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>As GGP mentioned, the necessity of keeping stock prices (and property values, and anything else securitized) high so as to not impoverish pension funds, 401Ks,

>As GGP mentioned, the necessity of keeping stock prices (and property values, and anything else securitized) high so as to not impoverish pension funds, 401Ks, IRAs, etc., is real. I'm confused about how your model of the economy works. It sounds like you believe CEOs are selfish and greedy when it comes to workers, but when it comes to pension funds, they keep stock prices high out of the goodness of their hearts? If liquidpele's thesis is true, and executives are looking to "get rich and dip", "company be damned in the long run", then we would expect this to be reflected in the company's stock price in the long run. The stock price is essentially the fair market value of the company. And the American stock market has been performing very well for a good long while. This entire comment thread strikes me as populist pitchfork-waving with little grounding in economic reality. Here's a question: If you're truly pessimistic about American companies, do you hold any short positions or put options? At the very least, are you overweighting non-American countries in your portfolio? And if so, which ones?

sudosysgen 3y ago
CEOs are employed by the board, the board is made of major stockholders, those are pensions funds and other investors mainly interested in stock prices. No need for conspiracy theories or pitchfork waving, it's just all working exactly how it's openly designed to.
- 0xDEAFBEAD 3y ago
  If you were a major shareholder in a company, would you favor a CEO who ran it into the ground?
  - SyzygistSix 3y ago
    For short term profit that I can walk away with? That is very different from building long term value. Both are profit. One profits from creation and has long term recurring benefits, the other profits from extraction, which only happens once. Both building a fire and building a house profit from a supply of wood. But they are pretty different in terms of long term pay off.
  - p_l 3y ago
    If I am a faceless pension fund that is going to earn short term on this much better, and be free to walk away and do the same thing to another company? Sure. This is exactly the same playbook as with private equity - the point is to make the shareholders richer as fast as possible, and long-term strategies do not pay out as fast while possibly introducing longer term risks.
  - sudosysgen 3y ago
    If I am a major shareholder, I would prefer a quick profit because I can then invest it somewhere else and have higher overall profits.
  - tharmas 3y ago
    Please see the story of Jack Welch CEO of GE.
    - 0xDEAFBEAD 3y ago
      Can you elaborate? Wikipedia says Welch took GE from a market cap of $12 billion to $410 billion over the course of 20 years.
      - tharmas 3y ago
        He destroyed the Company in the long run. https://www.npr.org/2022/06/01/1101505691/short-term-profits-and-long-term-consequences-did-jack-welch-break-capitalism https://www.npr.org/2022/06/01/1101505691/short-term-profits...
- cced 3y ago
  You guys keep saying pension funds. Where are the sources that financialisation sucking us dry is because pension funds need to get seeded? We’re living in a time of record profits and ceo to worker pay ratio through the roof and you guys are implying pension funds, the little to last thing workers have, as the issue? Gee I’m wondering what we should all be thinking and doing about those pension funds and who that would actually serve. Y’all get that most of us don’t have pension funds, right? They’ve been gutted long time ago. Defined benefit to defined contribution ring any bells? But yes, let’s fight against the other plebs that have things we don’t, let’s blame pension funds and not the plethora of other issues. I tell ya, we’re funding pensions alright but it ain’t the teachers kind.
  - michaelt 3y ago
    CEO pay is certainly way too high, I agree. But look at any big corporation, take the CEO's total compensation and divide it by the number of employees. The CEO of IBM earns an obscene $16.5 million per year - but divide that by IBM's 288,300 employees and it's $60 per employee per year. Wal-mart's CEO makes $25.31 million, but it's only $12 per employee per year. Even if we redistributed the CEO's entire salary to workers, $60/year isn't going to do much to close the gap between rich and poor.
    - yterdy 3y ago
      This is quite an arbitrary metric.
      - CoastalCoder 3y ago
        I find GP's metric useful. It helps address the question: wouldn't the company perform better if we did other things with that excess money?
        yterdy 3y ago
        >wouldn't the company perform better if we did other things with that excess money? Of course. That's not what CEO pay/employee does, though; it trivializes the massive (over)compensation by putting it in seemingly-small terms. What we need to be analyzing CEO pay in terms of is 1) How much a person needs in order to live decently and with dignity in one's particular area, and 2) How much better than the "average" CEO any give one performs (to determine incentive pay). Certain entities, institutions, and groups have cartel-ized executive positions as a class and bid up their compensation, decoupled from real value. Another view: $60/employee doesn't seem like a lot, but if you remove the employees making over the median, or $100k, or some other resaonable cut-off, something tells me that the lowest-paid employees would see a meaningful increase in their take-home. GGP is purposely being reductive in a way that makes rethinking the issue more silly than it actually is.
- jnash 3y ago
  Nope. CEO's tend to be on the board of each others companies, making sure that there is never any argument over CEO compensation.
p_l 3y ago
Institutional shareholders with large portfolios care about stock performance for their market plays, not about the company. And they happen to have large influence on choice of CEO and who said CEO is going to try to please.
jnash 3y ago
> The stock price is essentially the fair market value of the company That is something some people choose to believe to be true. The same way some people choose to believe that God (or a number of Gods) exist.
- Nasrudith 3y ago
  While there is a spike at buy-out it is still more or less true. Try to buy a company for far less than the stock market price and tell me how that works out for you.
pseudosaid 3y ago
you think the stock market works well? look up the fail to deliver rate, infinite liquidity of market makers, and how the SEC said themselves that 95% of retail trades are happening off lit markets in dark pool. Price discovery has been broken for a long time and without, there is no legitimate market.

sudosysgen 3y ago

CEOs are employed by the board, the board is made of major stockholders, those are pensions funds and other investors mainly interested in stock prices. No need for conspiracy theories or pitchfork waving, it's just all working exactly how it's openly designed to.

