Citizens Lose Power as Corporations Buyback Stock

[Zythryn]

Whoo! I don't get to make my own claims?! Talk about a strawman!

 

You are more than welcome to make any claim you like.

 

I was discussing your original claim that "Citizens Lose Power as Corporations Buyback Stock".

 

That is the one I disagree with and was discussing.

 

As for the idea that a very small number of people have undue influence in our government due to the power of lobbyists, that I agree with.

 

Perhaps you would like to start a new thread with a subject line that represents your new claim?

[coberst]

Zythryn

 

That is the problem you get into when you do not read beyond the title. If you had read beyond the title you have recognized that you were not speaking to the essence of the post. In fact if you had read any of my responses you would have recognized the error of your ways.

[Turtle]

Turtle

 

can you clarify and explain. Why so cryptic? Do you have any reason for making your statement?

 

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[Buffy]

My claim is that there is an oligarchy consisting of less than ten thousand individuals who exercise great control on public policy in the USA. The individuals making up this oligarchy are the leaders of the large corporations, banks, utilities, media, think tanks, universities,etc. (basically the major institutions).

coberst: I've read through the thread, and I'm trying to find the link between the title, and what you state in this excerpt, which really seems to be your main point.

 

Its important to realize that while stock buybacks do often shift the ownership percentages toward ownership by managers, exactly the opposite can happen (e.g. Enron and their ilk where the boards voted for stock buybacks that the managers and board members took advantage of *before* the stock tanked!). This one cuts both ways, and "buybacks" in *most* cases are taken advantage of by both insiders and outsiders.

 

The *primary* reason for stock buybacks is to increase the share price on the market. In theory, a smaller number of shares is chasing the same Net Income/Assets, so the price goes up. Occasionally it is used as a tactic to avoid a hostile takeover, but this almost never works.

 

The important thing to remember about the number of shares outstanding is that it is meaningless so far as "ownership" goes, because in an open market, anyone can buy stock, and it will be traded until the company is taken private, no matter *what* the "managers"/"board" do. If those "insiders" own 50% of the outstanding stock minus one share, there is the risk that the can be bought out and taken over.

 

Related to this, the most important issue for almost all corporations is "liquidity" of the outstanding stock. If share price is too high, it makes it harder for investors to buy and sell the stock, that is why the ideal share price is actually less than $100 or even $50/share. There are of course exceptions like Berkshire Hathaway, who's Board (i.e. Warren Buffett) likes to limit ownership to the very wealthy, and thus keep the stock *very* illiquid. This is meaningless again, because of that 50%-1 share, allows *anyone* with enough bucks to take over at any time.

 

Now as to concentration of ownership among a small minority of the population, this is in existence today, and its not a good thing at all, as you point out. However, it really has nothing to do with share price, because while corps can buy back stock and become Berkshire Hathaway-like, its a *really* bad idea, because unless you are *very* desireable, you can see your value crash because no one wants the stock, even if you're doing well!!!! Thus corporations have a *significant* incentive to *limit* buybacks, and as a result, this is not a "trend" that leads to less say by Citizens.

 

I agree that the concentration of assets is a very bad thing, but there's no tie I can see between that trend and stock buybacks...

 

Treasury Stockade,

Buffy, M.B.A.

[Michaelangelica]

Citizens Lose Power as Corporations Buyback Stock

Corporations are “spending record sums repurchasing their own stock” so says the Wall Street Journal.

What happens when buyback happens? I suspect many things happen when this happens; one important thing that happens is that corporate management gains greater power.

Great power in America resides in America’s large institutions. “Power is not an attribute of individuals, but of social organizations.”

 

I agree it is scary the amount of power corporations have gained since 1945.

They now have more clout than many countries and have no responsibility to any one. No "one man one vote' applies.

It is really a new stage of social evolution.

Not one that I am enamoured with as many corporations have proved themselves unethical, dissembleing, avaricious and deceptive

[IDMclean]

Slowly but surely the power-economic division will colless once again into a point.

 

Currently there is a mix of seperate Power-Economic model votes. Different standards really. The dollar, and Elections. The dollar in my opinion is gaining more power that the Electorial vote. Just look at the Oil economy. Completely out of control, and all because of these little bits of paper we exchange everyday.

