It makes me wonder yet again what the bleep is happening in this world. With unemployment somewhere near 10% (and higher among Blacks), the service economy in the toilet, and parents and student anxious about returning to school, why is the market up?
Wall Street pundits repeat the mantra, "Wall Street is not Main Street" often enough to explain why the price of a stock going up when a large company announces yet another huge round of layoff. The company has just reduced expenses why shouldn't the profits increase?
I stumbled over a description of Benjamin Graham forcing Northern Pipeline Company to distribute its "excess cash" to shareholders in 1927. The idea of excess cash is interesting for several reason, one of which is how one decides what excess is.
At one time in the mythological economic past the stakeholders involved the company, the stockholders, the employees, and communities. If one imagines communities where most of the jobs were dependent on a local employer you get the idea. The owner and his family had to face employees in the town. There was responsibility and face and pride involved.
Change that to a board in a far off city who feel beholden only to shareholders and the difference becomes in focus to the detriment of the workers.
Why should employees feel a loyalty to a company whose only loyalty is to the faceless group who bought their stock?
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