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BlackRock’s Message: Contribute to Society, or Risk Losing Our Support

146 points by lnguyen 9y ago

jamiethompson 9y ago
The same BlackRock that's just made a killing short selling shares in the failed UK public sector contractor Carillion?
- addicted 9y ago
  Maybe the UK govt would have done well to look at Blackrock's bet against Carillion and ask them what they saw that they didn't.
  - Applejacker 9y ago
    Some of BlackRock's other disclosed short positions. BCOCK INTL GROUP PLC, BALFOUR BEATTY PLC, BRITVIC PLC, CARILLION PLC, CONVATEC GROUP PLC, COUNTRYWIDE PLC, CREST NICHOLSON HLDGS PLC, CYBG PLC, DAILY MAIL & GENERAL, Dairy Crest Group, DEBENHAMS PLC, EMPIRIC STUDENT PROPERTY PLC, FLYBE GROUP PLC, GREENE KING PLC, Greggs Plc, HALFORDS GROUP PLC, J.D. WETHERSPOON PLC, KCOM GROUP PLC, KINGFISHER PLC, MARKS & SPENCER GROUP PLC, METRO BANK PLC , N. Brown Group, PATISSERIE HOLDINGS PLC, PETRA DIAMONDS, PETROFAC LTD, RESTAURANT GROUP PLC, RPC Group plc, SAINSBURY (J) PLC, SIG PLC, TalkTalk Telecom Group PLC, TED BAKER, WM MORRISON SUPERMARKETS Is your argument the govt. should be doing more to support the UK retail pastry market? (I'm joking)
- joefarish 9y ago
  What is unethical about short selling?
  - jamiethompson 9y ago
    There is a suggestion that HSBC and others may have been working with inside knowledge. Blackrock also hired the outgoing chancellor of the UK George Osborne who was responsible for awarding vast numbers of contract to Carillion.
    - mseebach 9y ago
      I read an article in FT this morning about how the Carillion problems were hinted in annual reports going back to 2011 (and also how shorting them was popular throughout 2016 and 2017). Hindsight is 20/20, but there's a real chance that Blackrock are just pretty good at what they do.
    - adwhit 9y ago
      Employing George Osborne for squillions straight from government is definitely unethical. How can he act in the best interest of the country when there is a colossal personal incentive to keep BlackRock et al on side during his tenure?
  - dingaling 9y ago
    > What is unethical about short selling? Short-sold stocks are 'borrowed' from an investor who has less market information than the trader. The trader deliberately hides that information so as to leave the owner holding the bag when the price drops, whilst pocketing the difference as profit. Doesn't seem ethical to me. Legal, yes.
    - nopriorarrests 9y ago
      Well, consider TSLA, one of the most shorted stocks of last years. I don't think that Tesla short-sellers are deliberately hiding some information from investors. Jim Chanos, the most famous TSLA seller, is very open why, in his opinion, true tesla price is zero [0] and definitely not hiding anything. Some even argue that Jim is too vocal. [0] https://www.cnbc.com/2017/12/14/jim-chanos-we-think-tesla-is-worth-zero.html https://www.cnbc.com/2017/12/14/jim-chanos-we-think-tesla-is...
- Applejacker 9y ago
  BlackRock's short positions in the UK. I'm sure the employees feel that contribution https://shorttracker.co.uk/manager/blackrock-institutional-trust-company-national-ass/ https://shorttracker.co.uk/manager/blackrock-institutional-t... https://shorttracker.co.uk/manager/blackrock-investment-management-uk-limited/ https://shorttracker.co.uk/manager/blackrock-investment-mana... https://shorttracker.co.uk/manager/blackrock-advisors-llc/ https://shorttracker.co.uk/manager/blackrock-advisors-llc/ https://shorttracker.co.uk/manager/blackrock-advisors-uk-limited/ https://shorttracker.co.uk/manager/blackrock-advisors-uk-lim...
kchoudhu 9y ago
I'm interested in why Blackrock thinks it has the right to use my retirement funds to do anything other than maximize my gains. You want to drive social responsibility from corporations, fine -- but do it on your own dime. As every honest banker is taught fairly early on in his or her career, OPM is sacred.
- notacoward 9y ago
  They have a right and an obligation to serve their clients' collective long term interest. That may include acceptance of the fact that letting the world burn (both literally and figuratively) for the sake of short-term externality-denying profit might not serve that interest. They even have a right to forego investments that their clients would find morally repugnant. As long as they're clear and honest about which strategies and ideals they're pursuing, your say is limited to investing with them or investing elsewhere. Your pittance of a retirement fund doesn't give you the right to dictate every detail of their activity. That would be denying that certain interests can be represented in the market, and that's not how free markets work.
  - golergka 9y ago
