Notice how many of these mentioned brands are longstanding American juggernauts with decades long historys prior to the boom of Welchian "shareholder values above all else" ethos that are now struggling, went bankrupt, or have their reputations for quality irreversibly damaged?
@@christianlibertarian5488 Quality has dropped significantly since the Welchian takeover. That's exactly what you see happening with Boeing. John Oliver covered it. Please check it out.
but they, the zombies, essentially get "free monetary money" to stay afloat at the expense of those earning money with "blood, sweat, & tears...........
So we had these fantastic institutions built up over a lifetime, and rather than roll up our sleeves when competition came, our leaders tossed a match and took a check. How heroic
Even at one point Jack Welch said after he retired that chasing shareholder value all the time "the dumbest idea in the world" back in 2009. I guess he realized how damaging it was, but of course he had already secured the bag and popularity. And "Chainsaw" Al should have gone to prison for the stuff he did. I worked at IBM during the Gerstner years, it was pretty miserable and they ran that program until they completely lost their way and it took a decade to recover.
I was with IBM from 1978 to 2000. I lived through the Gerstner years as well as the preceding years with John Akers at the helm. IBM was literally DYING in those years. PCs and LAN-based distributed systems were growing rapidly, and Akers really had no idea how to lead the company. He was in well over his head because he was a born and bred "Blue Blood" IBMer who simply couldn't grasp the sea change that was happening in the industry. He came up with some bizarre program called "Market-Driven Quality" that accomplished nothing and that NO ONE ever understood, and he allowed the company to break itself up into a bunch of different "brands" like Pennant systems (printers), Adstar (storage), Ultimedia (multimedia-enabled PCs), etc. Customers were very confused in those years about exactly what IBM really was anymore, and where it was headed. I don't blame them... I was confused as well! We had a saying in IBM back then: "There they go. I must hurry, for I am their leader!" I lived right through the middle of the doomed PS/2 with its microchannel architecture, and OS/2... both of which were wonderful products in their own right, but both were DOOMED because of IBM's fundamental misunderstanding of the whole PC market. Intel and Microsoft just ran away from IBM and its VERY pricey fees for making microchannel expansion boards... an industry consortium dubbed the Gang Of Seven developed 32-bit EISA and then PCI, and the PS/2 and OS/2 just both very quickly died after that. And don't get me started on SAA (Systems Application Architecture) and its Common User Interface (CUI), etc. No customer EVER asked for a common code and UI architecture across mainframe and PC apps, and it never really worked very well. It was VERY complex and never really had much of a chance in the wild west PC world. Microsoft did a MUCH better job of signing up software vendors to write apps for Windows, and THAT is really what killed the PS/2 and OS/2. IBM never understood the nature and importance of PC apps... their old-world thinking was that customers would buy their microchannel PS/2s and OS/2 on their own merits, as customers had always bought IBM gear, and then figure out what to do with that gear. They were wrong, and that monumental failure shaped where the PC market, and the whole IT market, went in the future. It was indeed a horrible time for IBMers like me... we saw all manner of innovative new hardware and software coming to market in those years that did not need any IBM gear in the mix at all. Jim Cannavino, as President of the IBM PC Company, played a VERY large part in all of that, with what I call his "Big Iron Bravado" and frankly his outsized IBM executive ego as former head of the Data Systems Division, the mainframe part of IBM that had literally ruled the world in previous decades. But the PC world was a different game that he neither understood nor played well, and Intel and Microsoft simply didn't play by IBM's rules at all... they made their OWN world that had zero dependency on IBM. Big Blue struggled mightily to play in that world, and ultimately failed. My understanding was that IBM almost ran out of cash in the 90s, the stock dropped from around $172 all the way down to $38 (an astounding 78% loss in only a few years!), and the board brought in Gerstner to literally save it. He almost immediately brought IBM back together into the IBM brand, which was urgently needed. It's a good thing that the board hired him, because if they hadn't, IBM might well have gone under. So yeah, the Gerstner years were difficult, but he inherited an absolute MESS to try to fix. IBM had become so hideously bloated that quite drastic measures had to be taken. The IBM employee base had swelled to well over 415,000, and that was WAY too many.
I remember arguing with the IBM people about the advantages of Ethernet over token ring and they were so stubborn that they couldn’t realize the market was headed that way. I gave up on them
@@kencarp57 IBM is paradigmatic of the changes needed in the US between 1970 and 1990. The leaders of the big corporations didn’t realize that they had it easy with no world competition before 1970. So their thinking focused on salesmanship, not innovation, as how to move the company forward. Lack of competition let the corporation bloat.
@@kencarp57 Gerstner did some good work to clean up the bloat and they were bloated and stubborn to think well l, we’re Big Blue, no one can touch us. Until smaller companies started eating their lunch. My issue was they dumped many jobs, especially useless middle management, but went down the cheap path with development which cost them huge contracts. I was laid off in ‘09 as my entire project was shipped to Singapore as were many. It was a point my manager told me they won’t hire in the U.S. just off shore. The first team I managed was in Belarus with a dictator… I mean ‘President’ and on the USA’s special list. The architect of that mess was Bob Moffat who even had a patent for a calculation for offshoring jobs. He was supposed to follow Palmisano but some cheating on his wife and insider trading to his mistress killed his career. Palmisano was a clone of Gerstner but even he knew he handed a mess Ginny. Yes, cut the fat but there a point you have to stop and actually produce something. They stopped innovating and way overpaid for smaller companies. Oh well. I just fine post IBM, just the constant blind chase for shareholder value without stepping back to see the whole picture is dangerous.
Electrical Engineer here. I have over 25 years of experience as a design engineer. I hold a BSEE from Cal Poly SLO, and an MSEE from SCU. After working in the industry for 20 years - I began consulting in 2015. I've been consulting for 9 years now. What was my longest time working for one employer? 5 years. In some cases I left for better pay (needed to be able to buy a home in Silicon Valley) - but, in other scenarios I was laid off. I worked for Qualcomm for years - then an activist investor wanted to split Qualcomm into two - that didn't happen - but a huge layoff did occur. That was my last real job. I've been working for myself ever since. I enjoy the stability I get without a corporate job.
So it's a state by state thing? I thing I'll just advertise engineering design services until someone tells me otherwise. I have the degree and the experience, but never was in a position to get a PE (I'm a ME)@@silvermica
EE here as well, and your story is almost exactly the same as mine, even the years are similar. My corporate employee folks even warned me before choosing engineering to "never stop looking for your next job because every engineer gets laid off eventually." That was very solid advice to be honest.
Most large companies have a bad reputation now. Tesla, Google, Facebook, Microsoft, Amazon, Apple, Walmart, Boeing... if being a 'good' company led to long term success, then why aren't there any?
@@nua1234 plus decimation was totally random. The annual 10% layoff wasn't random at all. Everyone was trying to find the project or position to make themselves "too important to boot." Mangers started getting instructions to lay off more of the higher ranked employees versus the low rank fodder that was often hired specifically as "lay-off material" to protect "more valuable" employees. I was one of the out-sourced "contractors" that she mentioned working in a GE-type meat grinder at Ericsson in 2010.
@@redwolfexr All they've really done is broken the social contract between corporations and workers. Unions are enjoying a revival. Young people have a far more favorable opinion of socialism.
This is when the 'Employment Office' became 'Human Resources'. Employees no longer existed. Just another 'cost' against shareholders' dividends. When shares of stock were allowed as corporate compensation that really sealed the deal.
@@marcialabrahantes3369 yeah, but that's part of the problem; if the CEO is going to jump ship, or has some bonus, for hitting a share price target then their incentive is to juice the share price at a specific time, even if it's detrimental to the company in the long term. This is why a lot of the issues mentioned in the video are so prevalent; the executives are buying back shares, or cutting R&D funding to boost short term profitability, these things boost the stock price in the short term but damage the company in the long term.
@@marcialabrahantes3369 I think Capt. mostly meant "compensation" pay for executives who manipulated stock prices with buybacks, but didn't reinvest enough in the companies.
@@marcialabrahantes3369The shares go to the executives not the hourly employee. With such corporate consolidation today the only 'cost' they can control is labor. This is why corporate howls about increasing the minimum wage. They'll increase prices just to keep up their inordinate profits and bonuses.
@@marcialabrahantes3369Only the "corporate" high end employees got stock, not everyone, so that wasn't fair. Also, short term decisions were made to temporaritly increase stock prices and the decision makers knew the expiry date of the apparent revenue increases so they'd exit before the collapse.
Recall the Aesop's fable about the man who had a goose that laid gold eggs. All he had to do was protect and nurture the goose, keep a good thing going, and he could count on receiving a gold egg each day. However, eventually he got greedy and convinced himself that "If I kill the goose and open it up, I can have all the eggs it'll ever produce right now!" So he killed the goose and cut it open. But instead of finding a reservoir of gold eggs, he only found the internal organs of the goose, the "machinery" that produced the gold eggs. . As long as leaders are incentivized and rewarded for short-term gains using slavery tactics and "financial engineering" trickery at the expense of reality-based and sustainable production of value, this pattern of MBAs "killing golden geese"/destroying enterprises will persist. But they'll continue to be handsomely rewarded in the process, leaving devastation in their wakes. . What happened to Boeing is a single example of what this kind of thinking has done to American companies. And this disease of short-term thinking and acting has spread overseas.
I like your gory explanation. Private equity bought the company I spent 15 years at, but fired me because they thought they might save $10-20K per year on salary on someone else. They didn't care to understand all the hats I wore as a software programmer, drafter, engineer, field service support, and quality assurance. Jumped on me and walked me out, like the others one by one, until nobody with experience remained. It was the people and what they could do, and not the CAD files on the network, not the worn out machine shop, not the clunky inventory system database. How the bankers and suits could be that rich but that out of touch baffles me to this day. I'm sure they got their one extra egg.
The flip side is it gives other companies a chance to overtake them and it will usually lead to higher wages for the people at the other companies trying to take market share. Obviously it’s bad for the people that get laid off though
I don’t know how but you’ve managed to package an unbiased analysis that is more entertaining than the sensationalized segment of economic and financial news. Thank you for your efforts to be the signal and not the noise. I understand that the economy is currently in a downturn and that we must wait for things to get better.
