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Why Does the economy suck... Section 1 Exhibit A: Dodge v Ford circa 1919

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posted on Apr, 30 2017 @ 09:15 AM
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Often I hear and read common misunderstanding of how business and the economy works, why it's broken and how it should work. So I will be presenting a series of threads discussing why so many are wrong.

Exhibit A:

Case briefs Dodge v Ford 1919



Plaintiff shareholders, Dodge et al., brought an action against Defendant corporation, Ford Motor Company, to force Defendant to pay a more substantial dividend, and to change questionable business decisions by Defendant.


In this case the defendants Ford were making choices that were more beneficial for their employees and customers.



Defendant corporation was the dominant manufacturer of cars when this case was initiated. At one point, the cars were sold for $900, but the price was slowly lowered to $440 – and finally, Defendant lowered the price to $360. The head of Defendant corporation, Henry Ford, admitted that the price negatively impacted short-term profits, but Ford defends his decision altruistically, saying that his ambition is to spread the benefits of the industrialized society with as many people as possible.


Here.. Ford wanted to purvey altruism and expand his brand to create a future larger market. Incredible business acumen.



Plaintiffs are entitled to a more equitable-sized dividend, but the court will not interfere with Defendant’s business judgments regarding the price set on the manufactured products or the decision to expand the business. The purpose of the corporation is to make money for the shareholders, and Defendant is arbitrarily withholding money that could go to the shareholders.


Here... a few things that changed the future of our entire country happened.

The shareholders are now more important than the workforce and customer and defendant must now increase profits at all cost creating the infinite growth paradigm ruining our economy.

A cultural choice was made through abuse of government interventionist policy rather than allowing the free market to dictate the future choices of investors on weather or not they would choose to invest in companies making choices similar to that of Ford's.

This is the main court ruling that has brought us to where we are where people are making essentially slave wages while the companies who go public are completely beholden to the shareholders with little to no accountability to their employees and customers.

Soon I will be presenting Exhibit B: What is the free market and how is it suppose to work.

Reference material:

pages.law.illinois.edu

Wiki


edit on 30-4-2017 by toysforadults because: (no reason given)




posted on Apr, 30 2017 @ 09:27 AM
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While I agree with you in this case, I think it is just the tip of iceberg.

There are whole industries that are devoted to skimming the labor of the sheep (where labor=$). They produce nothing. They mine nothing. They manufacture nothing. They exist solely off of the blood of their host. They are parasites. The more power and lobbing power these entities have, the more they consume from the host. I think the economy sucks because they have consumed a bit too much blood. The host is getting sick.



posted on Apr, 30 2017 @ 09:32 AM
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a reply to: toysforadults

What solutions would you advocate?

I would suggest radical changes. No more .inc. No more public companies. Take away the power to siphon off the money of a company to people that have no stake in the business other than they purchased company bonds or shares. Keep the profits within the company, either through expansion or employee wages, maybe by even giving back to the community in which they operate.

Remove the ability of the vampires, the parasites to siphon the productivity of a company in the hand of the few. Keep the excess of labor local. Grow communities. Decentralize.



posted on Apr, 30 2017 @ 09:32 AM
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a reply to: toysforadults
In answer to your thread start another on this.
1919 heh, Ford and Dodge, that's nearly 100 years ago just how come they have never moved on significantly with the petrol combustion engine?
We've put a man on the moon but what have the motor companies done? . Oh yes, fuel injection, computerized timing blah, blah, blah.
More comfort, in car entertainment, a car that drives itself blah, blah blah. And you still have to pay through the nose for it.
But what about the running economy MPG? What about longevity of the product? About the same as 1919.



posted on Apr, 30 2017 @ 09:33 AM
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Very good thread. Henry Ford was pretty upset in the end, he tried to give affordable transportation to people but in the end his cars that were reliable and able to last many years were being scrapped for newer styles. His own company was starting to do this. That was the beginning of the end, people were no longer satisfied with just having a mechanically sound vehicle, this was the beginning of planned obsolescence as a major factor in society.



posted on Apr, 30 2017 @ 09:37 AM
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originally posted by: crayzeed
a reply to: toysforadults
In answer to your thread start another on this.
1919 heh, Ford and Dodge, that's nearly 100 years ago just how come they have never moved on significantly with the petrol combustion engine?
We've put a man on the moon but what have the motor companies done? . Oh yes, fuel injection, computerized timing blah, blah, blah.
More comfort, in car entertainment, a car that drives itself blah, blah blah. And you still have to pay through the nose for it.
But what about the running economy MPG? What about longevity of the product? About the same as 1919.