    > They have a right and an obligation to serve their clients' collective long term interest. Two points: (1) they have a right and obligation to serve their client's financial interest, as regarded to the money invested in them. They don't have any obligation to serve any other form of their client's financial interest - if you talked to them on the phone in a sad and depressed manner and then they used your money to hire a psychologist to get you out of it, for example, it might be in your interest, but it certainly wouldn't be what you hired them for. (2) It's their obligation to serve their client's interest, not the society's. If the client would want to help the society as a whole is his decision to make, not this institution's. But sadly, any institution large enough inevitably forgets these two points and gets too big for it's constituents to enforce them, governments being first and foremost example.
    - Xylakant 9y ago
peoplewindow 9y ago
Side note: It isn’t clear why Jana went after Apple, considering that it has better tools to manage the use of its products by children than anyone else in the industry; but the general idea of technology companies paying more attention to children’s health is a good one That is rather the key point, I think. Why Apple indeed? The phrase "virtue signalling" is rather widely used and abused, but if it has any definition at all it would have to mean something like this: the very public and noisy display of moral purity through mounting public attacks on those claimed to be less morally pure, specifically for the purpose of boosting your own credentials. If this firm Jana Partners and Calstrs actually cared about the topic of children and electronics, and was pursuing some well thought out logical agenda to increase child safety in industry, it would make more sense to publicly request down-tier phone vendors whose child-related feature set was not as good as Apple's to rise to their level. They would use Apple as an example for everyone else, not attack Apple and imply that they don't care enough. Objectively they seem to care more than most manufacturers do, even if it's only a small amount (I guess Android has some similar features too these days). But if this firm is merely posturing and engaged in "virtue signalling", and doesn't actually care much about numerically significant outcomes on children, then it makes perfect sense to attack Apple because the goal is to be as noisy and attention grabbing as possible and Apple has more brand recognition than most firms do. If major investment funds are being taken over by social activism, this doesn't seem like good news for anyone. What makes us think that Fink in particular has such great wisdom or insight into how society should be remodelled. What if his idea of "contributing to society" looks rather different to most other people's? And what will the people who put money in his funds think, when they discover that he's using their money to advance his own pet political causes? When I was younger I used to think that faceless financial types like Fink were bad, a part of The System and activism was wonderful. Now I'm older I think the world could use a bit less naive activism and a bit more understanding of how it got the way it is before people go and throw wrenches into it. Fink should get back to delivering returns and let society itself decide what "contributing to society" means.
- EliRivers 9y ago
  Fink should get back to delivering returns and let society itself decide what "contributing to society" means. Fink isn't part of society? Blackrock isn't part of society? Who counts as "society"? If Fink and Blackrock are excluded, do you have a guideline for who is allowed to decide these things on behalf of society?
afriend4lyfe 9y ago
"Despite Mr. Fink’s insistence that companies benefit society, it’s worth noting he’s not playing down the importance of profits and, while it’s a subtle point, he believes that having social purpose is inextricably linked to a company’s ability to maintain its profits." Perhaps capitalism is realizing what thinking long term actually means then? The future for humanity is bleak if we continue down the path of unsustainable business practices. At this point we really do know better. We can't allow our only natural habitat to be exhausted for the sake a few luxurious generations. At the current rate our businesses are exploiting the environment and people, it's honestly hard to say what's bound to happen first, the planet reaching its limit or the poor eating the rich. Either way, change gon' come. Hopefully we avoid all of that and start thinking about more than just our own immediate futures. In this way, I think the real long term strategy is to inject some compassion and empathy into business.
- toopok4k3 9y ago
  There's also self preservation as a motivation in case of sudden abundance of pitchforks.
- betageek 9y ago