As hard as it may sound you can plan for the recession. If you are working, find extra work and get an Invest--advisor. Protect your deposits by having enough cash in short term fixed income. Then cut your expenses. Minimal insurance, cut utilities.
I think the current market might give opportunities to maximize profit within a short term, but in order to execute such strategy , you must be a skilled practitioner
Exactly why i enjoy my day to day market decisions being guided by a portfolio-coach, seeing that their entire skillset is built around going long and short at the same time both employing risk for its asymmetrical upside and laying off risk as a hedge against the inevitable downward turns, coupled with the exclusive information/analysis they have, it's near impossible to not outperform, been using a portfolio-coach for over 2years+ and I've netted over $800k.
You're right, with such market uncertainties are the reason I don’t base my market judgements and decisions on rumours and here-says, got the best of me 2020 and had me holding worthless position in the market, I had to revamp my entire portfolio through the aid of an advisor, before I started seeing any significant results happens in my portfolio, been using the same advisor and I’ve scaled up 750k within 2 years, whether a bullish or down market, both makes for good profit, it all depends on where you’re looking.
I won't pretend to know everything, though. Her name is Annette Marie Holt but I won't say anything more. Most likely, you can find her basic information online; you are welcome to do further study.
CEO's and other big stockholders remind me of officers on a burning ship. While the crew is busy trying to fight the fire at one end of the boat, the officers are at the other end looting the safe and filling the best lifeboat with loot, food, water, compass and charts. Then just before jumping into the lifeboat, the captain shouts, "abandon ship!" and immediately rows away.
@@O5680 - That's right! Why spend money on ship repairs when you could use the money to buy back the shipping company's own stock! Plus, with any luck after the ship sinks all the witnesses will drown.
Having read the report on the Costa Concordia disaster, I think the above gives too much credit to the captain. Announcing abandon ship gives the passengers a chance to force the Captain to rush in getting away. Any situation that has the coast guard literally swearing at your Captain to get his ass back on the fucking ship has got to be the low point of everyone's career who was involved. By the way, despite being ordered with profanity multiple times, the piece of shit never returned to his ship. Among other tidbits in the report was that the captain's mistress was on the bridge at the time. To impress her he ran the ship near the coast at night. As the coast was unlit, it was not impressive. So he had the ship do it again but closer, leading to the obvious. People like this really strain my opposition to capital punishment.
dont we see this playing out now, HUGE companies with HUGE profits (so not broke) still laying off 1000s and then asking their boards for MORE MONEY as a good job payment
Outsourcing and offshoring shouldn't have been glossed over with just a few seconds of narrative. That has had a much larger impact on wages and job losses than stock buybacks. Employees that still have a job can buy the company stock and participate in the gains from the stock manipulation. An employee whose job is sent overseas isn't buying any stock (or food or anything else).
Wage stagnation and income inequality started in 1971 (bonus points to anyone who can figure out what happened in American finance & economics that year)...but since when have leftist whamens let facts get in the way of a good man-hating, competition-hating, amd merit-hating narrative.
They didn’t need to cover it in detail they just needed to cover it accurately. I don’t know why this concept is so hard for so many people. Chocking up the decisions made as simply greedy takes the same amount of time as accurately explaining their reasoning. “They cut jobs because they don’t like poor people and would love nothing more to see them suffer in the streets” is just as long as “they cut jobs to remove bloat, bureaucracy, and unnecessary expenses” Simplification is fine but misinformation isn’t This is especially bad when the video in question appears to be a cut down/less in depth version of a how money works video that was posted 3 weeks ago called “the worst business practice in history”
I started my professional finance career with Motorola at their Corporate Headquarters in 1977. In the earliest days, the company had a 'company wide' profit sharing formula where 10% of corporate profits were given back to the employees. The company also had a '10 year senior club, aka Galvanized after Bob Galvin, company CEO', meaning you could not be laid off without receiving another offer from the company if you had 10 years in. My O My, times have changed. I especially remember the 'rank and yank process', in the mid 90's, it got me once. Fortunately, through 4 full time jobs and 2 contract jobs, I completed 35 years in the high technology industry mostly as a financial budget controller.
More and more people might face a tough time in retirement. Low-paying jobs, inflation, and high rents make it hard to save. Now, middle-class Americans find it tough to own a home too, leaving them without a place to retire.
The increasing prices have impacted my plan to retire at 62, work part-time, and save for the future. I'm concerned about whether those who navigated the 2008 financial crisis had an easier time than I am currently experiencing. The combination of stock market volatility and a decrease in income is causing anxiety about whether I'll have sufficient funds for retirement.
This is precisely why I like having a portfolio coach guide my day-to-day market decisions: with their extensive knowledge of going long and short at the same time, using risk for its asymmetrical upside and laying it off as a hedge against the inevitable downward turns, their skillset makes it nearly impossible for them to underperform. I've been utilizing a portfolio coach for more than two years, and I've made over $800,000.
great gains there! mind sharing details of your advisor pleas? i've started gaining more cash flow with my employment and looking at putting money into stocks and alternative assets that can help build wealth over time
‘’Aileen Gertrude Tippy’’ is her name. She is regarded as a genius in her area and works for Empower Financial Services. She’s quite known in her field, look-her up.
Didn’t well he himself say that style of management was a mistake? It’s no surprise half of those companies nobody knows anymore and most of the other half are not even close to industry leaders.
Most of the graphs were normalized for 1980 (that may not be the official term - I do sociology, not stats). Whatever two variable they're measuring, like wages vs productivity for example, are both set at "0" for 1980. The graph then measures how those two variables have changed relative to each other since 1980. So if the productivity line is way above the wages line, then we can see that productivity has increased faster than wages since 1980. While it's true that normalizing for 1980 doesn't mean the trends weren't present prior, 1980(ish) is a bit of a consensus. The rise in inequality is tied to the rise of Neoliberal economic policies popularized during Thatcherism and Reaganism, which had their heights in the 1980s. What this video described was an aspect of neoliberalism. The way they presented the graphs was bit confusing, but the data's legit
@@mrggyit is not at all legitimate because productivity and wages grew together. EPI is leftist propaganda trash and actual economists have tore this apart years ago.
I’ve been asking these questions for 30 years since I was a teenager! I’m glad people with research resources are looking at what happened. The interesting thing will be what happens when the typical worker figures out they can do something!
Take a look at Robert Reich's video series from UC Berkeley. There is a lot of cause and effect that occurred during the 70s, and the economy felt it in the 1980s.
@@giorgos-4515 He wrote in his books that the 1920s "The Roaring '20s" and his father's small business at that time was the model he considered ideal. He conveniently left out the Great Depression that followed on the heels of that great technological revolution. He also conveniently left out the great benefit to strengthening all of America that results from Progressive leadership that Teddy Roosevelt and others gave. He wore the proverbial "rose-colored glasses".
One of the fact needs additional information. It was said that GE stock went up at 7% for 1980, but what was inflation that year? If inflation was higher than 7%, then technically the value of the stock went down.
I was at Agilent, 2006… they had a great quarter, nice profits but still had a small layoff… 80 people out of 1500. A “hair cut” or a small trim of the staff. I was a contractor and non were laid off. SAD. Companies do this to keep the Fear if God in employees and cutting 8% of salary / benefits.. adds to the bottom line… so bigger bonuses to the management.
I think the best shot at balance is regular stock options to make employees stock holders too. Then taking care of stock holders = taking care of employees.
Part of the problem is leadership. Ask those who had so much stock in Enron and then it went to crap. They were shareholders in a company they believed, but leadership was a crooked. Worker/shareholders is a great idea, but it still comes down to who is telling the workers what to do.
Absolutely not. Wage stagnation and income inequality started in 1971 (bonus points to anyone who can figure out what happened in American finance & economics that year)...but since when have leftist whamens let facts get in the way of a good man-hating, competition-hating, amd merit-hating narrative.
That list of companies... is telling. From my perspective, these were all companies that people absolutely loved, or in some way held dear... but now they just pass by unnoticed...unless they royally fuck up.
it doesn't make sense to me that one man can be the sole cause of why work sucks for people country after country generation after generation. for me, it's the whole vision that underlies society-that life is an inanimate object and this becomes the basis for school, work our institutions, technology etc so all human activity and relations are based on a machine like model that makes everything as lifeless as a machine and we just cogs in the wheel.
You are right that it is not one man. Or any human. The universe is indifferent to whether you live or die. All life, from human to bacteria, has to face this issue. Creating new means of producing that are cheaper and/or more robust is why we have civilization, and why we now live better than in the past. Work sucks because defeating the universe is difficult. It literally takes everything we have, every day.
@@christianlibertarian5488 Fantastic step back from the usual analysis of things. It's also a huge reason we need to approach issues like how and where we get our energy or how we might continue as a society if we have machines that can do all the physical work. These huge issues rarely get the attention that smaller things get.
Milton Friedman was a money guy, not an engineering guy. Instead of improving innovation and engineering - both he had no clue of - he "improved" financials. Which SEEMED to improve things for 10-20 years but now fires back - look at BOEING.
Why is it that you don't consider Ford's raising of salaries and reduction of working hours his way of constraining competition and making sure his employees could buy and use his stuff?
@@christianlibertarian5488 All those things were true at the same time. That is the problem with the topic. It's not 2 men or anything close, but it's a wonderful lure.
She literally used Henry Ford to exemplify that someone might have one or many concurrent, perhaps concealed motives, and that it's hard to nail down with certainty the motives of a given historical figure. Her point was that other things might be true of Ford than the prevailing narrative, and that she would be touching on some of the true things for the two figures the video addreses.
Reagan lowered income taxes, which incentivized investment. Bill Clinton passed a greatly midified GATT and NAFTA bill that caused countries to sell cheap goods in the US but block our goods in foreign markets. Reagan also started taxation on Social Security Insurance. Initially, a small percentage, which was dramatically increased during the Clinton era.
Lowering the top rates on income taxes did something that I don’t think anyone really expected at the time. It gave CEOs a reason to pickpocket their employees to inflate their own salaries. When tax rates rose steeply as income rose, you didn’t have much reason to want a super sized salary, because it didn’t increase your take home pay very much due to taxes. In the 70s there were even jokes about that baked into sitcoms.
