybacks are handled - or by a combination of changes to both.
Completely in isolation I have no issues with them at all, it's only when you add back in all the other pieces that I have concerns.
Thanks for the comment. You are the only person that has ever answered my question of "what is wrong with buybacks" in a number of forums.
As for the problem of exec comp, I see that as fixable. Like you said, change the comp formula in such a way that buybacks are a net even for comp purposes. It would be in the fine print, I suppose.
Gonna say the CFO decides about the buyback, runs it by the CEO and then at the board meeting they run it by the board.
Buffett is correct on buybacks. There are stupid ones when you are paying way above market for your stock. As we know, hard to know what is "market". Buffett has his own way of analyzing it and he's basically been correct over the years.
Blame the Upper Middle Class! One big reason that the middle class has shrunk is the relative shift towards upper income brackets. All the bankers, lawyers, consultants who want to cement their place in the hierarchy. The most powerful crony and NIMBY class!
On exec comp, you are completely correct in theory. But it doesn't take a lot of exposure to see that there are a lot of clueless people who make a lot of money. The Peter Principle does not work fast enough. It's an another effect of the growth of the upper middle class. And don't forget, the shift towards stock compensation only began as a populist law passed under Clinton to cap executive cash salaries. American business still rocked when CEOs pay was mostly cash.
Finally, I've seen it written, but don't have the article or data. One outlet for smart people who didn't fit into the corporate world was the ability to start/run a small business. As the economy has grown and become more efficient (all good), those opportunities have been reduced as small businesses have gotten bought up by larger ones.
It doesn't matter if we think they are clueless or not. They have boards and shareholders to determine that.
Agree there is lots of NIMBY and cronyism. Every class has some, but the government cronies are the worst. What do we call the Wall St revolving door to K Street crowd?
Brandon Johnson is dumb. Commercial real estate people will tell you converting those buildings to residential is super expensive. Floor plates are designed for office, not the plumbing and services residential need.
Who do comp committees rely on? Comp consultants. What incentives do comp consultants face? It's all very self-referential. BODs are risk averse, very much like the 20th century idea of "you don't get fired for buying IBM".
"That's why the pro-life movement keeps shifting their demands. They need something to oppose in order to raise money and keep their grift alive."
Where the hell is all the money in the pro-life movement?!? How is ending the killing of innocent human beings a grift? Shifting demands? Stop killing humans in the womb! That's what the same thing they have been saying since before I was alive.
A fetus only becomes a human in the second trimester? That's absolute rubbish. Look at this video of a healthy nine week fetus, and you tell me what you think you are seeing:
There are plenty of non-profits set up to advocate for the pro-life movement. Many non-profits become cash cows for the people who lead them, no matter how great their cause is. I am pro-life but I am realistic that the movement is led by humans not angels.
I am unwilling to fight a Civil War over abortion. I am willing to fight a longer term educational war.
Overturning Roe v Wade was the right legal decision. A "free market" in abortion for the 50 states exists. Free markets are messy. They take time to sort things out and in this case, Trump is correct. Let the states decide. Alabama's going to sort out IVF but because of Roe v Wade there is a lot of crappy law on the books that need to be overturned or amended. Arizona is another example. In fact, AZ might be a case where RINO Republicans who don't want to see Trump win initiated the legal warfare to keep Trump out.
I think it is fair to be objective when you look at your own beliefs and the leaders that advocate for them.
Trump is not correct. Federalism works when you are talking about things like education or healthcare policy.
Federalism doesn't work when the state governments advocate evil violations of human rights. Elective human abortion is no more accetable in any of the states than lynching is.
The 14th Amendment clearly establishes a right to life that the states cannont violate without the due process of law. The amendment explictly enables the Federal Government to step in when a state starts refusing to protect the rights of individuals. There is no more a right to abortion in a state than there is a right to lynching.
I am horrified, though not suprised, to see "conservatives" and "Christians" start advocating legal killing of unborn human beings to garner votes. It is a unprincipled cowardice.
What happens in human development in the womb is no longer a mystery. The life and humanity of an embryo or fetus in the womb is undeniable. Why don't we articulate it, instead of retreating?