0xDEAFBEAD 3y ago
If you were a major shareholder in a company, would you favor a CEO who ran it into the ground?
- SyzygistSix 3y ago
  For short term profit that I can walk away with? That is very different from building long term value. Both are profit. One profits from creation and has long term recurring benefits, the other profits from extraction, which only happens once. Both building a fire and building a house profit from a supply of wood. But they are pretty different in terms of long term pay off.
- p_l 3y ago
  If I am a faceless pension fund that is going to earn short term on this much better, and be free to walk away and do the same thing to another company? Sure. This is exactly the same playbook as with private equity - the point is to make the shareholders richer as fast as possible, and long-term strategies do not pay out as fast while possibly introducing longer term risks.
- sudosysgen 3y ago
  If I am a major shareholder, I would prefer a quick profit because I can then invest it somewhere else and have higher overall profits.
- tharmas 3y ago
  Please see the story of Jack Welch CEO of GE.
  - 0xDEAFBEAD 3y ago
    Can you elaborate? Wikipedia says Welch took GE from a market cap of $12 billion to $410 billion over the course of 20 years.
    - tharmas 3y ago
      He destroyed the Company in the long run. https://www.npr.org/2022/06/01/1101505691/short-term-profits-and-long-term-consequences-did-jack-welch-break-capitalism https://www.npr.org/2022/06/01/1101505691/short-term-profits...
cced 3y ago
You guys keep saying pension funds. Where are the sources that financialisation sucking us dry is because pension funds need to get seeded? We’re living in a time of record profits and ceo to worker pay ratio through the roof and you guys are implying pension funds, the little to last thing workers have, as the issue? Gee I’m wondering what we should all be thinking and doing about those pension funds and who that would actually serve. Y’all get that most of us don’t have pension funds, right? They’ve been gutted long time ago. Defined benefit to defined contribution ring any bells? But yes, let’s fight against the other plebs that have things we don’t, let’s blame pension funds and not the plethora of other issues. I tell ya, we’re funding pensions alright but it ain’t the teachers kind.
- michaelt 3y ago
  CEO pay is certainly way too high, I agree. But look at any big corporation, take the CEO's total compensation and divide it by the number of employees. The CEO of IBM earns an obscene $16.5 million per year - but divide that by IBM's 288,300 employees and it's $60 per employee per year. Wal-mart's CEO makes $25.31 million, but it's only $12 per employee per year. Even if we redistributed the CEO's entire salary to workers, $60/year isn't going to do much to close the gap between rich and poor.
  - yterdy 3y ago
    This is quite an arbitrary metric.
    - CoastalCoder 3y ago
      I find GP's metric useful. It helps address the question: wouldn't the company perform better if we did other things with that excess money?
      - yterdy 3y ago
        >wouldn't the company perform better if we did other things with that excess money? Of course. That's not what CEO pay/employee does, though; it trivializes the massive (over)compensation by putting it in seemingly-small terms. What we need to be analyzing CEO pay in terms of is 1) How much a person needs in order to live decently and with dignity in one's particular area, and 2) How much better than the "average" CEO any give one performs (to determine incentive pay). Certain entities, institutions, and groups have cartel-ized executive positions as a class and bid up their compensation, decoupled from real value. Another view: $60/employee doesn't seem like a lot, but if you remove the employees making over the median, or $100k, or some other resaonable cut-off, something tells me that the lowest-paid employees would see a meaningful increase in their take-home. GGP is purposely being reductive in a way that makes rethinking the issue more silly than it actually is.
jnash 3y ago
Nope. CEO's tend to be on the board of each others companies, making sure that there is never any argument over CEO compensation.

p_l 3y ago

Institutional shareholders with large portfolios care about stock performance for their market plays, not about the company. And they happen to have large influence on choice of CEO and who said CEO is going to try to please.

jnash 3y ago

> The stock price is essentially the fair market value of the company That is something some people choose to believe to be true. The same way some people choose to believe that God (or a number of Gods) exist.

Nasrudith 3y ago
While there is a spike at buy-out it is still more or less true. Try to buy a company for far less than the stock market price and tell me how that works out for you.

pseudosaid 3y ago

you think the stock market works well? look up the fail to deliver rate, infinite liquidity of market makers, and how the SEC said themselves that 95% of retail trades are happening off lit markets in dark pool. Price discovery has been broken for a long time and without, there is no legitimate market.