The Executive does not make laws, the Legislature does, Congress under Reagan was democratic. But blame Reagan, I realize all liberal arguments hinge on that point.
Reagan lowered corporate income tax buddy. Eisenhower slashed it from 53% and then Reagan brought it right down. He didn't really do anything to help average people.
@@oreofudgeman Corporations don't pay taxes, they pass those costs onto the buyer (taxpayers). I guess the 20 years of continuous growth that followed was a fluke.
I can't stress enough how much of a breath of fresh air Morning Brew is, I have viewed and liked a lot of your other content but this one is just so god damn on point, MB team has absolutely nailed summarising it in such an interesting way and in such a short video (relatively). I recall reading MF's article (NY times I think) as part of a course in uni and my first thought was, what the actual fuck is he going on about! How can someone make such a ridiculous proposition, corporations don't exist in a vacuum, in fact they are always sheltered and protected by the people directly and indirectly, how on earth can someones just go off and say, nup, forget the society that is literally your foundation and just focus exclusively on a single dimensional obligation to your shareholder because, screw common sense, I guess. But as this excellent video points out, it took both sides to quash the working class, I don't think anyone really bought the absurd idea, at least not in the beginning, it was just a very convenient excuse at a time of turmoil, so the executives chose to just run with it, enabled by their ridiculous compensations which completely decoupled them from the woes of us mere mortals. For what its worth, it is nice to see most of these companies turn into husks of their former selves and running into ground, in case of Boeing, literally (no offence to any of the victims intended)
Yeah MB is so great! I think it's because all of their videos focus not only on social issues but how sociology and economics mesh to create these companies and trends...and their nuanced. It's not a "capitalism = bad" channel.
I agree its so great to find an echo chamber which rebounds the sounds I've already been pre-determined to like, it makes it easier to bounce my own ideas back off myself rather than being challenged. I love the confirmation bias, and prepackaged, consumable content designed to slant my worldview to one very warped one. Hurrah!
She touched on it a little bit when quoting Milton Friedman. Milton believed that executives who were looking out for the interests of the people instead of the interests of shareholders and profits were obstructing the free market and ‘preaching socialism’. He probably considered himself a patriot 🤡
Right away you have 4 graphs that don't show what you're saying they show. 3 of them cut off before 1980, so they give no indication of when the trend started, and the first one doesn't have any notable change at 1980 compared to other places on the plot.
I graduated college in 1982 and I totally agree - that is exactly what happened. I was shocked that things were chaning so much just when I was starting to work for one of the big companies you identified.
The end result of these layoffs is the destruction of the social contract between employees and corporations. Employees are no longer blindly loyal. Quiet quitting, WFH, job hopping, etc. were once considered taboo, but now are openly endorsed by career coaches. Younger generations even look at socialism more favorably over capitalism after seeing massive, arbitrary layoffs.
I think you are being unfair to Milton Freedman. He also said that when government spending exceeded about 25% of GDP the government became a burden on growth. He was also against deficit spending as it debased the currency causing inflation. If you want to blame someone for questionable corporatevpolicies, blame Jack Welsh the CEO of GE who as an ardent supporter of six sigma turned the whole manufacturing industry in to a bean counters paradise dedicated to cost reduction and little else. This also abandoned tge concept of Continuous Quality Improvement (CQI) followed by the Japanese car industry and hat is why we have Toyotas, Hondas and many other quality vehicles. Jack also diversified GE in to many other areas that showed profits due to financial trickery but ultimately nearly destroyed the corporation. Reagan and his Republican followers of the 1980s and 90s also have a lot to answer for with their tax gifts to the rich and the Great Lie of the era - Trickle down Economics and a ravenous, wasteful Medical/ Pharmaceutical/ insurance industries. Couple this with Deficit spending and America now pays as much to service the debt as they do for defence. Regards
Wonderful, informative, and eye-opening vid. Great job. Financial obligations vs. moral obligations. To the employees and the community at large. Perhaps the issue is how do we quantify the moral obligations, especially over a short period of time?
The way Jack Welsh and his acolytes are running corporations reminds me of the way the gangsters in Goodfellas ran the Coconut Club- extracted as much value out of it and then burn it down without looking back.
If a prospective employer wants to offer you a job in "The _______ Family" -- run away. "Family" don't toss their kids into a pit when it's financially convenient.
It’s amazing people who think that it’s in their interest to support the policies that have decimated the working class, like the people who support the politicians who support trickle down economics.
This is a great video. Of course, corporate income distributive practices before the '80's had nothing to do with socialism - which would involve government forcing distributive regimes. In that era, a firm with difficulties could still cut pay or layoff people or otherwise reduce benefits. Milton Friedman is an example of an academic (economist) who delivered a few interesting academic results in his early career and then parlayed this into a speaking and writing career implying his achievements proved he already knew the answer to every question. It shows how fragile social norms are when the rich and powerful give in to contempt for their workers (or their voters).
He won the Nobel Prize in economics, but I’m glad to see you and this tart presenting are here to lead the country to the new socialist utopia. You’re far smarter than Milton.
buybacks make sense when the stock price is low and when other investment opportunities (such as internal projects) don't offer similar returns. Plenty of companies are way overpaying on their own shares, but that doesn't make buybacks categorically bad.
I'm so happy I made productive decisions about my finances that changed my life forever,hoping to retire next year.. Investment should always be on any creative man's heart for success in life
YES! that's exactly her name (Stacey Macken) I watched her interview on CNN News and so many people recommended highly about her and her trading skills, she's an expert and I'm just starting with her....From Brisbane Australia
Investing has proven to be an incredibly beneficial decision. My cryptocurrency profits continue to play a substantial role in growing my overall wealth, reducing my reliance on my salary
Starting a graph from 1980 and arguing every problem started there is quite a poor approach to building an argument. Would have been nice if you showed trends over a century for example and then made such a claim. Might have been a great video to watch. But you lost your credibility in the first 30 seconds of the video. I call this intellectual dishonesty and don’t give screen time to such creators out of principle.
Of course it's intellectual dishonesty. To even apply the word "intellectual" to what amounts to a clear propaganda piece / a part of the MADCOM future we're headed in, is laughable.
Actually, one thing that turned out to have a bad effect was mutual funds. Previously, whether people were rich or middle class, they owned the stocks of a company directly and so could influence the company's CEO or Board of Directors directly. Now, most people have 'their' shares held by a mutual fund, which now, along with 'hedge funds', control almost everything, with the small or medium-small investor counting for nothing.
That's part of my point, though. A flood of hundreds of "investors" with no concern for the company itself. It forces the chasing of quarterly earnings bumps. These types of funders, don't typically buy shares at issue and leave as soon as the grass is greener elsewhere. Whether the company even survives is completely unimportant to them.@@CarlGerhardt1
Regarding stock buybacks, this is still a legal slightly-tweaked practice known in accounting terms as “Treasury Stock”. In layman’s terms: A company will purchase many of its own shares from shareholders if it feels they’re undervalued, when done on a proper scale amounts to the same effect that a stock buyback would in raising share prices, except that the treasury stock itself is meant to be illiquid. Considering the fact that CEOs can obviously still sell their personal shares, it just adds an administrative layer of red tape which has had an open loophole since its inception. You can still personally profit from it, it’s harder for the corporate entity itself to profit in the same way.
I'm perplexed by the narrative of "things were great then these 2 guys ruined it." It seems like things were great, stuff happened so that by the 70s those post-war economics weren't working like they once did, and these 2 guys found new policies that worked better for the current economic climate.
In the future, if you are referencing 1980 as a “turning point,” you should probably include approx equal space before and after on your graphs. Putting it in the left edge doesn’t tell me if it’s a continuing trend or a new phenomena
Yes, if you start a graph at 1980 and show from there, it will diverge even if the trend predates 1980. Show the history from before and then I'll believe you.
I am of the opinion that capitalism is the best of the economic systems BUT if you implement capitalism without a Christ/Biblical foundation you are going to have a system that sucks. My reason being that capitalism on its own (like anything humans are involved with) will erode. And I think we are seeing this today: A heartless and soulless corporate landscape. By having the economic system based on God's Word, you are confronted with "Love your neighbour as you love yourself" and "by this everyone will know that you are my disciples, if you love one another." At the end of the day, nothing you do will be perfect because humans are involved. But I do think a better system is possible. This is evidenced by the fact that better times have existed! Thanks for the video!
100% agree on the take on Welch, but Friedman is a misinterpretation. Every time somebody quotes Friedman they use that same sentence. His work is much broader and defends free market and the price system. It´s impossible to be perfect or correct on everything, so of course he could have said some stuff that, if read our of context, can create a monster.
I am not sure anyone can call Robert Allen of AT&T a protege of Jack Welch. He was slightly older than Jack Welch and his reason for the layoffs was based on both technology changes and deregulation which ended AT&T's almost guaranteed profit. Allen didn't understand the new competitive communication world and he and his cohort didn't understand how IP technology made AT&T's 'smart network' extinct. I enjoyed this video but I wanted to add my 2 cents about Allen.
Stock buybacks using debt 1000000% should still be illegal because price manipulation is exactly what that is. I am also not a fan of buybacks in general, but have no solid reason why a company that can afford to shouldn't be allowed to other than a vague sense that it'd be better to spend that as R&D, on their employees, or payout dividends so the wealth generation gets taxed appropriately.
Way too much time spent on stock buybacks. They are a non-issue (they are a technical thing. They can be good or bad for the company depending on other factors). Might want to spend more time on how Welch lied about the earnings numbers...
I have listened to many hours of Freedman. And this video is exactly the opposite of what it seems he was about. He taught that Capitalism was superior to any other ecomomic system, and that Government should have as little influence on business as possible.
Milton Friedman was a mixed bag of some very good ideas and very bad ideas. The negative income tax and volunteer military were great but shareholder supremacy was used and abused by guys like Jack Welch.
