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  •  Also, the injection of people who don't have (4+ / 0-)
    Recommended by:
    wader, BlackSheep1, zett, se portland

    any direct interest in what a company is doing becoming the majority of shareholders in the company (via mutual funds they let someone else broker for them) increases the corporate mentality that the only purpose a company serves is to increase shareholder profit, regardless of what products or services the company sells.   "I am investing in this company because I think they've got a good product that will work" or "I'm investing in the company because I think their services will be in demand and I like what they do" are no longer what the majority shareholders are thinking.

    Now what the majority of shareholders are thinking is, "I hope the number on my 401K statement this month is a big positive number", without any knowledge or care what the actual companies they've invested into are.  That's the job of the fund manager, not them.

    The connection between "shareholder with stock in the company" and "knowledge of what the company does" has been broken by the fact that most shareholders are just people with retirement funds.

    So companies become beholden to a mass, faceless crowd of people who need their stock to show a profit in order to be able to retire.  So companies make decisions that are stupid if their long term goal was preservation of the company, but smart if their goal was to make a quick buck and get out before the corpse of the company swallows them up.  

    Thus increasing the number of people who are now retired early as their jobs withered and died, and thus making the problem that caused that death even worse.

    •  I'll say it again: tax every share of every sale (4+ / 0-)

      for one half of one tenth of one cent, real US money, every time it is bought or sold. That's right, tax both the seller and the buyer. If the buyer, in 18 months, can prove he still has ownership of that stock, return 1/4 the tax money (now tax-free) to the buyer. Repeat at 18 months, and if the buyer still has the stocks 18 months after that, return the other half.

      But the seller -- any seller -- must always pay the tax on every share.

      Stop churning shares via algorithm.
      Stop the threats to the American way of life by the handful of greedy rich.

      LBJ, Lady Bird, Anne Richards, Barbara Jordan, Sully Sullenberger, Ike, Drew Brees, Molly Ivins --Texas is no Bush league! -7.50,-5.59

      by BlackSheep1 on Tue Nov 20, 2012 at 12:00:33 PM PST

      [ Parent ]

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