We need to haul stuff and drive in this society. We really did not need to put a flag on the moon. We were almost out of debt as a country when they decided to do the moon trips, it was just to boost people's attitude towards our country. It had no real need and it started us onto a path of national debt again. We use cars everyday to get to work and for food transportation. That is way more necessary than going to Mars or the moon again.



posted on Apr, 30 2017 @ 09:49 AM
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a reply to: ClovenSky




What solutions would you advocate?


I advocate for the government to stay out of business.

If the shareholders make a bad choice they pay for it. In the future shareholders will make better choices.



posted on Apr, 30 2017 @ 09:49 AM
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a reply to: rickymouse
You don't get what I was saying. It makes no difference what you or I think or want THEY decide what they will offer you and that includes keeping the price of cars, fuel, insurance etc. high and keeping ALL money saving (on your part not theirs) devices off the market never to see the light of day if it conflicts with their profits.
The reason for the moon reference was to point out the technological advancements in that field BBUUUTTT what advancements have the car industry given us? Minor, and I mean minor benefits nearly all in their favor.



posted on Apr, 30 2017 @ 10:18 AM
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a reply to: toysforadults

Could there be the possibility that the shareholders are part of the problem?

They buy in while the company is profitable. Make the company provide divined payments and short term profitability decisions at the expense of long term sustainability. Trade our their shares at the appropriate time from insider information. Company implodes. Profit. They do not suffer from their bad decisions.



posted on Apr, 30 2017 @ 10:21 AM
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a reply to: ClovenSky

The shareholders aren't the problem, the problem is the government putting it's greasey fingers into the mix and telling Ford what to do.

There needs to be risk involved for it to function properly.


edit on 30-4-2017 by toysforadults because: (no reason given)



posted on Apr, 30 2017 @ 10:22 AM
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a reply to: ClovenSky

Are you talking about banks, derivatives?



posted on Apr, 30 2017 @ 10:28 AM
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a reply to: crayzeed

I agree with MPG.

But cars need very little maintenance now, compared to just 30 years ago.

They last many times longer and rust alot less. A car with 100,000 miles is not going to the junk yard, it is basically 1/2 used.

Could they be better of course. I would love to see a 100 MPG car that lasts 300,000 miles that will not rust. I would also like to see powertrain swap out tech that only takes a few hours with easily reached couplers and hydraulic style disconnects for gas/brakes.
edit on 30-4-2017 by seasonal because: (no reason given)



posted on Apr, 30 2017 @ 10:32 AM
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a reply to: ClovenSky

I think it is lack of leadership from the CEO. The lack of vision is staggering. A diamond in the rough is Tesla. The company defies reality and is still viable. This shouldn't be, but it is. The company seem to be looking at long term sustainable steps to grow.
But Musk gets a 1,000,000$ tax payer check in the mail, EVERY DAY bet that helps too.



posted on Apr, 30 2017 @ 10:35 AM
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originally posted by: toysforadults
a reply to: ClovenSky

The shareholders aren't the problem, the problem is the government putting it's greasey fingers into the mix and telling Ford what to do.

There needs to be risk involved for it to function properly.


Uh I think the shareholders were the ones who brought the lawsuit to the government in the first place, though?



posted on Apr, 30 2017 @ 10:36 AM
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originally posted by: toysforadults
a reply to: ClovenSky

The shareholders aren't the problem, the problem is the government putting it's greasey fingers into the mix and telling Ford what to do.

There needs to be risk involved for it to function properly.



I completely agree we need to get the government out of the regulatory business. They have proven to be nothing more than enablers for bad management decisions, especially when those businesses contributed to the 'right' people. There should have been a massive amount of bankruptcies and business failures resulting from the last depression in 2007/2008. But they didn't fail. Our benevolent government jumped in and saved these wonderful people that are 'just doing gods work'. GGGGGGGRRRRRRRRR. We probably wouldn't be going back into another depression this soon if these people were allowed to just fail.