...its just that the policies he advocated create such positions. His type of market economics and anti-socialist tendencies was one of the drivers for US imperialism (and free market expansion) abroad, like Vietnam for example, where the draft was enacted. The income inequality and lack of intervention that creates poverty 'worthy' of receiving rebates was also informed upon his almost-Austrian school of thought. It's not a great idea to ascribe 'abuse' to what is clearly an expected consequence of his advocacy. Leftist groups have not shifted their position, and were vindicated. Can't beat the Keynes machine.
I haven't studied economics, but the way she describes it in the video doesn't connect. Profitable company increases its shareholder value, but they are still two very different things. These days the companies skip the healthy profit building that Friedman was talking about and jump straight into stock price manipulation. Serious investors don't do stupid things like closing R&D, because they know it will hurt them long term. It's the short term investors, and managers driven by annual bonuses, that seem to be the problem here.
@@milobem4458 Milton Friedman was a very academic and nuanced thinker. Guys like Jack Welch were just greedy and power hungry CEOs and took ideas that fit his vision and ignored everything else. It was a problem Friedman was aware of in his time and even addressed it on interviews.
@@milobem4458 Many people in those days became very cynical, perhaps because of the Vietnam war and Watergate, but they did. They took that into companies and said, YOLO, so let me get mine now. That pushed everything to the short-term and a lot of what you see today.
For a publication that has a newsletter that is all about perspective and nuance, you only give lip service to it. I can practically smell the principals of Friedman in this video. If you want to make a 2h documentary that covers all of the material that you covered today, without all the important bits sawed off, do it. I and millions of others watch those.
I love how everyone misses the most obvious answer as to why Ford gave more money to his workers and why GE was proud to pay taxes. people believed in higher moral authority (God) and they believed in their country.
Almost every large company has a job destruction department that has a budget and resourses dedicated to reducing headcount. It used to be this work was done by outside "consultants," but companies quickly learned it was cheaper to bring this in-house. AI tools will soon greatly empower these departments (if they haven't already).
The Air Traffic Controller strike was a national threat. The union involved should have stayed at the bargaining table. Strikes should be considered a “nuclear option” of last resort. Also, unions need to “take the pulse” of the businesses they are involved in, and make contract decisions based on that. There were a lot of strikes in the 1960s and 1970s that resulted in business closures. My observation, memories, and opinion.
It might not be that simple. Production is still dependent on land-labor-capital, but there is a shift towards capital. Many areas do well without any human labor, or just a handful of workers as machines are just more cost-effective. On the other side, this made production explode. Today a middle-class citizen in most countries lives a better life than a king just 200 years ago. Worktimes shrunk from 60 hours a week to 40 hours a week to more like 30 hours a week today. Well, unless you work for a US company which wants to waste 40+ hours of your time, expecting better performance from you. So, capital creates capital, so the inequality grows and grows, but so far us, average Joes and Janes are not doing bad. The real question is where does this trend lead. If the capitalists are willing to continue to share enough with the rest - then we'll work even less, maybe even none at all, and will have a lot of freedom still. If they go to extremes, then most of humanity will just starve in slums. We need to make sure the later doesn't happen - we still have some control over our governments, and the governments still have some control over the capitalists. Let's just keep it that way, or the whole human civilization will stagnate and die, as a few hundred thousand inbred idiots won't be able to keep the civilization for long, and they will die out along with the rest.
@@ExPwner Most people I know who were old enough to remember the 70s well do not feel like the average person is better off now. The lower middle class has particularly lost ground, as they typically could afford a house, a car, and kids back then.
@@aliannarodriguez1581their feelings are completely wrong. We have the data and more people buy homes now than then. More people have cars now than then. You’re obviously blowing smoke. The data doesn’t lie.
Not INVESTING IN THEIR EMPLOYEES..... STOCK BUY BACKS.... NO RESEARCH AND DEVELOPMENT.....OMG... 😱 OMG........THIS IS REALLY SAD....... THIS UTUBE VIDEO MADE ME CRY. MY HEART OUT......
You didn't need to cover those faces. It was extremely obvious who would be revealed based on the descriptions. Even if you don't care about the overall economy or labor, these men were terrible for our productivity, as they preached destroying the economic engines that they inherited for short-term gains. There was no purpose to corporations except to liquidate their value as rapidly as possible to enrich the board, and if the corporate governance was not already broken, perhaps the shareholders would benefit too.
My opinion: What you're looking for is the Military Industrial Complex. Basically covert ops using misery as power & trade. GE was the largest Military contractor until it sold off those businesses. My experience: Back in the 80s GE was recruiting me as a child to grow up and go work for KPMG. It is far more crooked then you can imagine.
One point to add is that share buybacks aren’t that special. Company with decent and stable cashflow can pay dividends, if they don’t plan to invest or hold cash. Buybacks are not that different for the company’s finance from dividends, except for shareholders’ preferences(cash, tax etc). Also the stock market does price-in buybacks vs. dividends rather efficiently.
Nice job but you should of included one more person that made a huge difference during this same time period and his name was Lewis Powell who wrote the Powell memo to all US corporations that bribing politicians with corporate money would make them even more powerful than they already were becoming. He also was the deciding vote on Citizens United (yes he was on the Supreme Court) and this unshed in a new era of corporate control over our now bribed government.
Watching the Nelson Peltz vs Disney drama unfold, and thinking about your note on how technically CEOs dont have a sole obligation to the shareholders: unfortunately even if thats the case de jure, its not the de facto case, because at any given time institutional shareholders will gladly rally behind an activist investor with a vision to "make line go up". Its incredibly disheartening and i dont see a way for the current system to ever return to a focus on longer term outcomes, since shareholders always want stock prices to rise "now".
The hood side of this is that I work for a start up and I just hit my numbers for the year by convincing a company to leave IBM and go with us. Thank god they stopped investing in their workers and products
I worked for a US bank who got the GE religion. Everything had to be seen through the optics of what would GE do. Which was basely cutting costs and getting involved in stuff you did not understand properly. One other group that deserves mention is management consulting companies. Charging high fees to write the report that the management wanted which was the answer to the ills was to cut people. Yes McKinsey I am talking about you.
In the same way that I can appreciate that modern baseball management for being maximally efficient even if it makes the game aesthetically worse, I can appreciate that getting rid of corporate bloat and maximising shareholder value makes sense in the short-to-medium term even if it is corrosive to society
That’s the job of government. You don’t want too much regulation but business requires trust and government enforces the standards that allow, for example, you to buy milk with confidence that it doesn’t contain dangerous bacteria.
Notice how many of these mentioned brands are longstanding American juggernauts with decades long historys prior to the boom of Welchian "shareholder values above all else" ethos that are now struggling, went bankrupt, or have their reputations for quality irreversibly damaged?
The quality dropped *before* the Welchian era. The companies that didn’t act in the Welchian manner no longer exist.
@@christianlibertarian5488 Quality has dropped significantly since the Welchian takeover. That's exactly what you see happening with Boeing. John Oliver covered it. Please check it out.
but they, the zombies, essentially get "free monetary money" to stay afloat at the expense of those earning money with "blood, sweat, & tears...........
It's called time changes and any company who doesn't change and compete is left behind. I.e. going under.
@@murimurimrui You can change without all these crap methods. Share buyback is for the benefit of CEOs and nobody else.
So we had these fantastic institutions built up over a lifetime, and rather than roll up our sleeves when competition came, our leaders tossed a match and took a check. How heroic
As intended by them ! That's exactly what they wanted.
In Germany we say "only sheep choose their shaughters"
What institutions did you build?
Your an employee
You din build shit
You not entitled to shit
Yay capitalism!!
Patriotism, sensitivity to history, and Christianity OVER economics. Economics is but a side effect of human existence.
Even at one point Jack Welch said after he retired that chasing shareholder value all the time "the dumbest idea in the world" back in 2009. I guess he realized how damaging it was, but of course he had already secured the bag and popularity. And "Chainsaw" Al should have gone to prison for the stuff he did. I worked at IBM during the Gerstner years, it was pretty miserable and they ran that program until they completely lost their way and it took a decade to recover.
I was with IBM from 1978 to 2000. I lived through the Gerstner years as well as the preceding years with John Akers at the helm. IBM was literally DYING in those years. PCs and LAN-based distributed systems were growing rapidly, and Akers really had no idea how to lead the company. He was in well over his head because he was a born and bred "Blue Blood" IBMer who simply couldn't grasp the sea change that was happening in the industry. He came up with some bizarre program called "Market-Driven Quality" that accomplished nothing and that NO ONE ever understood, and he allowed the company to break itself up into a bunch of different "brands" like Pennant systems (printers), Adstar (storage), Ultimedia (multimedia-enabled PCs), etc. Customers were very confused in those years about exactly what IBM really was anymore, and where it was headed. I don't blame them... I was confused as well!
We had a saying in IBM back then: "There they go. I must hurry, for I am their leader!"
I lived right through the middle of the doomed PS/2 with its microchannel architecture, and OS/2... both of which were wonderful products in their own right, but both were DOOMED because of IBM's fundamental misunderstanding of the whole PC market. Intel and Microsoft just ran away from IBM and its VERY pricey fees for making microchannel expansion boards... an industry consortium dubbed the Gang Of Seven developed 32-bit EISA and then PCI, and the PS/2 and OS/2 just both very quickly died after that. And don't get me started on SAA (Systems Application Architecture) and its Common User Interface (CUI), etc. No customer EVER asked for a common code and UI architecture across mainframe and PC apps, and it never really worked very well. It was VERY complex and never really had much of a chance in the wild west PC world.
Microsoft did a MUCH better job of signing up software vendors to write apps for Windows, and THAT is really what killed the PS/2 and OS/2. IBM never understood the nature and importance of PC apps... their old-world thinking was that customers would buy their microchannel PS/2s and OS/2 on their own merits, as customers had always bought IBM gear, and then figure out what to do with that gear. They were wrong, and that monumental failure shaped where the PC market, and the whole IT market, went in the future. It was indeed a horrible time for IBMers like me... we saw all manner of innovative new hardware and software coming to market in those years that did not need any IBM gear in the mix at all. Jim Cannavino, as President of the IBM PC Company, played a VERY large part in all of that, with what I call his "Big Iron Bravado" and frankly his outsized IBM executive ego as former head of the Data Systems Division, the mainframe part of IBM that had literally ruled the world in previous decades. But the PC world was a different game that he neither understood nor played well, and Intel and Microsoft simply didn't play by IBM's rules at all... they made their OWN world that had zero dependency on IBM. Big Blue struggled mightily to play in that world, and ultimately failed.