  That's an optimistic view, but think (late) capitalism is realising that it's putting it's own short term profits in jeopardy, and it's just good business to recognise that. It's pretty obvious there's a growing wave of consumers that are realising that capitalism may be out of control in regards to social issues like the environment and workforce exploitation, and this can have a real and immediate impact on the companies profits and stock price if uncovered - Volkswagen lost 64% of it's value in a few months after the emissions scandal and profits were down 20%. The likelihood that corporate misdeeds are uncovered is only increasing as whistleblowing and hacking become more common. People seem to think protecting shareholder value only involves growing the company by any means necessary - this was always a ridiculous idea, some growth choices put the whole company at risk, this seems like a nudge to remind companies of that.
- crispyambulance 9y ago
  > Perhaps capitalism is realizing... While it superficially looks good for corporations to "contribute to society" and they will fall over themselves to give lip-service for this idea, such goodwill will VAPORIZE in the instant they're no longer deeply in the black. Sorry, but capitalism won't "realize" anything by itself. We should not leave any aspect of our social safety net up to the whims of hedge-fund a-holes, financiers and large corporations who have demonstrated over and over and over what they _really_ care about.
patrickg_zill 9y ago
https://www.zerohedge.com/contributed/2013-06-05/real-reason-housing-prices-have-skyrocketed https://www.zerohedge.com/contributed/2013-06-05/real-reason... Blackrock got easy terms under NDA for buying up rental housing, getting sweetheart deals not available to individual home buyers. Now they have the arrogance to engage in moral posturing? How about they disclose the terms under which they bought those rentals? Something tells me the current administration won't mind...
- fwdpropaganda 9y ago
  Hey, I'm going to say this as well itentioned as possible. Please keep an open mind and as always do your own research: Zero Hedge is a pile of propaganda and you shouldn't believe anything you read in it. > Mike Whitney explained last September: (QUOTE) At the end of the first paragraph of (QUOTE) they have (businessweek). If you search for that text, it doesn't appear in businessweek, it appears in all sorts of nutter right-wing websites. What does that show about the content of the article? Nothing. But it does show you one example of the tricks that Zero Hedge uses to make itself appear more legitimate. Also, do a bit of research about Mike Whitney. His living seems to be trashing Obama. Does that mean the things he says are factually wrong? Again, no. But from my experience the kind of people who first reach a conclusion and then come up with the argument to support the conclusion, are typically dumb or dishonest.
  - SyneRyder 9y ago
    I'm afraid your Businessweek example is incorrect. There is a link provided, linking to Telegram.com with the complete article from Bloomberg Businessweek. The link is broken, but it's cached at archive.org just after the date it was published in 2012: http://web.archive.org/web/20120713014102/http://www.telegram.com/article/20120712/NEWS/107129806/1237 http://web.archive.org/web/20120713014102/http://www.telegra... So why link to the Worcester County Telegram's syndication of Businessweek articles, and not directly to Bloomberg Businessweek? Because old Bloomberg articles are behind a paywall and only accessible to Bloomberg Professional Service Subscribers. Here's an example Bloomberg link from that year, note that it only contains one sentence: https://www.bloomberg.com/news/articles/2012-10-29/bonds-better-off-with-6-5-under-obama-from-bush-s-4-6- https://www.bloomberg.com/news/articles/2012-10-29/bonds-bet... As for being a right-wing nutter site, the Worcester County Telegram was owned by The New York Times at the time they published/syndicated that article in 2012. https://www.bostonglobe.com/business/2013/11/26/john-henry-sell-worcester-telegram-gazette/NQI9Lu6jVz7NdTfqRSIdRP/story.html https://www.bostonglobe.com/business/2013/11/26/john-henry-s... https://en.wikipedia.org/wiki/Telegram_%26_Gazette https://en.wikipedia.org/wiki/Telegram_%26_Gazette I generally agree with your sentiment on Zero Hedge (and all media), definitely keep an open mind and do your own research. But in this case, it does appear to be from Businessweek.
deleted 9y ago
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unmango 9y ago
By "contribute to society" they mean companies should help advance the gay agenda?
eptcyka 9y ago
You can tell a sociopath to not only do thing A but also B, but that won't necessarily mean that both thing A and B will receive the same effort. To benefit society, one has to be capable of empathy. Whilst human individuals often are capable, the plural of human is cattle.