 

Really they mean nothing, but we treat them as if they were a child, a new life, precious and full of awe. The reality of this thing, some call currency, is that it is nothing, and given time we will realize the bankruptcy of this disingenuous concept.

 

One day we will wake up from this dream and realize, that truely all we need we have. That all we have should be shared.

 

All I needed to know I learned in kindergarten.

[coberst]

Buffy

 

My OP was designed to illuminate ‘power in America’. America is a very powerful nation and a vast amount of that power rests in our corporations. The power of these corporations rests in the hands of the corporate leaders. The CEOs run Corporate America and Corporate America runs America.

 

One might think of a corporation as a bulldozer. A bulldozer is very powerful and functions through the will of the operator. If you add all these powerful machines together you see the power in America rests in the hands of a few thousand operators, i.e. CEOs.

 

These CEOs together with other leaders of the major institutions in America exercise their power through determining public policy. These few thousand form an oligarchy that sets public policy and determines who can run for elective office. They control who can run for elective office by furnishing money to those they select. No politician can be a successful politician without big money. Most politicians get their big money from big business.

[Buffy]

My OP was designed to illuminate ‘power in America’....

I agree with *everything* you say in this last post *except* that I call into question this particular line. If your intention is to try to gain interest in the conlclusion that corporations have too much power, then it would be *much* more effective to draw attention to it with a point that was strongly valid. Unfortunately, citing "stock buybacks is a primary cause of concentration of power" is not supportable, and that leads observers to discount all of the rest of your argument.

 

A well placed rifle shot is usually more effective in debating that a shotgun blast. :rolleyes:

 

Cheers,

Buffy

[IDMclean]

"stock buybacks is a primary cause of concentration of power"

 

I don't think Coberts said that. I doubt that Coberts is daft enough to believe that any complex system such as Socio-economics has any one primary Cause.

[Buffy]

I don't think Coberts said that.

Be careful...it will bite you: read the title of the thread...although its obvious to me that the purpose of saying it is to draw attention to the general issue of concentration of power, and I think coberst is quite clever for doing so and I tip my cap to him on that point!

 

Really the best way to justify the statement in the title is to say that the two might be correllated, but there is not cause-effect relationship. Of course once you do so, it creates cognitive dissonance in the intended audience because it does not back up the more general claim that various nefarious actions are the cause (sole, primary, secondary, it doesn't really matter) of concentration of power. We all know they are, but the one proof point provided is the one that isn't correct doesn't help in convincing the undecided...that's my only point!

 

Thanks coberst, for contributing a very interesting thread!

 

Thinking: unfortunately its only a good idea,

Buffy

[Michaelangelica]

Be careful...it will bite you:

A slayer who bites ? . .nah

 

Maybe they are buying back their own stock because they have run out of things to buy? (small inovative companies, executive porches etc)

[coberst]

Buffy

 

Look at how many people clicked on my thread “How we learn”. These threads have to have something to catch the whim of the viewer. When ever I do not give a good title to a thread few people will click on and viewer will respond. Everything needs a ‘spoon full of sugar to make the medicine go down’.

[Buffy]

When ever I do not give a good title to a thread few people will click on and viewer will respond. Everything needs a ‘spoon full of sugar to make the medicine go down’.

I know, but in this case its a situation of Mary Poppins singing about sugar and filling the spoon with lemon juice. Ya get a *strong reaction* but its *effect* can be the exact opposite of what you want which is to have them take your "real" argument seriously! :)

 

As a marketing maven, I even practice the notion of "negative publicity is better than no publicity," but it sure can blow up in your face... I doubt anyone remembers your point from the Lipstick thread... :cup:

 

Hang in there coberst, I enjoy many of your threads...

 

Contrarily Contrarian,

Buffy

[coberst]

Buffy

 

I think that Internet forums are a good place to raise the consciousness of people but not a place to gain knowledge. If a person is not conscious of a matter, i.e. focused his or her attention on the matter, that person will never become knowledgeable of the matter. Consciousness raising is the first and major problem when introducing a new idea to people.