My understanding was that IBM almost ran out of cash in the 90s, the stock dropped from around $172 all the way down to $38 (an astounding 78% loss in only a few years!), and the board brought in Gerstner to literally save it. He almost immediately brought IBM back together into the IBM brand, which was urgently needed. It's a good thing that the board hired him, because if they hadn't, IBM might well have gone under. So yeah, the Gerstner years were difficult, but he inherited an absolute MESS to try to fix. IBM had become so hideously bloated that quite drastic measures had to be taken. The IBM employee base had swelled to well over 415,000, and that was WAY too many.
I remember arguing with the IBM people about the advantages of Ethernet over token ring and they were so stubborn that they couldn’t realize the market was headed that way. I gave up on them
@@kencarp57 IBM is paradigmatic of the changes needed in the US between 1970 and 1990. The leaders of the big corporations didn’t realize that they had it easy with no world competition before 1970. So their thinking focused on salesmanship, not innovation, as how to move the company forward. Lack of competition let the corporation bloat.
@@kencarp57 Gerstner did some good work to clean up the bloat and they were bloated and stubborn to think well l, we’re Big Blue, no one can touch us. Until smaller companies started eating their lunch. My issue was they dumped many jobs, especially useless middle management, but went down the cheap path with development which cost them huge contracts. I was laid off in ‘09 as my entire project was shipped to Singapore as were many. It was a point my manager told me they won’t hire in the U.S. just off shore. The first team I managed was in Belarus with a dictator… I mean ‘President’ and on the USA’s special list. The architect of that mess was Bob Moffat who even had a patent for a calculation for offshoring jobs. He was supposed to follow Palmisano but some cheating on his wife and insider trading to his mistress killed his career. Palmisano was a clone of Gerstner but even he knew he handed a mess Ginny. Yes, cut the fat but there a point you have to stop and actually produce something. They stopped innovating and way overpaid for smaller companies. Oh well. I just fine post IBM, just the constant blind chase for shareholder value without stepping back to see the whole picture is dangerous.
@@artholyokeDon’t get me started on Token ring…. Sheesh.
Electrical Engineer here. I have over 25 years of experience as a design engineer. I hold a BSEE from Cal Poly SLO, and an MSEE from SCU. After working in the industry for 20 years - I began consulting in 2015. I've been consulting for 9 years now. What was my longest time working for one employer? 5 years. In some cases I left for better pay (needed to be able to buy a home in Silicon Valley) - but, in other scenarios I was laid off. I worked for Qualcomm for years - then an activist investor wanted to split Qualcomm into two - that didn't happen - but a huge layoff did occur. That was my last real job. I've been working for myself ever since. I enjoy the stability I get without a corporate job.
Do you need a PE to be an engineering consultant?
In the corporate area now, real work is denigrated but conjuring is exalted.
@@lucysmith4242 - With the new AB5 law in California - technically yes.
So it's a state by state thing? I thing I'll just advertise engineering design services until someone tells me otherwise. I have the degree and the experience, but never was in a position to get a PE (I'm a ME)@@silvermica
EE here as well, and your story is almost exactly the same as mine, even the years are similar.
My corporate employee folks even warned me before choosing engineering to "never stop looking for your next job because every engineer gets laid off eventually." That was very solid advice to be honest.
Maybe this concept is why Boeing planes ✈️ are falling out of the sky. 🤦🏻♂️
It's actually because they merged with McDonald Douglass who were notorious for loving Welsh.
@@KRYMauL that’s part of it
I heard one of their quality insurance inspector was so unhappy with their work tthat he rather ..... killed himself. If you could belive it.
Diversity hires
@@jameslave98 Boeing problems have been growing for years. I’m not interested in the racial crap, go comment elsewhere.🤦🏻♂️
Funny how most of these companies have a bad reputation now
And they don't care...............................
But the executives that screwed over the company long term took home huge bonuses, while they destroyed the company.
Most large companies have a bad reputation now. Tesla, Google, Facebook, Microsoft, Amazon, Apple, Walmart, Boeing... if being a 'good' company led to long term success, then why aren't there any?
"Rank and yank" is a nice euphemism for what the ancient Romans called "Decimation"
I got the yank bit down
Most famously done by Crassus
Except the Romans only decimation as punishment when things went wrong, rather than companies using when things are going well.
@@nua1234 plus decimation was totally random. The annual 10% layoff wasn't random at all. Everyone was trying to find the project or position to make themselves "too important to boot." Mangers started getting instructions to lay off more of the higher ranked employees versus the low rank fodder that was often hired specifically as "lay-off material" to protect "more valuable" employees.
I was one of the out-sourced "contractors" that she mentioned working in a GE-type meat grinder at Ericsson in 2010.
@@redwolfexr All they've really done is broken the social contract between corporations and workers. Unions are enjoying a revival. Young people have a far more favorable opinion of socialism.
This is when the 'Employment Office' became 'Human Resources'. Employees no longer existed. Just another 'cost' against shareholders' dividends. When shares of stock were allowed as corporate compensation that really sealed the deal.
but wouldn't shares of the company as payment make the employees aligned with the stocks going up in price vs raw cash?
@@marcialabrahantes3369 yeah, but that's part of the problem; if the CEO is going to jump ship, or has some bonus, for hitting a share price target then their incentive is to juice the share price at a specific time, even if it's detrimental to the company in the long term. This is why a lot of the issues mentioned in the video are so prevalent; the executives are buying back shares, or cutting R&D funding to boost short term profitability, these things boost the stock price in the short term but damage the company in the long term.
@@marcialabrahantes3369 I think Capt. mostly meant "compensation" pay for executives who manipulated stock prices with buybacks, but didn't reinvest enough in the companies.
@@marcialabrahantes3369The shares go to the executives not the hourly employee. With such corporate consolidation today the only 'cost' they can control is labor. This is why corporate howls about increasing the minimum wage. They'll increase prices just to keep up their inordinate profits and bonuses.
@@marcialabrahantes3369Only the "corporate" high end employees got stock, not everyone, so that wasn't fair. Also, short term decisions were made to temporaritly increase stock prices and the decision makers knew the expiry date of the apparent revenue increases so they'd exit before the collapse.
Recall the Aesop's fable about the man who had a goose that laid gold eggs. All he had to do was protect and nurture the goose, keep a good thing going, and he could count on receiving a gold egg each day. However, eventually he got greedy and convinced himself that "If I kill the goose and open it up, I can have all the eggs it'll ever produce right now!" So he killed the goose and cut it open. But instead of finding a reservoir of gold eggs, he only found the internal organs of the goose, the "machinery" that produced the gold eggs.
.
As long as leaders are incentivized and rewarded for short-term gains using slavery tactics and "financial engineering" trickery at the expense of reality-based and sustainable production of value, this pattern of MBAs "killing golden geese"/destroying enterprises will persist. But they'll continue to be handsomely rewarded in the process, leaving devastation in their wakes.
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What happened to Boeing is a single example of what this kind of thinking has done to American companies. And this disease of short-term thinking and acting has spread overseas.
I like your gory explanation. Private equity bought the company I spent 15 years at, but fired me because they thought they might save $10-20K per year on salary on someone else. They didn't care to understand all the hats I wore as a software programmer, drafter, engineer, field service support, and quality assurance.
Jumped on me and walked me out, like the others one by one, until nobody with experience remained. It was the people and what they could do, and not the CAD files on the network, not the worn out machine shop, not the clunky inventory system database.
How the bankers and suits could be that rich but that out of touch baffles me to this day.
I'm sure they got their one extra egg.
The flip side is it gives other companies a chance to overtake them and it will usually lead to higher wages for the people at the other companies trying to take market share. Obviously it’s bad for the people that get laid off though
I don’t know how but you’ve managed to package an unbiased analysis that is more entertaining than the sensationalized segment of economic and financial news. Thank you for your efforts to be the signal and not the noise. I understand that the economy is currently in a downturn and that we must wait for things to get better.
As hard as it may sound you can plan for the recession. If you are working, find extra work and get an Invest--advisor. Protect your deposits by having enough cash in short term fixed income. Then cut your expenses. Minimal insurance, cut utilities.
I think the current market might give opportunities to maximize profit within a short term, but in order to execute such strategy , you must be a skilled practitioner
Exactly why i enjoy my day to day market decisions being guided by a portfolio-coach, seeing that their entire skillset is built around going long and short at the same time both employing risk for its asymmetrical upside and laying off risk as a hedge against the inevitable downward turns, coupled with the exclusive information/analysis they have, it's near impossible to not outperform, been using a portfolio-coach for over 2years+ and I've netted over $800k.
You're right, with such market uncertainties are the reason I don’t base my market judgements and decisions on rumours and here-says, got the best of me 2020 and had me holding worthless position in the market, I had to revamp my entire portfolio through the aid of an advisor, before I started seeing any significant results happens in my portfolio, been using the same advisor and I’ve scaled up 750k within 2 years, whether a bullish or down market, both makes for good profit, it all depends on where you’re looking.
I won't pretend to know everything, though. Her name is Annette Marie Holt but I won't say anything more. Most likely, you can find her basic information online; you are welcome to do further study.
CEO's and other big stockholders remind me of officers on a burning ship. While the crew is busy trying to fight the fire at one end of the boat, the officers are at the other end looting the safe and filling the best lifeboat with loot, food, water, compass and charts.
Then just before jumping into the lifeboat, the captain shouts, "abandon ship!" and immediately rows away.
Then in his memoirs, the captain portrays the sailors as lazy drunks who smoked indoors.
The captain (CEO) looks at his burning ship with a large hole in its hull and thinks to himself that fixing the hole is too expensive.
@@O5680 - That's right! Why spend money on ship repairs when you could use the money to buy back the shipping company's own stock! Plus, with any luck after the ship sinks all the witnesses will drown.