WillReplyfFood 9y ago
If only i had this message on paper- i could make a hat from that. A hat can keep you warm on rainy days, you can even fold them from shares if they go down in value. Why am i expected to wast time on letters of good intention. From a person who would fight every government attempt to forcing it to actually implement this mentality in actions. All that energy, that went into serverfarms to distribute this drizzle- its gone, for nothing. Maybee they burned some tree for that- and we cant even make a hat from this.
OliverJones 9y ago
The idea that businesses' sole loyalty must be to shareholders is not ancient, and it is not a long-standing central tenet of capitalism. On September 13 1970, the University of Chicago economist Milton Friedman published an article in the New York Times Magazine under the headline "The Social Responsibility of Business is to Increase its Profits". You can find it here. https://www.colorado.edu/studentgroups/libertarians/issues/friedman-soc-resp-business.html https://www.colorado.edu/studentgroups/libertarians/issues/f... Much of the shareholder-only ethic of US business is based on that article. Mr. Fink and his investment firm seem (to me) to be part of a movement to relax that single-minded approach to corporate ethics. Obviously a company that extracts every bit of value from its customers, workers, and host communities leaves them less resilient and certainly less loyal to the company. Uber's the egregious example, but there are plenty of others. Mr. Fink is betting that companies who don't extract everything will have a longer future. It's worth a try. The Friedman approach has now been tried, and it's not working as well as some might have hoped.
- Banthum 9y ago
  Isn't that just the same Friedman approach with a longer time horizon? Imagine a farmer who farms to exhaust the soil. He earns money but in 30 years, the farmland is rendered useless. He becomes poor in the end. Another farmer farms slower, leaving fallow years, sustainably. He earns less money but 30 years later the farm is productive. He remains wealthy in the end. Going from farmer 1 to farmer 2's strategy is not a change in ethics. The second farmer didn't care about the land as an end in itself. He just thought longer into the future, and knew how to measure assets that weren't obvious (in his case, land quality; in real life, loyalty, image, healthy communities to embed in).
  - cjalmeida 9y ago
    There's also a financial reasoning behind that. Low interest rates and high liquidity seems to be the new normal. Even "Main Street" corps are trading with PE ratios above 20. This means 20y of current profits to get back the money. A capital investor now needs a lot of profitable years to recoup their investment. One single scandal like VW emissions may jeopardize a lot of years profits.
throwaway12332 9y ago
... and BlackRock will decide what that contribution will be. > making stands on issues like immigration policy, race relations, gay rights and more. What if I do not care about that, but want to support my family? And retire at 55 rather than 75?
davidgrenier 9y ago
Just so I understand this thoroughly, did BlackRock just gain BlackRock's support or did it loose it? Perhaps there's no change in policy?
throwawaymanbot 9y ago
Very very rich, coming from these guys and especially their entire industry.
debt 9y ago
Muhammad Yunus whom won the Nobel Prize for micro financing, said in his book that corporations need to also be financially hurt or helped by how much social capital they contribute to society.
- fogzen 9y ago
  Yes! Minor correction to spelling: Muhammad Yunus Muhammad Yunus’ concept of Social Business is essentially using for-profit enterprises that are self-sustaining to solve problems typically addressed by charity: Poverty, unemployment, education, equal opportunity, clean water, reduced carbon emissions, etc.
oblib 9y ago
If you look into the history of Sears you'll find the CEO, Theodore Houser, addressed this issue in in the late 1950s with a book he wrote called "Big Business and Human Values". Mr. Houser retired from Sears in the 1960s when it was doing very well. When we read his book now we find an interesting contrast with his successors as time evolves and especially with his current one. It's not a leap to say ignoring human values is exactly what led to Sears current position, which was akin to Amazon.com when Mr. Houser was running it, and for decades before him.
deleted 9y ago
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apple4ever 9y ago
Sounds like I'll be divesting myself from any BlackRock investments. I invest to make money, not for some "social justice" platform which usually is justice only for the chosen. Plus the focus on the "climate", a non-science based position is dumb.