I miss-wrote. I’m not actually saying there’s not money in it. I’m saying it’s not really fair to call it a grift. If there are people in the pro-life movement that make a living from jt that aren’t true believers in the cause, I’ve never heard of them. But the dishonesty of people can be surprising sometimes. Probably there’s a few grifters out there. Kind of a weird cause to grift off though. I think of grifting usually in the context of political campaigns, where a lot of con artists make money telling candidates and media what their itching ears want to hear, even as they don’t believe a word of it. Beats working!
It's unfortunate, but I have lost a lot of faith in many charitable organizations. Many of them are fronts for highly paid "executives" who use the mission as a means to make just as much or more than they would at a profit company, but use the good nature of the people who support the cause for their perks and income.
At least 90-95% of charities are a grift. As a Christian, I include churches in that. I’ve personally been involved in a few good ones with transparent finances that are solid.
Always check the form 990 online at the IRS or guidestar. Check what the execs are making and what the top five paid positions are making and then the consultants. Then decide if you want to contribute.
I think it's wrong to assume that all buybacks follow the textbook formula you cite. You assume that all the corporate leaders are acting in good faith. I doubt that. One of Leopold's points that you haven't addressed is his accusation that the money for the buybacks is often extracted from the labor force in the form of cost cutting, layoffs, reductions in benefits, cuts to r&d, offshoring for cheap labor. While workers lose jobs, executives paid partially with stock make more. Boeing was buying back a lot of stock until covid and we're just figuring out where some of the profit for the buyback came from, and why the doors fall off and the engine housings disappear mid flight. Taibbi notes that buybacks were barred as manipulation until 1982. Maybe that was a good thing.
Here is my argument there: I can make widgets more efficiently(better software, robots etc) I can cut back on my workforce. My company becomes more profitable, and that's better for shareholders. What should I do with excess cash?
R+D expenditures often are cut back because it's too expensive to do internally. Some companies have a culture of buying innovation. Cut back on R+D, track it to buyouts of companies to see if there is a correlation.
Offshoring has more to do with US Labor and regulatory policy than anything else along with the kinds of goods which are being offshored. For example, China and Vietnam do a lot of commodity manufacturing where more difficult value add manufacturing is done in the US.
I don't think stock buybacks at Boeing are related to quality control in manufacturing. That's a reach.
Sorry, but this is a Leftist/Marxist argument. No corporation owes anyone a job. It also can pay any rate it wants. Yes, it makes sense for companies to pay a leading wage, but that may not be the company's strategy. The market will sort it out to see who wins.
A stock buyback after initiating cost savings is another independent event. And even if it was related, it is the company's prerogative to do what it wants. It is the ownership's money (the shareholders) not the employees'.
I don't know when in America we got this idea that companies were communal property that existed to serve "labor forces." It's a romantic notion, but it doesn't exist. It's fundamentally a false characterization of how our economy works.
The denial that racism is multidirectional is becoming an integral factor in the beginning process of self cleansing of universities, corporations and cities.(See recent DEI eliminations).
At the risk of sounding Shakespearean, my solution, which admittedly will never come to fruition, is to disallow any attorneys to run for elected public office in alternate elections for a couple decades. They are notoriously poor managers of money, second only to doctors, and generally mediocre in people management skills. From the beginning of their first job out of Law School until somewhere between their 5th and 10th year of their careers, their primary purpose is to increase billable hours and do research, at least until one or both sides run out of money and then they have become solution oriented very quickly. They are a big part of the problem. If we just have the Democrats elect Junior High and High School principals who've learned how to do more with less, and the Republicans elect Big Business Leaders, we will see a tremendous jump in the overall quality of life in this country, probably two decades' worth of improvement in a half decade's time. There will still be no shortage of attorneys to draft legislation and write policy and procedures, which is what they are good at doing. I am quite certain my suggestion appeals to all non attorneys in this country 🤨😄
After Taibbi's work at Rolling Stone, I personally am stunned that I'm reading him, and Jeff, I wonder if you are stunned you're reading him, too. Strange times make for strange bedfellows. (Though Taibbi is a great writer, has a slashing wit, and calls out idiocy when he sees it.)
However, I too thought his article's focus on stock buybacks made little sense in relation to the hollowing out of the middle class (and let's be frank, we're talking about the hollowing out of lower middle management and skilled industrial - not trade - workers). Offshoring makes more logical sense as the key factor.