Having read the report on the Costa Concordia disaster, I think the above gives too much credit to the captain. Announcing abandon ship gives the passengers a chance to force the Captain to rush in getting away. Any situation that has the coast guard literally swearing at your Captain to get his ass back on the fucking ship has got to be the low point of everyone's career who was involved. By the way, despite being ordered with profanity multiple times, the piece of shit never returned to his ship. Among other tidbits in the report was that the captain's mistress was on the bridge at the time. To impress her he ran the ship near the coast at night. As the coast was unlit, it was not impressive. So he had the ship do it again but closer, leading to the obvious. People like this really strain my opposition to capital punishment.
actually this was played out in Lord of the RIngs the dragon was attacking town and the mayor was on his boat trying to escape
When a CEO lays off workers he/she is typically rewarded by shareholders with a big bonus. Don't work for corporate America...it's soul crushing.
Working for the enemy
dont we see this playing out now, HUGE companies with HUGE profits (so not broke) still laying off 1000s and then asking their boards for MORE MONEY as a good job payment
Outsourcing and offshoring shouldn't have been glossed over with just a few seconds of narrative. That has had a much larger impact on wages and job losses than stock buybacks. Employees that still have a job can buy the company stock and participate in the gains from the stock manipulation. An employee whose job is sent overseas isn't buying any stock (or food or anything else).
What's worse is that the government allowed those companies to get tax breaks and incentives for sending those jobs overseas
@@scpatl4now Exactly. Our government sold us out.
Yes, and one guy tried to stop it, (at least partly), and you can see what they did, (and are doing), to him.@@Saliferous
Our should when you're s spreading propaganda to stupid ppl with short attention spans
Our government?@@Saliferous
I can't believe you didn't cover 50 years of economic history in detail in your 13 minutes video
I know! Fake news! Communist propaganda!
Every person who worked on this should know this is the reason I am disliking the video. And not subscribing.
Wage stagnation and income inequality started in 1971 (bonus points to anyone who can figure out what happened in American finance & economics that year)...but since when have leftist whamens let facts get in the way of a good man-hating, competition-hating, amd merit-hating narrative.
@@JPs-q1owages didn’t even stagnate. It’s a complete myth.
They didn’t need to cover it in detail they just needed to cover it accurately.
I don’t know why this concept is so hard for so many people.
Chocking up the decisions made as simply greedy takes the same amount of time as accurately explaining their reasoning.
“They cut jobs because they don’t like poor people and would love nothing more to see them suffer in the streets” is just as long as “they cut jobs to remove bloat, bureaucracy, and unnecessary expenses”
Simplification is fine but misinformation isn’t
This is especially bad when the video in question appears to be a cut down/less in depth version of a how money works video that was posted 3 weeks ago called “the worst business practice in history”
I started my professional finance career with Motorola at their Corporate Headquarters in 1977. In the earliest days, the company had a 'company wide' profit sharing formula where 10% of corporate profits were given back to the employees. The company also had a '10 year senior club, aka Galvanized after Bob Galvin, company CEO', meaning you could not be laid off without receiving another offer from the company if you had 10 years in. My O My, times have changed. I especially remember the 'rank and yank process', in the mid 90's, it got me once. Fortunately, through 4 full time jobs and 2 contract jobs, I completed 35 years in the high technology industry mostly as a financial budget controller.
More and more people might face a tough time in retirement. Low-paying jobs, inflation, and high rents make it hard to save. Now, middle-class Americans find it tough to own a home too, leaving them without a place to retire.
The increasing prices have impacted my plan to retire at 62, work part-time, and save for the future. I'm concerned about whether those who navigated the 2008 financial crisis had an easier time than I am currently experiencing. The combination of stock market volatility and a decrease in income is causing anxiety about whether I'll have sufficient funds for retirement.
This is precisely why I like having a portfolio coach guide my day-to-day market decisions: with their extensive knowledge of going long and short at the same time, using risk for its asymmetrical upside and laying it off as a hedge against the inevitable downward turns, their skillset makes it nearly impossible for them to underperform. I've been utilizing a portfolio coach for more than two years, and I've made over $800,000.
great gains there! mind sharing details of your advisor pleas? i've started gaining more cash flow with my employment and looking at putting money into stocks and alternative assets that can help build wealth over time
‘’Aileen Gertrude Tippy’’ is her name. She is regarded as a genius in her area and works for Empower Financial Services. She’s quite known in her field, look-her up.
Thanks a lot for this suggestion. I needed this myself, I looked her up, and I have sent her an email. I hope she gets back to me soon.
In the book "The Psychopath Test", Jon Ronson interviews both Al "Chainsaw" Dunlap and one of his victims. Sobering, and enraging.
Wouldn't be surprised if he scored right up there with Ted Bundy.
"When a measure becomes a target, it ceases to be a good measure." - Charles Goodhart, 1975.
Didn’t well he himself say that style of management was a mistake?
It’s no surprise half of those companies nobody knows anymore and most of the other half are not even close to industry leaders.
I appreciate a stop to present the opposite view on buyouts then the one that was suited best for the thesis in the video.
The only concern I have with this video is the premise that all this "Started" in 1980. Just because the graphs all seem to begin in 1980
Most of the graphs were normalized for 1980 (that may not be the official term - I do sociology, not stats). Whatever two variable they're measuring, like wages vs productivity for example, are both set at "0" for 1980. The graph then measures how those two variables have changed relative to each other since 1980. So if the productivity line is way above the wages line, then we can see that productivity has increased faster than wages since 1980. While it's true that normalizing for 1980 doesn't mean the trends weren't present prior, 1980(ish) is a bit of a consensus. The rise in inequality is tied to the rise of Neoliberal economic policies popularized during Thatcherism and Reaganism, which had their heights in the 1980s. What this video described was an aspect of neoliberalism. The way they presented the graphs was bit confusing, but the data's legit
You have a point truth is Presidents before Regan did many things that precipted societal collapse too
@@mrggyit is not at all legitimate because productivity and wages grew together. EPI is leftist propaganda trash and actual economists have tore this apart years ago.
I’ve been asking these questions for 30 years since I was a teenager! I’m glad people with research resources are looking at what happened. The interesting thing will be what happens when the typical worker figures out they can do something!
Take a look at Robert Reich's video series from UC Berkeley. There is a lot of cause and effect that occurred during the 70s, and the economy felt it in the 1980s.
Kind of funny for Friedman to be talking about "free enterprise", when he's a tenured professor with guaranteed salary...
i want to know who hurt him and he had such bad ideas. he was trying to play the tough guy when clearly he was not.
@@giorgos-4515 He wrote in his books that the 1920s "The Roaring '20s" and his father's small business at that time was the model he considered ideal. He conveniently left out the Great Depression that followed on the heels of that great technological revolution. He also conveniently left out the great benefit to strengthening all of America that results from Progressive leadership that Teddy Roosevelt and others gave. He wore the proverbial "rose-colored glasses".
@@markhathaway9456Thank God for mental gymnastics 🙏🤣
@@markhathaway9456progressive policy caused the Great Depression, not laissez faire.
rugged capitalism for the poors, cushy socialism for the rich. Just look at Ayn Rand on welfare in the last years of her life.
One of the fact needs additional information. It was said that GE stock went up at 7% for 1980, but what was inflation that year? If inflation was higher than 7%, then technically the value of the stock went down.
I was at Agilent, 2006… they had a great quarter, nice profits but still had a small layoff… 80 people out of 1500. A “hair cut” or a small trim of the staff. I was a contractor and non were laid off. SAD. Companies do this to keep the Fear if God in employees and cutting 8% of salary / benefits.. adds to the bottom line… so bigger bonuses to the management.
I think the best shot at balance is regular stock options to make employees stock holders too. Then taking care of stock holders = taking care of employees.
There’s an organization trying to make that more common called Ownership Works
Part of the problem is leadership. Ask those who had so much stock in Enron and then it went to crap. They were shareholders in a company they believed, but leadership was a crooked. Worker/shareholders is a great idea, but it still comes down to who is telling the workers what to do.
@@kcarter5823Shareholders vote for boardmembers.
You should read about the practice of "codetermination" that they have in Germany.
All employees who have worked there for two years should be able to elect their manager.
I suggest, "we the people" Collectively begin boycotting as many of the egregiously immoral/unethical corporations posing as well meaning enterprises.
Absolutely fantastic video. Great research, caveats, and delivery. You have earned that ringing bell.
Absolutely not. Wage stagnation and income inequality started in 1971 (bonus points to anyone who can figure out what happened in American finance & economics that year)...but since when have leftist whamens let facts get in the way of a good man-hating, competition-hating, amd merit-hating narrative.
Not at all great research. She lied from the very start
That list of companies... is telling. From my perspective, these were all companies that people absolutely loved, or in some way held dear... but now they just pass by unnoticed...unless they royally fuck up.
There is something very captivating about the way Karin does her reporting 😅 - always entertaining to watch!
Employees are no longer valued as the most precious commodity of the business… they are valued as a giant expense.
it doesn't make sense to me that one man can be the sole cause of why work sucks for people country after country generation after generation. for me, it's the whole vision that underlies society-that life is an inanimate object and this becomes the basis for school, work our institutions, technology etc so all human activity and relations are based on a machine like model that makes everything as lifeless as a machine and we just cogs in the wheel.
You are right that it is not one man. Or any human. The universe is indifferent to whether you live or die. All life, from human to bacteria, has to face this issue. Creating new means of producing that are cheaper and/or more robust is why we have civilization, and why we now live better than in the past. Work sucks because defeating the universe is difficult. It literally takes everything we have, every day.
@@christianlibertarian5488 Fantastic step back from the usual analysis of things. It's also a huge reason we need to approach issues like how and where we get our energy or how we might continue as a society if we have machines that can do all the physical work. These huge issues rarely get the attention that smaller things get.
Milton Friedman was a money guy, not an engineering guy.
Instead of improving innovation and engineering - both
he had no clue of - he "improved" financials. Which SEEMED
to improve things for 10-20 years but now fires back - look at BOEING.
Why is it that you don't consider Ford's raising of salaries and reduction of working hours his way of constraining competition and making sure his employees could buy and use his stuff?