146 points by lnguyen 9y ago

jamiethompson 9y ago

The same BlackRock that's just made a killing short selling shares in the failed UK public sector contractor Carillion?

addicted 9y ago
Maybe the UK govt would have done well to look at Blackrock's bet against Carillion and ask them what they saw that they didn't.
- Applejacker 9y ago
  Some of BlackRock's other disclosed short positions. BCOCK INTL GROUP PLC, BALFOUR BEATTY PLC, BRITVIC PLC, CARILLION PLC, CONVATEC GROUP PLC, COUNTRYWIDE PLC, CREST NICHOLSON HLDGS PLC, CYBG PLC, DAILY MAIL & GENERAL, Dairy Crest Group, DEBENHAMS PLC, EMPIRIC STUDENT PROPERTY PLC, FLYBE GROUP PLC, GREENE KING PLC, Greggs Plc, HALFORDS GROUP PLC, J.D. WETHERSPOON PLC, KCOM GROUP PLC, KINGFISHER PLC, MARKS & SPENCER GROUP PLC, METRO BANK PLC , N. Brown Group, PATISSERIE HOLDINGS PLC, PETRA DIAMONDS, PETROFAC LTD, RESTAURANT GROUP PLC, RPC Group plc, SAINSBURY (J) PLC, SIG PLC, TalkTalk Telecom Group PLC, TED BAKER, WM MORRISON SUPERMARKETS Is your argument the govt. should be doing more to support the UK retail pastry market? (I'm joking)
joefarish 9y ago
What is unethical about short selling?
- jamiethompson 9y ago
  There is a suggestion that HSBC and others may have been working with inside knowledge. Blackrock also hired the outgoing chancellor of the UK George Osborne who was responsible for awarding vast numbers of contract to Carillion.
  - mseebach 9y ago
    I read an article in FT this morning about how the Carillion problems were hinted in annual reports going back to 2011 (and also how shorting them was popular throughout 2016 and 2017). Hindsight is 20/20, but there's a real chance that Blackrock are just pretty good at what they do.
  - adwhit 9y ago
    Employing George Osborne for squillions straight from government is definitely unethical. How can he act in the best interest of the country when there is a colossal personal incentive to keep BlackRock et al on side during his tenure?
- dingaling 9y ago
  > What is unethical about short selling? Short-sold stocks are 'borrowed' from an investor who has less market information than the trader. The trader deliberately hides that information so as to leave the owner holding the bag when the price drops, whilst pocketing the difference as profit. Doesn't seem ethical to me. Legal, yes.
  - nopriorarrests 9y ago
    Well, consider TSLA, one of the most shorted stocks of last years. I don't think that Tesla short-sellers are deliberately hiding some information from investors. Jim Chanos, the most famous TSLA seller, is very open why, in his opinion, true tesla price is zero [0] and definitely not hiding anything. Some even argue that Jim is too vocal. [0] https://www.cnbc.com/2017/12/14/jim-chanos-we-think-tesla-is-worth-zero.html https://www.cnbc.com/2017/12/14/jim-chanos-we-think-tesla-is...
Applejacker 9y ago
BlackRock's short positions in the UK. I'm sure the employees feel that contribution https://shorttracker.co.uk/manager/blackrock-institutional-trust-company-national-ass/ https://shorttracker.co.uk/manager/blackrock-institutional-t... https://shorttracker.co.uk/manager/blackrock-investment-management-uk-limited/ https://shorttracker.co.uk/manager/blackrock-investment-mana... https://shorttracker.co.uk/manager/blackrock-advisors-llc/ https://shorttracker.co.uk/manager/blackrock-advisors-llc/ https://shorttracker.co.uk/manager/blackrock-advisors-uk-limited/ https://shorttracker.co.uk/manager/blackrock-advisors-uk-lim...

kchoudhu 9y ago

I'm interested in why Blackrock thinks it has the right to use my retirement funds to do anything other than maximize my gains. You want to drive social responsibility from corporations, fine -- but do it on your own dime. As every honest banker is taught fairly early on in his or her career, OPM is sacred.

