Learned something new today...

One of my big everyday MUSTS is that I learn something new. It doesn't matter what it is, it can be something about myself or another person in my life, it can be something work related, it can be a new moral quandary or idea to ponder or it can be a historical fact that was unknown to me.

Today I wanted to share a bit of, hmmm, well economic history I ran across that I thought might interest a few of you. The article has sources for all it's facts - so no this isn't - fake news and the article has a populist agenda (populist in the sense of being in favor of the well-being of We The People - not populist in the sense of being on team Big Business Billionaires). [NOTE: that's a whole other thread - how modern day authoritarians are co-opting democratic language]

From 1945 until 1982, worker pay rose in tandem with productivity.

At that time, buybacks were rare, primarily because they were deemed a forbidden manipulation of stock prices.

In 1981, S&P 500 companies spent about 2 percent of profits on buybacks.

But after 1982, when the Reagan administration legalized stock buybacks, the connection between wages and productivity ended as corporate executives focused all of their efforts on increasing share value.

Last year, the S&P 500 companies spent 50 percent of profits on buybacks and 41 percent on dividends to stockholders. That left a pittance—9 percent. Corporations socked away some or all of that in overseas tax havens. Their workers, whose labor produced that profit, got virtually nothing.

www.alternet.org...

a reply to: FyreByrd

Here's the same info from a conservative source.

For most of the 20th century, stock buybacks were deemed illegal because they were thought to be a form of stock market manipulation.

But since 1982, when they were essentially legalized by the SEC, buybacks have become perhaps the most popular financial engineering tool in the C-Suite tool shed.

And it’s obvious why Wall Street loves them: Buying back company stock can inflate a company’s share price and boost its earnings per share — metrics that often guide lucrative executive bonuses. As Reuters wrote recently, “Stock buybacks enrich the bosses even when business sags.”

www.forbes.com...

It's no longer about the HEALTH of a business but about financial manipulation.

If your small business operated that way they would fail - as many do.

Richard Wolf and Yanis Varoufais both speak a lot to this disease of financialization. The former in the US and the later in the West as a whole.

www.rdwolff.com...
www.yanisvaroufakis.eu...

a reply to: FyreByrd

Which is why you should be investing in stocks instead of real estate or gold.

the DOW bull market all year last year was driven by stock buy backs


they gave them selves big raises this year

Great Post!!! And thank you!!!

I never had the source material to accompany the opinion ive had for years. Im currently an Engineer. Although I currently design machines, I started out by fabricating them, more specifically, welding them.
After finishing my tech school course (and following im my father footsteps), I went to work as an entry level welder in 2005. My fathers first year was 1976.
My starting wage: $14.50 (U.S)
My fathers starting wage: $18.00 (U.S.)
A difference of only $3.50, but add in almost 30 years of inflation, plus the elimination of pentions, stock options, and insurance benifits, now it comes out to someone making more than 3X the starting wage for the same job.
Not to mention the false statistics put out by Department of Labor and the other TPTB. For example, the average pay for a welder in Wisconsin (According to the State Department of Workforce Development) is $75,000 per year. I LMAO everytime I hear that! I have met a handful of Welders that make close to that, but they are doing the most difficult and dangerous jobs available and IMO, are still underpaid.
Meanwhile, after 5 years of engineering, Im still a lil shy of that $75,000 yearly income.....

MURICA!!!!

a reply to: Brian4real

it's because your lazy, you're younger obviously you didn't work hard enough

originally posted by: Brian4real
Great Post!!! And thank you!!!

I never had the source material to accompany the opinion ive had for years. Im currently an Engineer. Although I currently design machines, I started out by fabricating them, more specifically, welding them.
After finishing my tech school course (and following im my father footsteps), I went to work as an entry level welder in 2005. My fathers first year was 1976.
My starting wage: $14.50 (U.S)
My fathers starting wage: $18.00 (U.S.)
A difference of only $3.50, but add in almost 30 years of inflation, plus the elimination of pentions, stock options, and insurance benifits, now it comes out to someone making more than 3X the starting wage for the same job.
Not to mention the false statistics put out by Department of Labor and the other TPTB. For example, the average pay for a welder in Wisconsin (According to the State Department of Workforce Development) is $75,000 per year. I LMAO everytime I hear that! I have met a handful of Welders that make close to that, but they are doing the most difficult and dangerous jobs available and IMO, are still underpaid.
Meanwhile, after 5 years of engineering, Im still a lil shy of that $75,000 yearly income.....