Not sure if your UofC profs mentioned this as another reason for stock buybacks: to get excess cash out of the hands of management, who otherwise would be tempted to make poor investments/acquisitions/"empire build." Forgot who taught me that at GSB (dating myself with that), but it was the sort of cynically realistic viewpoint of agency issues that make a lot of sense.
I forgot about the "get it out of mgmt's hands" bit. That is very true, as well.
How much cash does Apple have? What did they just do with their autonomous car project?
As a happy Apple shareholder for several years, I'm willing to forgive them for that one. Plus, a 2022 Bloomberg estimated they've spent over $550 billion buying back stock over a ten year period.
I just thought of one person who didn't piddle away a pile of cash - Warren Buffett has done quite well with acquisitions, especially in 2008 when he rode to the rescue of Goldman Sachs (and profited handsomely).
YES---->I forgot that one. Thank you for mentioning it. Apple is the largest hedge fund in the world.
Kind of funny that they complain about CEO salaries but not a peep when it comes to athletes and hollywood salaries. Be interesting to see what effect Mary Barra's salary has on the cost of a vehicle that you will own for a number of years. Then compare that to the cost of a night out at the movies or a sporting event and see how the salaries of the athlete or actress affect the cost of that.
Or union heads
It's hard to believe what they pay themselves, on behalf of their members, of course. Check the LM2 for your favorite union sometime. It's incredible.
I have never understood the American dynamic where we berate CEO's for some of the highest stress jobs in the country, but then actively applaud an athlete making $30 million a year or an entertainer making $100 million a year.
I also don't understand why someone would care. If you don't own the company or a part of it, what is it to you? "Well, it's not fair to workers." Huh? When someone says this I know they are an economic illiterate. Markets determine these wages, and if I had a $100 billion company, I sure as hell don't want some Joe Schmo running it. If I have to fork over $10 million to preserve my $100 billion you can bet your ass I'm doing it. This is not an area I'm going to take risks. And the fact that every OTHER huge company is thinking the same thing is exactly why these pay packages are so high.
But for some reason the average Joe doesn't get this. I never understood it, as I've had this debate with numerous good friends. And they always say--because I'm a small business owner--that they don't mean "me" but "those other guys in the Fortune 500. Why? What's the difference? Those guys give up their entire lives for the company, and most of them miss the best moments of their family's lives. They also die young from stress and illness. It's a huge tradeoff.
Hypothesis: this may be due to the fact that most people know they can't play football like a top NFL player..maybe can't even put in a top-notch acting performance...but they don't really understand what CEOs and other executives do and imagine that it can't be too hard.
Whew. There's a lot here in this one!
But I'll keep it simple on Re: stock buybacks. I never understood the Democrat obsession with these things. I simply don't understand why they hate them so. There must be a paper or a book somewhere with someone berating them, but as an economics person I don't get it.
You pointed out the corporate supply side of buybacks, but let's not forget about where the money goes. It goes to investors, who have a number of choices of what to do with it. One, they will invest in another stock or company, thus raising the stock value for others and providing more capital to another company that actually needs it, which is better for the economy. Two, they will cash out and spend the money, thus providing service or manufacturing jobs, thus helping the economy.
In either case, the money is put to use (better use) and just about everyone is better off. In economic terms, it increases velocity, lowers the cost of capital, and helps out everyone on the income spectrum.
So I just don't get where the hatred for it comes from. Am I missing something in their argument?
Is it just wealth envy, like everything else with these people?
I don't have a problem with buybacks in a general sense, but I have two issues with them.
First, if the buybacks aren't larger than options awarded as compensation they aren't really helping shareholders. Consider simplified hypothetical that isn't necessarily represenative and isn't intended to be. If a CEO is awarded 10k shares as part of a compensation package, and then proceeds to have the company buy back 10k shares, I as a shareholder, have not benefited even slightly from the buyback - the number of shares outstanding has not changed.
So in this case, I don't have a problem with buybacks generally. I have a problem with principal agent issues. But that underlying principal/agent issue shouldn't be neglected when talking about buybacks.
The other issue I have with buybacks is also not really about buybacks, it's about the distortion tax system. I think it is absolutely ridiculous that returning value to shareholders is taxed differently when it's done via buybacks instead of dividends. Not only is it taxed at a lower rate, but it can be deferred until realization.