Maybe you are correct. Maybe getting the government out of businesses is the answer and everything else will work out in the end.



posted on Apr, 30 2017 @ 10:40 AM
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originally posted by: crayzeed
a reply to: rickymouse
You don't get what I was saying. It makes no difference what you or I think or want THEY decide what they will offer you and that includes keeping the price of cars, fuel, insurance etc. high and keeping ALL money saving (on your part not theirs) devices off the market never to see the light of day if it conflicts with their profits.
The reason for the moon reference was to point out the technological advancements in that field BBUUUTTT what advancements have the car industry given us? Minor, and I mean minor benefits nearly all in their favor.


I got what you were saying and agree with that part of it. But we have overshot reason-ability with technology. They have cut costs to make things easier to build also, but doing so has actually reduced any gains in gas mileage sometimes. Like sealed bearings on the wheels. You could put the car into neutral and push a car to the gas station blocks away by yourself when they had regular bearings. Now, try that, you can't push them a half a block. I know from experience. The cost of a sealed bearing is around a hundred bucks average, the cost of a regular bearing race and seal was about fifteen, the brake jobs usually included repacking the bearings and it wasn't that expensive. The fact that the car was more free wheeling means less resistance which means better gas mileage potential.

Just think how good gas mileage would be if you took a high compression sixties engine and dropped a moderate fuel injection system on it. I bet you would get half a million miles on that engine and thirty miles per gallon with a big block eight cylinder engine coupled to a decent overdrive transmission like they made in the mid eighties.

But deathdating is a big part of cars nowadays, also the cost of failing sensors makes people trade cars in or buy insurance packages to cover those costs. Big business sucks.



posted on Apr, 30 2017 @ 10:41 AM
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originally posted by: seasonal
a reply to: ClovenSky

Are you talking about banks, derivatives?


Sorry, I mean to say dividend payment and not divined payments. Derivatives? Oh boy, there is another complete and ugly scam. Our wonderful MBS products sure taught us a lesson, didn't they? It is great that we are not starting to bundle these loans from other structures together, say like auto loans and credit card debt. That would never cause any chaos.



posted on Apr, 30 2017 @ 10:54 AM
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I have recently been working at Ford field, home of the Detroit Lions. Right in the heart of the city. I am not from that area. 2 hour drive 1 way.

We were talking the other day and I guess Henry Ford was not a nice person to his employees. Beatings were discussed and even the nazi word.



posted on Apr, 30 2017 @ 11:06 AM
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originally posted by: tinner07
I have recently been working at Ford field, home of the Detroit Lions. Right in the heart of the city. I am not from that area. 2 hour drive 1 way.

We were talking the other day and I guess Henry Ford was not a nice person to his employees. Beatings were discussed and even the nazi word.



Interesting....

Henry Ford didn't pay $5 a day just to be nice


In 1914, Ford began paying his unskilled workers $5 a day, about twice the norm, and said he paid them so much so they'd have enough to buy his Model T's. The move infuriated other factory owners and led to huge headlines and hiring lines. It also created a legend that still lends credence to the idea that paying higher wages than the market demands increases the size of the middle class, the buying power of laborers and the prosperity of the companies that pay those inflated wages.

The only trouble is, that legend isn't true.



Ford did pay those wages, but about half of the money was profit sharing, and the employees had to prove they were living upstanding and moral lives to get that extra pay. The automaker, with his anti-Semitism and intrusive social engineering, was deeply kooky.

But according to Stephen Meyer, a labor historian and professor emeritus at the University of Wisconsin-Milwaukee, Ford didn't pay so much because of beliefs about enriching workers.

He had no choice.

According to Meyer, in 1913, the year before Ford doubled wages, the turnover rate at his plants was 370 percent. In contrast, Walmart's turnover rate today is said to be 100 percent annually, still a very high number by today's standards.



posted on Apr, 30 2017 @ 11:12 AM
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a reply to: ClovenSky

You seem have a good handle on the financial stuff. The only handle I have is the feeling of getting boned at each and every opertunity by some jack 0ff in a suit. I did understand the mortgage bundling goat screw, but still don't understand why someone did get a free stay in a prison. Didn't Moody rate the mortgage bunding investments AAA?
Seems like, well I will stop at this point. You more than I probably understand this subject better.



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