MURICA!!!!

I've always been in a similar boat - my salary/wages - in inflation adjusted dollars - has remained the same since I started working. Now I have about 4 times, or more, the responsibilities but have seen little real income growth.

Thanks for posting.

originally posted by: toysforadults
a reply to: Brian4real

it's because your lazy, you're younger obviously you didn't work hard enough

I do hope this was scarcasm.

a reply to: FyreByrd

I just wanted to iterate that perspective before 19 right wingers come in here and say that people just don't want to get their hands dirty even though a large portion of us "dumb lazy young folk" are actually out there everyday building

a reply to: FyreByrd

Trickle down economics.

My opinion of Regan.

I love Ronald Regan the man. But he was not intelligent enough to understand the BS that was being fed him by his wealthy constituents. They swayed him with fine sounding arguments.

He was one of the great orators of our time. A true sophist and statesman.

But his policies greatly accelerated the downfall of the US economy, having no long term possitve effects.

With about 90% of the work force working for small business, and most likely your wielding work too, what does that have anything to do with stock buy back affecting pay when these companies do not have stock?

a reply to: Xtrozero

Most of the goods that end up in the hands of the consumers comes from the traders who are part of the 1%.

The 90% in essence still work for the 1% because without the traders these business could not exist. Those who control the banks and movement of goods and services control the economy. The buybacks put more money in the hands of the shareholders and falsely props up the stocks value.

At some point there will be a correction. Remember the housing bubble. Imagine that on a much larger scale. This is a problem.

a reply to: FyreByrd

I agree that workers should see more of the profits of their labors, but I have a hard time with the idea that the Govt. should be able to stop people from buying back the stock in their own company.

Personally, I wouldn't mind seeing the stock markets just go away altogether. I'd be will to bet in the beginning it was a scam cooked up between the banks and the old big tycoons to fleece people out of their money.

originally posted by: watchitburn
a reply to: FyreByrd

Personally, I wouldn't mind seeing the stock markets just go away altogether. I'd be will to bet in the beginning it was a scam cooked up between the banks and the old big tycoons to fleece people out of their money.

Yes, yes and yes. It helps them buy and strongarm competion. And to some degree it allows them to dictate who will be successful and who will fail.

originally posted by: watchitburn
I agree that workers should see more of the profits of their labors, but I have a hard time with the idea that the Govt. should be able to stop people from buying back the stock in their own company.

Then maybe disconnect the notion that the company is a "legal person"?

originally posted by: IgnoranceIsntBlisss

originally posted by: watchitburn
I agree that workers should see more of the profits of their labors, but I have a hard time with the idea that the Govt. should be able to stop people from buying back the stock in their own company.

Then maybe disconnect the notion that the company is a "legal person"?

I don't have that notion...

But a company is someone's property, and the gov't telling someone how or when they can sell parts of their company is a problem.

a reply to: watchitburn

The slippery slope cuts both directions.

Like who are the Government to tell companies they cant pollute the air to save money?

No?

Yes?

But they can pollute their company to save money?

Polluting the air is No because it hurts people, things. Well polluting ones own company hurts the workers, which trickles up to hurting the whole economy more and more (unless you're a 1%).

originally posted by: watchitburn

originally posted by: IgnoranceIsntBlisss

originally posted by: watchitburn
I agree that workers should see more of the profits of their labors, but I have a hard time with the idea that the Govt. should be able to stop people from buying back the stock in their own company.

Then maybe disconnect the notion that the company is a "legal person"?

I don't have that notion...

But a company is someone's property, and the gov't telling someone how or when they can sell parts of their company is a problem.

A company and an individual are part of society. When a company becomes so large that it becomes detrimental to society that company should be broken up into smaller pieces by that society.

Society should protect itself from predators and their monopolistic practices. We used to enforce these laws, but we ignore them now. We were far more prosperous before we ignored those with the forethought to create such laws.

originally posted by: TonyS
a reply to: FyreByrd

Which is why you should be investing in stocks instead of real estate or gold.

Do they take cow chips?

a reply to: IgnoranceIsntBlisss

disconnect the notion that the company is a "legal person"?

Oh you naughty man, coming to spoil the party again.

I'm waiting for the day when Directors are charged with capital offenses and commensurate penalties.

One can dream of a just World