Again that isn't a problem with buybacks, it's a problem with the distortions in the tax code. But again, this distortion also shouldn't be ignored when discussing buybacks. If the tax code was non-distortionary, I wouldn't have the problem.
my only problem with them is that I'd rather see dividends because in principle, the buyback decision is more centralized.
Your point on options is well taken, and often buybacks merely let management cover their options.
I hear your point, but I look at it differently.
On the exec comp piece, this is a separate decision that is already a liability on the balance sheet, so it should theoretically have no bearing on the value of the stock (it's already embedded within the balance sheet), and a buyback is an independent action that doesn't change the value proposition for the options granted to executives. Also, shareholders do benefit, because if the options become worth money, then the shares have gone higher and the shareholders benefit. If they are out of the money, then the comp is no longer a liability. To me, it would seem that these price movements would be independent of movements related to a buyback. Obviously, I'm taking an academic approach to this, as I don't know what empirically happens or if the market is separating these events.
And, to be technical, the CEO doesn't order the buyback, the BOD does. A good BOD should have already analyzed the impact of the buyback on the cost of its options structures for execs. If the Board still determines that this will help shareholders then they make that decision in good faith, not the CEO. Again, this is academic, and perhaps cronyism in the board room prevails. But theoretically this conflict should not exist.
You answered your own objection on the tax issues, which strikes me as just rational behavior. Of course, everyone pursues policies that lower tax liabilities. This is a governmental policy issue, not a corporate issue.
I appreciate the debate.
I understand what you're saying regarding taking an academic approach. I had to do the same. "I know it's more complicated than this very simple example, I acknowledge that, I just don't want to spend pages covering all the details, here is the broad point". Brevity is worth a little imprecision most of the time.
The government has to be the one to fix the distortions in the tax code but I don't think they need to get involved in the principal/agent problem I mention in the first point. My first point is addressed more to shareholders, than to legislators and regulators.
I'm willing to ignore the cronyism for the purpose of discussion, I think we both know it is significant in real life though. But all the same, if we assume that the BOD is the one who orders the buyback then why do we reward the executives for the resulting price increase?
The argument is going to be along the lines of "it was only possible because the executives increased the EBITDA" or something along those lines.
But if the BOD had issued a dividend instead, the price would have gone up some but probably not as much, and thus compensation would be lower, but for no good economic reason.
Like I said, I don't have a problem with buybacks in an abstract sense, I have a problem with the way they interact with all the other elements in the market.
The first problem could be fixed by changing the way options are awarded _OR_ by changing the way buybacks are handled - or by a combination of changes to both.
Completely in isolation I have no issues with them at all, it's only when you add back in all the other pieces that I have concerns.
Thanks for the comment. You are the only person that has ever answered my question of "what is wrong with buybacks" in a number of forums.
As for the problem of exec comp, I see that as fixable. Like you said, change the comp formula in such a way that buybacks are a net even for comp purposes. It would be in the fine print, I suppose.
Gonna say the CFO decides about the buyback, runs it by the CEO and then at the board meeting they run it by the board.
Buffett is correct on buybacks. There are stupid ones when you are paying way above market for your stock. As we know, hard to know what is "market". Buffett has his own way of analyzing it and he's basically been correct over the years.
Blame the Upper Middle Class! One big reason that the middle class has shrunk is the relative shift towards upper income brackets. All the bankers, lawyers, consultants who want to cement their place in the hierarchy. The most powerful crony and NIMBY class!
On exec comp, you are completely correct in theory. But it doesn't take a lot of exposure to see that there are a lot of clueless people who make a lot of money. The Peter Principle does not work fast enough. It's an another effect of the growth of the upper middle class. And don't forget, the shift towards stock compensation only began as a populist law passed under Clinton to cap executive cash salaries. American business still rocked when CEOs pay was mostly cash.
I've posted this before, but David Brooks makes some of your same points! The administrative state sucks. Even Brandon Johnson agrees that property development is too slow. https://www.nytimes.com/2024/01/18/opinion/american-life-bureaucracy.html
Finally, I've seen it written, but don't have the article or data. One outlet for smart people who didn't fit into the corporate world was the ability to start/run a small business. As the economy has grown and become more efficient (all good), those opportunities have been reduced as small businesses have gotten bought up by larger ones.
It doesn't matter if we think they are clueless or not. They have boards and shareholders to determine that.
Agree there is lots of NIMBY and cronyism. Every class has some, but the government cronies are the worst. What do we call the Wall St revolving door to K Street crowd?