Because that wasn’t true. Ford raised salaries because he couldn’t hold employees. Turnover was killing productivity.
@@christianlibertarian5488 All those things were true at the same time. That is the problem with the topic. It's not 2 men or anything close, but it's a wonderful lure.
She literally used Henry Ford to exemplify that someone might have one or many concurrent, perhaps concealed motives, and that it's hard to nail down with certainty the motives of a given historical figure. Her point was that other things might be true of Ford than the prevailing narrative, and that she would be touching on some of the true things for the two figures the video addreses.
Reagan lowered income taxes, which incentivized investment. Bill Clinton passed a greatly midified GATT and NAFTA bill that caused countries to sell cheap goods in the US but block our goods in foreign markets. Reagan also started taxation on Social Security Insurance. Initially, a small percentage, which was dramatically increased during the Clinton era.
Lowering the top rates on income taxes did something that I don’t think anyone really expected at the time. It gave CEOs a reason to pickpocket their employees to inflate their own salaries. When tax rates rose steeply as income rose, you didn’t have much reason to want a super sized salary, because it didn’t increase your take home pay very much due to taxes. In the 70s there were even jokes about that baked into sitcoms.
The Executive does not make laws, the Legislature does, Congress under Reagan was democratic. But blame Reagan, I realize all liberal arguments hinge on that point.
Reagan lowered corporate income tax buddy. Eisenhower slashed it from 53% and then Reagan brought it right down. He didn't really do anything to help average people.
@@oreofudgeman Corporations don't pay taxes, they pass those costs onto the buyer (taxpayers). I guess the 20 years of continuous growth that followed was a fluke.
GE used to make everything, and now they only make turbines.
I can't stress enough how much of a breath of fresh air Morning Brew is, I have viewed and liked a lot of your other content but this one is just so god damn on point, MB team has absolutely nailed summarising it in such an interesting way and in such a short video (relatively).
I recall reading MF's article (NY times I think) as part of a course in uni and my first thought was, what the actual fuck is he going on about!
How can someone make such a ridiculous proposition, corporations don't exist in a vacuum, in fact they are always sheltered and protected by the people directly and indirectly, how on earth can someones just go off and say, nup, forget the society that is literally your foundation and just focus exclusively on a single dimensional obligation to your shareholder because, screw common sense, I guess.
But as this excellent video points out, it took both sides to quash the working class, I don't think anyone really bought the absurd idea, at least not in the beginning, it was just a very convenient excuse at a time of turmoil, so the executives chose to just run with it, enabled by their ridiculous compensations which completely decoupled them from the woes of us mere mortals.
For what its worth, it is nice to see most of these companies turn into husks of their former selves and running into ground, in case of Boeing, literally (no offence to any of the victims intended)
Yeah MB is so great! I think it's because all of their videos focus not only on social issues but how sociology and economics mesh to create these companies and trends...and their nuanced. It's not a "capitalism = bad" channel.
I agree its so great to find an echo chamber which rebounds the sounds I've already been pre-determined to like, it makes it easier to bounce my own ideas back off myself rather than being challenged. I love the confirmation bias, and prepackaged, consumable content designed to slant my worldview to one very warped one. Hurrah!
@@zachariah7114 gotta love the sarcasm!
Hurrah!
Biggest thing you forgot at the beginning of a video was - fear of Communism!
Perhaps because Americans equate socialism (which was mentioned) with communism
She touched on it a little bit when quoting Milton Friedman. Milton believed that executives who were looking out for the interests of the people instead of the interests of shareholders and profits were obstructing the free market and ‘preaching socialism’. He probably considered himself a patriot 🤡
@@AlphaGeekgirl they do. If you ask them to differentiate them, they can't.
@@Saliferous not even Marx made a distinction between the two
@@YellowJelly13 you know how long ago Marx lived?
Right away you have 4 graphs that don't show what you're saying they show. 3 of them cut off before 1980, so they give no indication of when the trend started, and the first one doesn't have any notable change at 1980 compared to other places on the plot.
I graduated college in 1982 and I totally agree - that is exactly what happened. I was shocked that things were chaning so much just when I was starting to work for one of the big companies you identified.
The end result of these layoffs is the destruction of the social contract between employees and corporations. Employees are no longer blindly loyal. Quiet quitting, WFH, job hopping, etc. were once considered taboo, but now are openly endorsed by career coaches. Younger generations even look at socialism more favorably over capitalism after seeing massive, arbitrary layoffs.
I think you are being unfair to Milton Freedman. He also said that when government spending exceeded about 25% of GDP the government became a burden on growth. He was also against deficit spending as it debased the currency causing inflation.
If you want to blame someone for questionable corporatevpolicies, blame Jack Welsh the CEO of GE who as an ardent supporter of six sigma turned the whole manufacturing industry in to a bean counters paradise dedicated to cost reduction and little else. This also abandoned tge concept of Continuous Quality Improvement (CQI) followed by the Japanese car industry and hat is why we have Toyotas, Hondas and many other quality vehicles. Jack also diversified GE in to many other areas that showed profits due to financial trickery but ultimately nearly destroyed the corporation.
Reagan and his Republican followers of the 1980s and 90s also have a lot to answer for with their tax gifts to the rich and the Great Lie of the era - Trickle down Economics and a ravenous, wasteful Medical/ Pharmaceutical/ insurance industries.
Couple this with Deficit spending and America now pays as much to service the debt as they do for defence. Regards
Familiar face, different channel. Great video as always
Channel?
Cheddar. RIP@@_hellogan
Wonderful, informative, and eye-opening vid. Great job.
Financial obligations vs. moral obligations. To the employees and the community at large. Perhaps the issue is how do we quantify the moral obligations, especially over a short period of time?
The way Jack Welsh and his acolytes are running corporations reminds me of the way the gangsters in Goodfellas ran the Coconut Club- extracted as much value out of it and then burn it down without looking back.
How about LARRY FINK ceo of blackwater ?
@@zachariah7114 blackwater?
If a prospective employer wants to offer you a job in "The _______ Family" -- run away.
"Family" don't toss their kids into a pit when it's financially convenient.
I remember you from Cheddar, and I see you still keep your humorous deadpan touch (" Boeing ...😐"). Keep it up, Karin!
I remember reading about some of these people and not understanding that they were horrible human beings. Rest in pepperoni, gang.
Totally ignore the huge economic problems in the 1970s with stagflation.
This is quickly becoming one of my favourite channels. Thank you.
It’s amazing people who think that it’s in their interest to support the policies that have decimated the working class, like the people who support the politicians who support trickle down economics.
Tell me, has a poor man ever offered you a job?
Great video. A REAL topic to discuss instead of the noise that bombards us today.
THIS IS GENIUS. Why is this channel not popular 😭😭😭😭
I'm gonna share this
💯 agreed
This is a great video. Of course, corporate income distributive practices before the '80's had nothing to do with socialism - which would involve government forcing distributive regimes. In that era, a firm with difficulties could still cut pay or layoff people or otherwise reduce benefits. Milton Friedman is an example of an academic (economist) who delivered a few interesting academic results in his early career and then parlayed this into a speaking and writing career implying his achievements proved he already knew the answer to every question. It shows how fragile social norms are when the rich and powerful give in to contempt for their workers (or their voters).
He won the Nobel Prize in economics, but I’m glad to see you and this tart presenting are here to lead the country to the new socialist utopia. You’re far smarter than Milton.
buybacks make sense when the stock price is low and when other investment opportunities (such as internal projects) don't offer similar returns. Plenty of companies are way overpaying on their own shares, but that doesn't make buybacks categorically bad.
You know you made a good video when folks aren't even fighting in the comments. Nicely done, Morning Brew.
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You're right, with my current crpyto portfolio made from my investments with my personal financial advisor Stacey Macken , I totally agree with you
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Amazing video, I'm shaking with rage. You've earned a subscriber.
Starting a graph from 1980 and arguing every problem started there is quite a poor approach to building an argument. Would have been nice if you showed trends over a century for example and then made such a claim.
Might have been a great video to watch. But you lost your credibility in the first 30 seconds of the video. I call this intellectual dishonesty and don’t give screen time to such creators out of principle.
Of course it's intellectual dishonesty. To even apply the word "intellectual" to what amounts to a clear propaganda piece / a part of the MADCOM future we're headed in, is laughable.
Publicly traded is generally bad. Even Welch thought smaller shareholder pools were good.
Actually, one thing that turned out to have a bad effect was mutual funds. Previously, whether people were rich or middle class, they owned the stocks of a company directly and so could influence the company's CEO or Board of Directors directly. Now, most people have 'their' shares held by a mutual fund, which now, along with 'hedge funds', control almost everything, with the small or medium-small investor counting for nothing.
That's part of my point, though. A flood of hundreds of "investors" with no concern for the company itself. It forces the chasing of quarterly earnings bumps. These types of funders, don't typically buy shares at issue and leave as soon as the grass is greener elsewhere. Whether the company even survives is completely unimportant to them.@@CarlGerhardt1
Regarding stock buybacks, this is still a legal slightly-tweaked practice known in accounting terms as “Treasury Stock”. In layman’s terms: A company will purchase many of its own shares from shareholders if it feels they’re undervalued, when done on a proper scale amounts to the same effect that a stock buyback would in raising share prices, except that the treasury stock itself is meant to be illiquid. Considering the fact that CEOs can obviously still sell their personal shares, it just adds an administrative layer of red tape which has had an open loophole since its inception. You can still personally profit from it, it’s harder for the corporate entity itself to profit in the same way.
Fantastic breakdown, thanks for this
I can understand laying off bad employees but buying back stocks without investing in R&D , people and improving product is criminal .
I'm perplexed by the narrative of "things were great then these 2 guys ruined it." It seems like things were great, stuff happened so that by the 70s those post-war economics weren't working like they once did, and these 2 guys found new policies that worked better for the current economic climate.
In the future, if you are referencing 1980 as a “turning point,” you should probably include approx equal space before and after on your graphs. Putting it in the left edge doesn’t tell me if it’s a continuing trend or a new phenomena
Yes, if you start a graph at 1980 and show from there, it will diverge even if the trend predates 1980. Show the history from before and then I'll believe you.