notacoward 9y ago
They have a right and an obligation to serve their clients' collective long term interest. That may include acceptance of the fact that letting the world burn (both literally and figuratively) for the sake of short-term externality-denying profit might not serve that interest. They even have a right to forego investments that their clients would find morally repugnant. As long as they're clear and honest about which strategies and ideals they're pursuing, your say is limited to investing with them or investing elsewhere. Your pittance of a retirement fund doesn't give you the right to dictate every detail of their activity. That would be denying that certain interests can be represented in the market, and that's not how free markets work.
- golergka 9y ago
  > They have a right and an obligation to serve their clients' collective long term interest. Two points: (1) they have a right and obligation to serve their client's financial interest, as regarded to the money invested in them. They don't have any obligation to serve any other form of their client's financial interest - if you talked to them on the phone in a sad and depressed manner and then they used your money to hire a psychologist to get you out of it, for example, it might be in your interest, but it certainly wouldn't be what you hired them for. (2) It's their obligation to serve their client's interest, not the society's. If the client would want to help the society as a whole is his decision to make, not this institution's. But sadly, any institution large enough inevitably forgets these two points and gets too big for it's constituents to enforce them, governments being first and foremost example.
  - Xylakant 9y ago

peoplewindow 9y ago

Side note: It isn’t clear why Jana went after Apple, considering that it has better tools to manage the use of its products by children than anyone else in the industry; but the general idea of technology companies paying more attention to children’s health is a good one That is rather the key point, I think. Why Apple indeed? The phrase "virtue signalling" is rather widely used and abused, but if it has any definition at all it would have to mean something like this: the very public and noisy display of moral purity through mounting public attacks on those claimed to be less morally pure, specifically for the purpose of boosting your own credentials. If this firm Jana Partners and Calstrs actually cared about the topic of children and electronics, and was pursuing some well thought out logical agenda to increase child safety in industry, it would make more sense to publicly request down-tier phone vendors whose child-related feature set was not as good as Apple's to rise to their level. They would use Apple as an example for everyone else, not attack Apple and imply that they don't care enough. Objectively they seem to care more than most manufacturers do, even if it's only a small amount (I guess Android has some similar features too these days). But if this firm is merely posturing and engaged in "virtue signalling", and doesn't actually care much about numerically significant outcomes on children, then it makes perfect sense to attack Apple because the goal is to be as noisy and attention grabbing as possible and Apple has more brand recognition than most firms do. If major investment funds are being taken over by social activism, this doesn't seem like good news for anyone. What makes us think that Fink in particular has such great wisdom or insight into how society should be remodelled. What if his idea of "contributing to society" looks rather different to most other people's? And what will the people who put money in his funds think, when they discover that he's using their money to advance his own pet political causes? When I was younger I used to think that faceless financial types like Fink were bad, a part of The System and activism was wonderful. Now I'm older I think the world could use a bit less naive activism and a bit more understanding of how it got the way it is before people go and throw wrenches into it. Fink should get back to delivering returns and let society itself decide what "contributing to society" means.

EliRivers 9y ago
Fink should get back to delivering returns and let society itself decide what "contributing to society" means. Fink isn't part of society? Blackrock isn't part of society? Who counts as "society"? If Fink and Blackrock are excluded, do you have a guideline for who is allowed to decide these things on behalf of society?

afriend4lyfe 9y ago

"Despite Mr. Fink’s insistence that companies benefit society, it’s worth noting he’s not playing down the importance of profits and, while it’s a subtle point, he believes that having social purpose is inextricably linked to a company’s ability to maintain its profits." Perhaps capitalism is realizing what thinking long term actually means then? The future for humanity is bleak if we continue down the path of unsustainable business practices. At this point we really do know better. We can't allow our only natural habitat to be exhausted for the sake a few luxurious generations. At the current rate our businesses are exploiting the environment and people, it's honestly hard to say what's bound to happen first, the planet reaching its limit or the poor eating the rich. Either way, change gon' come. Hopefully we avoid all of that and start thinking about more than just our own immediate futures. In this way, I think the real long term strategy is to inject some compassion and empathy into business.

