dagblog - Comments for "U.S. Treasury Bites Labor at GM"

hahahahahaahahah

Richard Day — Sat, 18 Feb 2012 22:55:30 +0000

In reply to How many folks on SSI have HD

hahahahahaahahah

How many folks on SSI have HD

kyle flynn — Sat, 18 Feb 2012 20:00:51 +0000

In reply to Bacon and a number of meats

How many folks on SSI have HD 72" TV panels?

Ask Trope. He knows all about that stuff.

Thanks much. Marjorie Kelly,

AmericanDreamer — Fri, 17 Feb 2012 22:09:45 +0000

In reply to Depressingly, no. I looked

Thanks much. Marjorie Kelly, in her book The Divine Right of Capital, maintains that the doctrine of shareholder supremacy, whereby corporate managers have a fiduciary responsibility to maximize shareholder return, combined with the treatment on corporate balance sheets of worker pay and benefits as, of course, costs (often the largest single line item) it's pretty clear that workers' economic security interests are often not going to fare well.

Kelly started off believing in a philanthropic approach to social change before concluding that within the U.S. system, the above dynamics create a basic structural problem that requires addressing, by making shareholder interests one among a number of other interests--including communities, workers, environmental protection--corporate governance may or must take into consideration in their decisions. To the extent the legal system makes corporate decisionmaking 'all about the shareholders' the kind of destructive and probably unsustainable dynamics, along many dimensions, that we've seen in this country seem inevitable. A society that wants to become healthy and sustainable needs a more balanced approach than we have now.

Depressingly, no. I looked

Michael Maiello — Fri, 17 Feb 2012 21:37:57 +0000

In reply to This is a broader question

Depressingly, no. I looked on SSRN.com but the academics only seem to be interested in executive comp and stock performance, not total worker comp or compensation costs.

This paper makes the (kind of obvious) argument that layoffs in general have a negative effect on stock prices (because they tend to show that a company is in trouble) but that layoffs as part of a planned restructuring can have a positive effect.

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=952768

As to your other point above, about the multiplier effect of higher worker salaries vs. the Treasury taking a loss on its GM stock -- it might not really even be an issue, despite what I said before. It's not like the Treasury can be forced to sell. It doesn't face a margin call. Why can't it wait another 5 years? Or even 10? Does it really need to get out of GM stock faster than the U.S. got out of Iraq?

This is a broader question

AmericanDreamer — Fri, 17 Feb 2012 21:00:41 +0000

In reply to And I guess I should add that

This is a broader question than your post addresses, but are you aware of any empirical work that has been done that shows a relationship between share price increases and information becoming available that workforce and/or worker compensation cuts will be made?

It would be interesting to

AmericanDreamer — Fri, 17 Feb 2012 20:50:15 +0000

In reply to And I guess I should add that

It would be interesting to calculate the multiplier stimulative effect of various types of compensation increases for the workers, versus the loss to the Treasury of selling the shares before it wants to. The number of eyes that see yahoo news blips must be huge--I've seen a few lately that are referencing how well GM is doing and I think one suggesting that the Detroit area is doing better. Of course my opinion of yahoo news teasers is that they are about as accurate a description of what is in the article itself as...well, fill in the blank among items for sale at your local grocery store's checkout magazine rack. Even if former tpmcafe nice guy Andrew Golis is still there. (I'm sure Andrew doesn't do the teasers. :<))

And I guess I should add that

Michael Maiello — Fri, 17 Feb 2012 20:05:47 +0000

In reply to The line, so it goes, is that

And I guess I should add that the problem here is that the government wants GM to get its stock price up over $50 so it can sell its stake at a profit and not take a loss on the bailout. It's silly policy. Far better for Treasury to take a loss now for better long run economic results.

The line, so it goes, is that

Michael Maiello — Fri, 17 Feb 2012 20:04:33 +0000

In reply to Wasn't the informal

The line, so it goes, is that despite record profits the company didn't meet other financial metrics. But so far as I can tell, those all had to do with cost cutting in the European ops, which means that workers here are suffering for management's inability to bring down costs at Opel. Maybe they should divest Opel and give the proceeds from the sale to the US workers.

Obama's chance was when the government owned a majority of the company. Still, as a one third shareholder, it should have enough influence to block these pay cuts to the very people who turned GM around.

Wasn't the informal

AmericanDreamer — Fri, 17 Feb 2012 19:23:40 +0000

In reply to U.S. Treasury Bites Labor at GM

Wasn't the informal understanding as to worker pay and benefits that when the company they work for is profitable or productivity improves, workers' compensation is "supposed" to rise more or less in tandem? That such compensation increases are non-inflationary when they do not exceed productivity increases? And, what is more, deserved, under the accepted rules of the game?

Is the obliteration or shredding of that informal understanding (if that's what it was; question whether in the absence of unions and a credible unionization threat would there have been any such understanding, informal or otherwise, during the heyday of the growth of the US middle class from roughly 1945-1973?) at the crux of the gross economic and political power imbalances we've arrived at?

If not a resurgent union movement, what other institutional force or forces could potentially restore some sort of power balance between most of the corporate and political decisionmaker classes and the working stiffs in this country?

Didn't Frederick Douglass get it just right, if we allow that for many of our fellow citizens, economic tyranny in our day--let's define for purposes of this point as arbitrary, unnecessary cuts to pay and benefits where companies or employers are performing well or are not compelled by revenue losses to make cuts somewhere--is more onerous than any political tyranny they experience?:

Power concedes nothing without a demand. It never did and it never will. Find out just what any people will quietly submit to and you have found out the exact measure of injustice and wrong which will be imposed upon them, and these will continue till they are resisted with either words or blows, or both. The limits of tyrants are prescribed by the endurance of those whom they oppress.

Has anything changed since then to make him less correct? The Obama Administration gets blamed sometimes for not fixing things it has limited, or no, ability to fix. Couldn't it make this situation you write about right, at least? If it wanted to? If it were committed to the middle class, as it presents itself in its campaign appeals?

Bacon and a number of meats

Richard Day — Fri, 17 Feb 2012 16:32:43 +0000

In reply to I'm stunned that people think

Bacon and a number of meats have doubled in price in the last couple years.

Eggs have doubled after their price fell about 4 years ago.

Bread? Bread has doubled in price.

Sugar doubled, wheat is up....

And of course there is the gas pump price which could get the dems in real trouble.

Yeah there is inflation. But I suppose computers and ipods...they all get cheaper. Although are they really cheaper when the monthly on-line bills come in?

SSI and other payments went 3 years without COLA. How many folks on SSI have HD 72" TV panels?