Why show data that conflicts with your own argument? This isn't about a quest for truth, but guiding the goal into the pre-determined goal posts.
Google is free. Do you need help?
No wonder GE is at such a low point for the past 2 decades. Great video
Part of that was Welch's legacy, but a lot of it is just that Jeffery Immelt was an idiot, that seemed to make just about every decision wrong.
I am of the opinion that capitalism is the best of the economic systems BUT if you implement capitalism without a Christ/Biblical foundation you are going to have a system that sucks.
My reason being that capitalism on its own (like anything humans are involved with) will erode. And I think we are seeing this today: A heartless and soulless corporate landscape.
By having the economic system based on God's Word, you are confronted with "Love your neighbour as you love yourself" and "by this everyone will know that you are my disciples, if you love one another."
At the end of the day, nothing you do will be perfect because humans are involved. But I do think a better system is possible. This is evidenced by the fact that better times have existed!
Thanks for the video!
100% agree on the take on Welch, but Friedman is a misinterpretation. Every time somebody quotes Friedman they use that same sentence. His work is much broader and defends free market and the price system. It´s impossible to be perfect or correct on everything, so of course he could have said some stuff that, if read our of context, can create a monster.
Ngl the video title change really hooked me back in. Much more informative. The previous title sounded like a clickbait article.
I am not sure anyone can call Robert Allen of AT&T a protege of Jack Welch. He was slightly older than Jack Welch and his reason for the layoffs was based on both technology changes and deregulation which ended AT&T's almost guaranteed profit. Allen didn't understand the new competitive communication world and he and his cohort didn't understand how IP technology made AT&T's 'smart network' extinct. I enjoyed this video but I wanted to add my 2 cents about Allen.
Stock buybacks using debt 1000000% should still be illegal because price manipulation is exactly what that is.
I am also not a fan of buybacks in general, but have no solid reason why a company that can afford to shouldn't be allowed to other than a vague sense that it'd be better to spend that as R&D, on their employees, or payout dividends so the wealth generation gets taxed appropriately.
Boeing is a classic example of a company that's been Welched, consequently its planes fall out of the sky.
I bought this book on thos channel's recommendation. A real eye-opener
Way too much time spent on stock buybacks. They are a non-issue (they are a technical thing. They can be good or bad for the company depending on other factors).
Might want to spend more time on how Welch lied about the earnings numbers...
I have listened to many hours of Freedman. And this video is exactly the opposite of what it seems he was about. He taught that Capitalism was superior to any other ecomomic system, and that Government should have as little influence on business as possible.
That seems consistent with the quotes in this video.
Milton Friedman was a mixed bag of some very good ideas and very bad ideas. The negative income tax and volunteer military were great but shareholder supremacy was used and abused by guys like Jack Welch.
...its just that the policies he advocated create such positions. His type of market economics and anti-socialist tendencies was one of the drivers for US imperialism (and free market expansion) abroad, like Vietnam for example, where the draft was enacted. The income inequality and lack of intervention that creates poverty 'worthy' of receiving rebates was also informed upon his almost-Austrian school of thought. It's not a great idea to ascribe 'abuse' to what is clearly an expected consequence of his advocacy. Leftist groups have not shifted their position, and were vindicated. Can't beat the Keynes machine.
I haven't studied economics, but the way she describes it in the video doesn't connect. Profitable company increases its shareholder value, but they are still two very different things. These days the companies skip the healthy profit building that Friedman was talking about and jump straight into stock price manipulation. Serious investors don't do stupid things like closing R&D, because they know it will hurt them long term. It's the short term investors, and managers driven by annual bonuses, that seem to be the problem here.
@@milobem4458 Milton Friedman was a very academic and nuanced thinker. Guys like Jack Welch were just greedy and power hungry CEOs and took ideas that fit his vision and ignored everything else. It was a problem Friedman was aware of in his time and even addressed it on interviews.
@@lemonlite_Keynes is garbage and Milton Friedman had nothing to do with imperialism
@@milobem4458 Many people in those days became very cynical, perhaps because of the Vietnam war and Watergate, but they did. They took that into companies and said, YOLO, so let me get mine now. That pushed everything to the short-term and a lot of what you see today.
For a publication that has a newsletter that is all about perspective and nuance, you only give lip service to it. I can practically smell the principals of Friedman in this video. If you want to make a 2h documentary that covers all of the material that you covered today, without all the important bits sawed off, do it. I and millions of others watch those.
I love how everyone misses the most obvious answer as to why Ford gave more money to his workers and why GE was proud to pay taxes. people believed in higher moral authority (God) and they believed in their country.
Almost every large company has a job destruction department that has a budget and resourses dedicated to reducing headcount. It used to be this work was done by outside "consultants," but companies quickly learned it was cheaper to bring this in-house. AI tools will soon greatly empower these departments (if they haven't already).
I love Milton Friedman. He understood economics.
5:13
Subtitle: Jack Welch
My Brain: Kenneth Copeland.
The Air Traffic Controller strike was a national threat. The union involved should have stayed at the bargaining table. Strikes should be considered a “nuclear option” of last resort. Also, unions need to “take the pulse” of the businesses they are involved in, and make contract decisions based on that. There were a lot of strikes in the 1960s and 1970s that resulted in business closures.
My observation, memories, and opinion.
It might not be that simple. Production is still dependent on land-labor-capital, but there is a shift towards capital. Many areas do well without any human labor, or just a handful of workers as machines are just more cost-effective.
On the other side, this made production explode. Today a middle-class citizen in most countries lives a better life than a king just 200 years ago. Worktimes shrunk from 60 hours a week to 40 hours a week to more like 30 hours a week today. Well, unless you work for a US company which wants to waste 40+ hours of your time, expecting better performance from you.
So, capital creates capital, so the inequality grows and grows, but so far us, average Joes and Janes are not doing bad.
The real question is where does this trend lead. If the capitalists are willing to continue to share enough with the rest - then we'll work even less, maybe even none at all, and will have a lot of freedom still. If they go to extremes, then most of humanity will just starve in slums.
We need to make sure the later doesn't happen - we still have some control over our governments, and the governments still have some control over the capitalists. Let's just keep it that way, or the whole human civilization will stagnate and die, as a few hundred thousand inbred idiots won't be able to keep the civilization for long, and they will die out along with the rest.
In the 70s the average person already experienced the luxury of a king from 200 years ago. For most people it’s gotten worse since then.
@@aliannarodriguez1581entirely wrong. The average person today is miles better off economically than in the 1970s
@@ExPwner Most people I know who were old enough to remember the 70s well do not feel like the average person is better off now. The lower middle class has particularly lost ground, as they typically could afford a house, a car, and kids back then.
@@aliannarodriguez1581their feelings are completely wrong. We have the data and more people buy homes now than then. More people have cars now than then. You’re obviously blowing smoke. The data doesn’t lie.
Not INVESTING IN THEIR EMPLOYEES.....
STOCK BUY BACKS....
NO RESEARCH AND DEVELOPMENT.....OMG...
😱 OMG........THIS IS REALLY SAD.......
THIS UTUBE VIDEO MADE ME CRY. MY HEART OUT......
You didn't need to cover those faces. It was extremely obvious who would be revealed based on the descriptions. Even if you don't care about the overall economy or labor, these men were terrible for our productivity, as they preached destroying the economic engines that they inherited for short-term gains. There was no purpose to corporations except to liquidate their value as rapidly as possible to enrich the board, and if the corporate governance was not already broken, perhaps the shareholders would benefit too.
My opinion: What you're looking for is the Military Industrial Complex. Basically covert ops using misery as power & trade. GE was the largest Military contractor until it sold off those businesses.
My experience: Back in the 80s GE was recruiting me as a child to grow up and go work for KPMG. It is far more crooked then you can imagine.
Good work. Thanks for helping to open people's eyes..
One point to add is that share buybacks aren’t that special. Company with decent and stable cashflow can pay dividends, if they don’t plan to invest or hold cash. Buybacks are not that different for the company’s finance from dividends, except for shareholders’ preferences(cash, tax etc). Also the stock market does price-in buybacks vs. dividends rather efficiently.
Nice job but you should of included one more person that made a huge difference during this same time period and his name was Lewis Powell who wrote the Powell memo to all US corporations that bribing politicians with corporate money would make them even more powerful than they already were becoming. He also was the deciding vote on Citizens United (yes he was on the Supreme Court) and this unshed in a new era of corporate control over our now bribed government.
Well done video
It’s good in the short term, but it’s unsustainable in the long run. All these companies doing this are cannibalising themselves in the long run
MF gets misinterpreted all the time. Welch was a nut.
Great video about why work sucks! Reminds me of a recent book, The 7 Habits of Highly Dysfunctional Companies
Watching the Nelson Peltz vs Disney drama unfold, and thinking about your note on how technically CEOs dont have a sole obligation to the shareholders: unfortunately even if thats the case de jure, its not the de facto case, because at any given time institutional shareholders will gladly rally behind an activist investor with a vision to "make line go up".
Its incredibly disheartening and i dont see a way for the current system to ever return to a focus on longer term outcomes, since shareholders always want stock prices to rise "now".
The hood side of this is that I work for a start up and I just hit my numbers for the year by convincing a company to leave IBM and go with us. Thank god they stopped investing in their workers and products
I worked for a US bank who got the GE religion. Everything had to be seen through the optics of what would GE do. Which was basely cutting costs and getting involved in stuff you did not understand properly. One other group that deserves mention is management consulting companies. Charging high fees to write the report that the management wanted which was the answer to the ills was to cut people. Yes McKinsey I am talking about you.
Almost 45 years later, we're still waiting for something to trickle down, lol.
In the same way that I can appreciate that modern baseball management for being maximally efficient even if it makes the game aesthetically worse, I can appreciate that getting rid of corporate bloat and maximising shareholder value makes sense in the short-to-medium term even if it is corrosive to society
"legally bound to make profits no matter what" meant they are forced to compete due to the way laws are structured.
Government regulations doesn't help economics
That’s the job of government. You don’t want too much regulation but business requires trust and government enforces the standards that allow, for example, you to buy milk with confidence that it doesn’t contain dangerous bacteria.