toopok4k3 9y ago
There's also self preservation as a motivation in case of sudden abundance of pitchforks.
betageek 9y ago
That's an optimistic view, but think (late) capitalism is realising that it's putting it's own short term profits in jeopardy, and it's just good business to recognise that. It's pretty obvious there's a growing wave of consumers that are realising that capitalism may be out of control in regards to social issues like the environment and workforce exploitation, and this can have a real and immediate impact on the companies profits and stock price if uncovered - Volkswagen lost 64% of it's value in a few months after the emissions scandal and profits were down 20%. The likelihood that corporate misdeeds are uncovered is only increasing as whistleblowing and hacking become more common. People seem to think protecting shareholder value only involves growing the company by any means necessary - this was always a ridiculous idea, some growth choices put the whole company at risk, this seems like a nudge to remind companies of that.
crispyambulance 9y ago
> Perhaps capitalism is realizing... While it superficially looks good for corporations to "contribute to society" and they will fall over themselves to give lip-service for this idea, such goodwill will VAPORIZE in the instant they're no longer deeply in the black. Sorry, but capitalism won't "realize" anything by itself. We should not leave any aspect of our social safety net up to the whims of hedge-fund a-holes, financiers and large corporations who have demonstrated over and over and over what they _really_ care about.

patrickg_zill 9y ago

https://www.zerohedge.com/contributed/2013-06-05/real-reason-housing-prices-have-skyrocketed https://www.zerohedge.com/contributed/2013-06-05/real-reason... Blackrock got easy terms under NDA for buying up rental housing, getting sweetheart deals not available to individual home buyers. Now they have the arrogance to engage in moral posturing? How about they disclose the terms under which they bought those rentals? Something tells me the current administration won't mind...

fwdpropaganda 9y ago
Hey, I'm going to say this as well itentioned as possible. Please keep an open mind and as always do your own research: Zero Hedge is a pile of propaganda and you shouldn't believe anything you read in it. > Mike Whitney explained last September: (QUOTE) At the end of the first paragraph of (QUOTE) they have (businessweek). If you search for that text, it doesn't appear in businessweek, it appears in all sorts of nutter right-wing websites. What does that show about the content of the article? Nothing. But it does show you one example of the tricks that Zero Hedge uses to make itself appear more legitimate. Also, do a bit of research about Mike Whitney. His living seems to be trashing Obama. Does that mean the things he says are factually wrong? Again, no. But from my experience the kind of people who first reach a conclusion and then come up with the argument to support the conclusion, are typically dumb or dishonest.
- SyneRyder 9y ago
  I'm afraid your Businessweek example is incorrect. There is a link provided, linking to Telegram.com with the complete article from Bloomberg Businessweek. The link is broken, but it's cached at archive.org just after the date it was published in 2012: http://web.archive.org/web/20120713014102/http://www.telegram.com/article/20120712/NEWS/107129806/1237 http://web.archive.org/web/20120713014102/http://www.telegra... So why link to the Worcester County Telegram's syndication of Businessweek articles, and not directly to Bloomberg Businessweek? Because old Bloomberg articles are behind a paywall and only accessible to Bloomberg Professional Service Subscribers. Here's an example Bloomberg link from that year, note that it only contains one sentence: https://www.bloomberg.com/news/articles/2012-10-29/bonds-better-off-with-6-5-under-obama-from-bush-s-4-6- https://www.bloomberg.com/news/articles/2012-10-29/bonds-bet... As for being a right-wing nutter site, the Worcester County Telegram was owned by The New York Times at the time they published/syndicated that article in 2012. https://www.bostonglobe.com/business/2013/11/26/john-henry-sell-worcester-telegram-gazette/NQI9Lu6jVz7NdTfqRSIdRP/story.html https://www.bostonglobe.com/business/2013/11/26/john-henry-s... https://en.wikipedia.org/wiki/Telegram_%26_Gazette https://en.wikipedia.org/wiki/Telegram_%26_Gazette I generally agree with your sentiment on Zero Hedge (and all media), definitely keep an open mind and do your own research. But in this case, it does appear to be from Businessweek.

deleted 9y ago

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unmango 9y ago

By "contribute to society" they mean companies should help advance the gay agenda?

eptcyka 9y ago

You can tell a sociopath to not only do thing A but also B, but that won't necessarily mean that both thing A and B will receive the same effort. To benefit society, one has to be capable of empathy. Whilst human individuals often are capable, the plural of human is cattle.