Brandon Johnson is dumb. Commercial real estate people will tell you converting those buildings to residential is super expensive. Floor plates are designed for office, not the plumbing and services residential need.
Who do comp committees rely on? Comp consultants. What incentives do comp consultants face? It's all very self-referential. BODs are risk averse, very much like the 20th century idea of "you don't get fired for buying IBM".
I think the commercial to residential ideas are meh for the reasons you state. My reference was to his new "cut the tape" initiative, which really is a good thing and should be recognized as such, even if you believe he is an idiot. https://www.chicagobusiness.com/commercial-real-estate/brandon-johnson-unveils-plan-cut-red-tape-real-estate-developers
That's true. The consulting class!!!! I have heard nightmares about them. At CME we hired McKinsey. They actually nailed it for us. Surprising.
George Santos gave money to the Biden campaign and works as a lobbyist? That doesn’t sound right.
"That's why the pro-life movement keeps shifting their demands. They need something to oppose in order to raise money and keep their grift alive."
Where the hell is all the money in the pro-life movement?!? How is ending the killing of innocent human beings a grift? Shifting demands? Stop killing humans in the womb! That's what the same thing they have been saying since before I was alive.
A fetus only becomes a human in the second trimester? That's absolute rubbish. Look at this video of a healthy nine week fetus, and you tell me what you think you are seeing:
https://www.youtube.com/watch?v=5q30ao8phNY
There are plenty of non-profits set up to advocate for the pro-life movement. Many non-profits become cash cows for the people who lead them, no matter how great their cause is. I am pro-life but I am realistic that the movement is led by humans not angels.
I am unwilling to fight a Civil War over abortion. I am willing to fight a longer term educational war.
When it comes to pro-life, here is what I wrote on Dan Proft's LInkedIN today: https://www.linkedin.com/feed/update/urn:li:activity:7184565821510160386/?commentUrn=urn%3Ali%3Acomment%3A(activity%3A7184565821510160386%2C7184568231813103616)&dashCommentUrn=urn%3Ali%3Afsd_comment%3A(7184568231813103616%2Curn%3Ali%3Aactivity%3A7184565821510160386) No easy questions here, nor easy answers. I am pro-life. I am unwilling to fight a Civil War over that issue at this point. however, in the Venn Diagram of people like me, there are other issues combined with this one where I am diametrically opposed to the people in the other Venn diagram. (I use Venn Diagrams because our VP loves them). I love federalism because it does in fact offer a pressure relief valve. If the abortion rights activists want a national right to abortion, and many of them are okay with abortion on demand at any time/age. Does it stop there? Why not a national policy on other controversial issues? Let your own mind wander about how invasive the Feds could be.
Overturning Roe v Wade was the right legal decision. A "free market" in abortion for the 50 states exists. Free markets are messy. They take time to sort things out and in this case, Trump is correct. Let the states decide. Alabama's going to sort out IVF but because of Roe v Wade there is a lot of crappy law on the books that need to be overturned or amended. Arizona is another example. In fact, AZ might be a case where RINO Republicans who don't want to see Trump win initiated the legal warfare to keep Trump out.
I think it is fair to be objective when you look at your own beliefs and the leaders that advocate for them.
Trump is not correct. Federalism works when you are talking about things like education or healthcare policy.
Federalism doesn't work when the state governments advocate evil violations of human rights. Elective human abortion is no more accetable in any of the states than lynching is.
The 14th Amendment clearly establishes a right to life that the states cannont violate without the due process of law. The amendment explictly enables the Federal Government to step in when a state starts refusing to protect the rights of individuals. There is no more a right to abortion in a state than there is a right to lynching.
I am horrified, though not suprised, to see "conservatives" and "Christians" start advocating legal killing of unborn human beings to garner votes. It is a unprincipled cowardice.
What happens in human development in the womb is no longer a mystery. The life and humanity of an embryo or fetus in the womb is undeniable. Why don't we articulate it, instead of retreating?
Great rant. Maybe this will reach Taibbi and you two can have a conversation about it.
One quibble: nobody goes into pro-life activism for the grift. There’s no money in saving lives anymore. At least in Obama’s America.
There is money in it because I can raise money for my non-profit and earn income speaking for the cause...happens more than you think.
