Tuesday, February 08, 2011

Obama Says Corporate Profits "Have To Be Shared By American Workers" -- What About Losses?

DETROIT - SEPTEMBER 1:  Democratic presidentia...Image by Getty Images via @daylife
Obama: Corporate Profits "Have To Be Shared By American Workers".

Don't American workers already automatically benefit by working for profitable, successful American companies? Don't more workers usually get hired -- the greatest of all possible benefits for an out-of-work worker -- and don't the productive workers who are already there have increased job security -- a benefit if ever there was one -- along with the possibility of pay increases and likelihood of increased job opportunities?  I mean, doesn't this already happen without the chiding of a President?

Or is Obama just playing to the Marxist crowd?

But, let's play along with this idea.  If corporate profits must be shared by American workers, what about losses?  In bad years, should corporations get to send their workers a bill to help make up for the losses?

Was this the attitude of the Ontario UAW when the auto industry hit its slump?  Wasn't it more like, "when profits are up, we deserve our fair share", but, "when profits are down, it's not our fault and not our problem".

Wasn't that in effect what the UAW reps said?

The recent episode where Obama denied the moral and legal rights of GM shareholders in favour of bestowing uncalled for if not illegal financial benefits on unionized workers was an appalling, appalling example of politically-motivated opportunistic favouritism.  The shareholders and the small feeder companies got wrecked while the big unionized workers got lucky.

And this Obama favouritism thing -- which seems to be the cynically defining characteristic of his presidency -- seems to have no sign of ending anytime soon.

I hope this man turns things around and has a good final two years; but, so far, I don't see it happening.
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dougf said...

This is just another sign that the current business model is broken and WILL be heavily modified at some point.
The detachment of the essentially useless managerial class from the rest of society is too far advanced for anything short of major reforms to correct.
The increasingly unequal division of wealth will lead to problems. We don't want to become like South America, circa 1950.

Obama is not the man for the job as he is too indoctrinated in a 'progressive' mindset but there is a reason Germany is successful and the UK is not. Without the artificial veneer of unsustainable house prices which give people the illusion of wealth, the pot would already be boiling over as people see clearly what is happening and they DON'T LIKE IT.

The status quo cannot and will not endure.

RkBall said...

Not entirely sure where you are going with this, Doug.

Joe said...

Back in the day when I worked for a corporation I had a share of their profits. My share consisted of wages and benefits. If had wanted more more profits I could have bought shares.

RkBall said...

Joe - good comment.

dougf said...


Pretty much there is where I am going. And really I don't think I am alone. 'Let them eat cake' ,didn't work out so well the first time around and I doubt a repeat will fare much better.

And for some icing on that cake ----


RkBall said...

Doug - I agree some CEOs get paid 'way too much. But wouldn't a well-crafted income tax system take care of most of this problem? Don't the top 20% of income earners already pay 80% of the taxes -- meaning most of us are getting, if not a free ride, a good deal?

As far as your useless managerial class comment goes, I can only assume you are neither an entrepreneur nor a manager. As president of my own one-man company, I am the entrepreneur and manager, and the modest successes I have achieved have translated into loads of tax monies paid to governments. If I had failed however, the loss would have been solely mine.

So, what are you investing, what risks are you taking, and what rewards do you expect if successful? Or do you just expect a job that some other guy has created for you complete with a full slate of ready-made benefits and job security?

Randy said...

"The recent episode ... denied the ... legal rights of GM shareholders."

I think I agree with this statement, but admit that I'm not educated enough to know if it's true. I have seen not legal action suggested to try to correct the errors.

Have you? If the action was not legal, why has no counter-action taken place?

RkBall said...

Randy -- see this


Obama got a judge to rule it was all OK. The shareholders got NOTHING.

Randy said...

I'm still wondering why there were no lawsuits? Surely some of the big mutual funds and retirement funds owned large shares of GM stock and were cheated out of their rights. The referenced article points out that the PBGC (taxpayer) dodged a bullet in this one, I wonder about the size of that bullet compared to the one we (taxpayers) took?

I have to be honest, my interest is more than passing. In August 2008 as I watched things crumble, I made a bet and bought a small amount of GM stock. My bet was that the administration would bail them out with loans and the stock would shoot up. In hind-sight, it was a stupid bet, but I also bought Ford stock at the same time (for the same reason). Today, that bet looks good and I've more than covered my losses.

I don't make bets like this regularly, I've made none since 8/4/08.

RkBall said...

Perhaps rather than being illegal in an actionable sense, it voided the clear intent of the law that shareholders rights be protected. At any rate, when Obama had to choose between the legal rights of shareholders and the special interests of the big-unions, he nullified the shareholders' rights and took care of his big-union friends.

"... nothing intellectually compelling or challenging.. bald assertions coupled to superstition... woefully pathetic"