WillReplyfFood 9y ago

If only i had this message on paper- i could make a hat from that. A hat can keep you warm on rainy days, you can even fold them from shares if they go down in value. Why am i expected to wast time on letters of good intention. From a person who would fight every government attempt to forcing it to actually implement this mentality in actions. All that energy, that went into serverfarms to distribute this drizzle- its gone, for nothing. Maybee they burned some tree for that- and we cant even make a hat from this.

OliverJones 9y ago

The idea that businesses' sole loyalty must be to shareholders is not ancient, and it is not a long-standing central tenet of capitalism. On September 13 1970, the University of Chicago economist Milton Friedman published an article in the New York Times Magazine under the headline "The Social Responsibility of Business is to Increase its Profits". You can find it here. https://www.colorado.edu/studentgroups/libertarians/issues/friedman-soc-resp-business.html https://www.colorado.edu/studentgroups/libertarians/issues/f... Much of the shareholder-only ethic of US business is based on that article. Mr. Fink and his investment firm seem (to me) to be part of a movement to relax that single-minded approach to corporate ethics. Obviously a company that extracts every bit of value from its customers, workers, and host communities leaves them less resilient and certainly less loyal to the company. Uber's the egregious example, but there are plenty of others. Mr. Fink is betting that companies who don't extract everything will have a longer future. It's worth a try. The Friedman approach has now been tried, and it's not working as well as some might have hoped.

Banthum 9y ago
Isn't that just the same Friedman approach with a longer time horizon? Imagine a farmer who farms to exhaust the soil. He earns money but in 30 years, the farmland is rendered useless. He becomes poor in the end. Another farmer farms slower, leaving fallow years, sustainably. He earns less money but 30 years later the farm is productive. He remains wealthy in the end. Going from farmer 1 to farmer 2's strategy is not a change in ethics. The second farmer didn't care about the land as an end in itself. He just thought longer into the future, and knew how to measure assets that weren't obvious (in his case, land quality; in real life, loyalty, image, healthy communities to embed in).
- cjalmeida 9y ago
  There's also a financial reasoning behind that. Low interest rates and high liquidity seems to be the new normal. Even "Main Street" corps are trading with PE ratios above 20. This means 20y of current profits to get back the money. A capital investor now needs a lot of profitable years to recoup their investment. One single scandal like VW emissions may jeopardize a lot of years profits.

throwaway12332 9y ago

... and BlackRock will decide what that contribution will be. > making stands on issues like immigration policy, race relations, gay rights and more. What if I do not care about that, but want to support my family? And retire at 55 rather than 75?

davidgrenier 9y ago

Just so I understand this thoroughly, did BlackRock just gain BlackRock's support or did it loose it? Perhaps there's no change in policy?

throwawaymanbot 9y ago

Very very rich, coming from these guys and especially their entire industry.

debt 9y ago

Muhammad Yunus whom won the Nobel Prize for micro financing, said in his book that corporations need to also be financially hurt or helped by how much social capital they contribute to society.

fogzen 9y ago
Yes! Minor correction to spelling: Muhammad Yunus Muhammad Yunus’ concept of Social Business is essentially using for-profit enterprises that are self-sustaining to solve problems typically addressed by charity: Poverty, unemployment, education, equal opportunity, clean water, reduced carbon emissions, etc.

oblib 9y ago

If you look into the history of Sears you'll find the CEO, Theodore Houser, addressed this issue in in the late 1950s with a book he wrote called "Big Business and Human Values". Mr. Houser retired from Sears in the 1960s when it was doing very well. When we read his book now we find an interesting contrast with his successors as time evolves and especially with his current one. It's not a leap to say ignoring human values is exactly what led to Sears current position, which was akin to Amazon.com when Mr. Houser was running it, and for decades before him.

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apple4ever 9y ago

Sounds like I'll be divesting myself from any BlackRock investments. I invest to make money, not for some "social justice" platform which usually is justice only for the chosen. Plus the focus on the "climate", a non-science based position is dumb.