I miss-wrote. I’m not actually saying there’s not money in it. I’m saying it’s not really fair to call it a grift. If there are people in the pro-life movement that make a living from jt that aren’t true believers in the cause, I’ve never heard of them. But the dishonesty of people can be surprising sometimes. Probably there’s a few grifters out there. Kind of a weird cause to grift off though. I think of grifting usually in the context of political campaigns, where a lot of con artists make money telling candidates and media what their itching ears want to hear, even as they don’t believe a word of it. Beats working!
It's unfortunate, but I have lost a lot of faith in many charitable organizations. Many of them are fronts for highly paid "executives" who use the mission as a means to make just as much or more than they would at a profit company, but use the good nature of the people who support the cause for their perks and income.
At least 90-95% of charities are a grift. As a Christian, I include churches in that. I’ve personally been involved in a few good ones with transparent finances that are solid.
Always check the form 990 online at the IRS or guidestar. Check what the execs are making and what the top five paid positions are making and then the consultants. Then decide if you want to contribute.
Lot of ground covered here Mr Carter! All done well.
"guy like George Santos dropping the max", I presume that you meant George soros ? Excellent article by the way. Very thought provoking.
No. Kelly Anne Conway's husband and I got the name wrong. Thanks....writing too fast and I am my own editor!
I think it's wrong to assume that all buybacks follow the textbook formula you cite. You assume that all the corporate leaders are acting in good faith. I doubt that. One of Leopold's points that you haven't addressed is his accusation that the money for the buybacks is often extracted from the labor force in the form of cost cutting, layoffs, reductions in benefits, cuts to r&d, offshoring for cheap labor. While workers lose jobs, executives paid partially with stock make more. Boeing was buying back a lot of stock until covid and we're just figuring out where some of the profit for the buyback came from, and why the doors fall off and the engine housings disappear mid flight. Taibbi notes that buybacks were barred as manipulation until 1982. Maybe that was a good thing.
Here is my argument there: I can make widgets more efficiently(better software, robots etc) I can cut back on my workforce. My company becomes more profitable, and that's better for shareholders. What should I do with excess cash?
R+D expenditures often are cut back because it's too expensive to do internally. Some companies have a culture of buying innovation. Cut back on R+D, track it to buyouts of companies to see if there is a correlation.
Offshoring has more to do with US Labor and regulatory policy than anything else along with the kinds of goods which are being offshored. For example, China and Vietnam do a lot of commodity manufacturing where more difficult value add manufacturing is done in the US.
I don't think stock buybacks at Boeing are related to quality control in manufacturing. That's a reach.
"...extracting from the labor force."
Sorry, but this is a Leftist/Marxist argument. No corporation owes anyone a job. It also can pay any rate it wants. Yes, it makes sense for companies to pay a leading wage, but that may not be the company's strategy. The market will sort it out to see who wins.
A stock buyback after initiating cost savings is another independent event. And even if it was related, it is the company's prerogative to do what it wants. It is the ownership's money (the shareholders) not the employees'.
I don't know when in America we got this idea that companies were communal property that existed to serve "labor forces." It's a romantic notion, but it doesn't exist. It's fundamentally a false characterization of how our economy works.
The denial that racism is multidirectional is becoming an integral factor in the beginning process of self cleansing of universities, corporations and cities.(See recent DEI eliminations).
At the risk of sounding Shakespearean, my solution, which admittedly will never come to fruition, is to disallow any attorneys to run for elected public office in alternate elections for a couple decades. They are notoriously poor managers of money, second only to doctors, and generally mediocre in people management skills. From the beginning of their first job out of Law School until somewhere between their 5th and 10th year of their careers, their primary purpose is to increase billable hours and do research, at least until one or both sides run out of money and then they have become solution oriented very quickly. They are a big part of the problem. If we just have the Democrats elect Junior High and High School principals who've learned how to do more with less, and the Republicans elect Big Business Leaders, we will see a tremendous jump in the overall quality of life in this country, probably two decades' worth of improvement in a half decade's time. There will still be no shortage of attorneys to draft legislation and write policy and procedures, which is what they are good at doing. I am quite certain my suggestion appeals to all non attorneys in this country 🤨😄
Related post & discussion: What, Precisely, is the Issue with 'Elites'?
https://chicagoboyz.net/archives/70852.html
I wouldn't mind exec comp if they were competent and non-Marxist.