DeLoach said the downturn in the economy started for Sonoco in the second half of 2007 and the company doesn’t expect to see significant improvement in the global economy until the end of 2009.
Cost-cutting measures aimed at positioning the company to better respond to market conditions included closing about 15 manufacturing plants, reducing hours for some employees and eliminating more than 700 positions globally, he said.
“Also, in 2009, we are deferring all wage increases for salaried and hourly employees and temporarily suspending the company’s matching contributions for those employees participating in the company’s 401(K) plan,” DeLoach said. “These actions, while very difficult, are necessary so that we can remain competitive in a dramatically changing marketplace.
Sounds like a familiar story right now, doesn't it? Company in trouble turns to employees for operational savings. There's just one little problem.
Sonoco produced record sales and its second-best base earnings performance ever in 2008, despite the global economic crisis, the company’s chairman, president and chief executive officer told shareholders at their annual meeting Wednesday.
[...]
Because of economic conditions, the board decided to keep the quarterly dividend payout at the same level that it was in 2008, DeLoach said, but the board remains committed to its long-term policy of increasing dividends when business conditions allow.
For the year 2008, cash generated from operations totaled $379 million, and while that was down 15 percent from the previous year largely because of changes in working capital, cash flow in 2008 ranked as the third highest in company history, DeLoach said.
By year’s end, Sonoco’s total debt had declined to $690 million versus $850 million at the end of 2007, he said.
[...]
Since 2000, the company has returned more than $1 billion in cash to shareholders in the form of dividends and share repurchases, he said.
“Few companies can match the 84 consecutive years that Sonoco has paid dividends to its shareholders,” he said.
Yes, that's from the same article. I've mentioned elsewhere that the key to keeping your employees from organizing is treating them fairly. How fair do you think Sonoco's employees will find it that their pay and benefits are cut in a time of prosperity, while the shareholders, who contribute nothing to the success of the company, not only saw no decrease in their dividend but were considered for an increase?
The next time someone tells you that values are to blame for our screwed up economy, feel free to agree with them. Just make sure you point out it's the corporate values that are at fault.
60 comments:
The next time someone tells you that values are to blame for our screwed up economy, feel free to agree with them. Just make sure you point out it's the corporate values that are at fault. I thought that the free market was supposed to sort all this out so that everything comes out just fine in the end....
... Oh, no wait, all those free market models require that every constitution be an "ideal free actor." But the corporate muckimucks have misread that to be "Ideal-free actor" ... and the employees with no organization are not "free" and barely actors.
constitution = constituent
I'm thinking I need to take a look at Sonoco's executive compensation arrangements. I have a strong suspicion that stock price plays a very large role.
YOu make a valid point. what needs to be remembered is that these companies are operating on a margin, and whether in good times or bad they want to maintain that margin for shareholders. This is to keep capital investment in the business. This is why the "rational" actors should invest in the company and set up an organization for themselves
Carlton, if the "rational actor" is an employee, they cut back on any spending that isn't absolutely necessary, which means they're not contributing to economic recovery. Then they organize.
The rational investor who can look more than one step into the future gets the hell out of Sonoco stock, because being rational, their portfolio is diversified. That means they want nothing to do with rewarding the executives who are favoring their own short-term gains over a strategy that's better for the economy, since a company that's better for the economy is better for the bulk of the investor's portfolio.
Yup, this definitely struck a nerve with me.
My company just froze pensions last week for all employees - one employee in the same branch as I work has been with them for 21 years and was about to retire once she reached her 25 year anniversary because of an increase in pension payouts once she hit that milestone. Now, her pension is left where it is right now but her 401k is in the shitter because of the stock market. She'll have to stay on even longer just in hopes of her 401k recovering.
My region has shown consistent 7%+ increases in revenue year after year, but the company continues to make cuts on employees because other regions are not performing as well. I say fuck that, force the employees in THOSE regions to cut back their hours to part-time instead of salary - not the regions raking in the $$$. They cut our expense reimbursement (even though it's set by the Fed), no merit raises this year (which are generally only 3% per employee), no bonuses for the managers (boo-hoo), froze the tuition reimbursement (luckily I graduated before they did that), and continue to try and find new ways to screw us in the ass without causing an uprising. All while our CEO brings home $1million paychecks.
I hate corporate America. Greedy fucks.
Stephanie,
Is there some problem with our "rational actor" as the employee moving on to another company. Why would the rational investor leave if he is being compensated. It's laughable. You are looking at this in an emotional mode, not rationally. As a rational actor I will invest in the company which rewards me with short term as well as long term capital, insofar this provides me with the ability to continue to invest, not just in sonoco which may or may not be a bunch of fools, but also in the greater economy. This leads to recovery. As an investor we look for situations which will benefit us long term as well as short term.
Carlton, if your argument relies on employees being able to pack up and change jobs at will in this economy, there's no point in talking to you. You're also ignoring the huge gap between ideal and actual investor behavior. You're hardly a poster child for the rational actor if you have to put on blinders to explain your thinking.
Stephanie,
I must gracefully disagree with your caricature of my argument. First, I would suggest arguing the philosophical point. Why can't an employee pack up and go elsewhere if they believe that they can make out better for themselves. The point is not an ideal, because the ideal doesn't exist. Ever, in human history. Where is it written in recorded history that you are guaranteed anything? If an employee thinks that they are getting the shaft, they have the option to leave. How is that blinders? they may get a better job, they may not, they may stay home and collect unemployment. Rationality implies that you look dispassionately on any given situation.
And Carlton, to answer your question about why an investor would leave, it has to do with being able to do math. It's a simple matter of percentages. If a company's executives are pillaging the economy for their own profit, an investor who owns more than one company's stock is better off not being bribed into abetting it by keeping that one stock's price high while the rest of their stock continues to tank.
Why is it that free-market wankers never understand that the money in the stock market is not circulating in the economy or that the selfish decision almost always has only a the most short-term of advantages? Don't you remember the adage that the way to identify a con is by the appeal to greed?
Rationality also implies that you don't give equal weight to outcomes with unequal likelihood.
Well Stephanie,
Money in the stock market is circulating, through dividends which are paid out to investors and subsequently used for further capital investment. Also, there are people, the investor "class" if we want to call it that who make there living of of dividends. They buy clothes, food, pay for housing, cabs all different manners of commodities. Also, as a free market "wanker" the most important thing to me is the freedom to choose, whether you make good or bad decisions.
Also in reference to the investor who won't keep one stock because the economy is being pillaged. Some industries are cross cyclical, in that they will perform better during downturns than during an upturning economy. This is the nature of the beast and it is up to the investor to make rational decisions for himself, and that may affect a business in a bullish or bearish way.
What we need to ask ourselves is who benefits. When individuals have the freedom to choose they will make the most rational decision based on their situation
Carlton, find one study of human behavior that actually says we make rational decisions. Just one.
Then please go learn something about capital.
nice response,
it's called, in economics, about what we are debating, the marginal utility. here is the wiki entry.
http://en.wikipedia.org/wiki/Marginal_utility
Please, as we are having a civil debate, please don't tell me to go learn something. that is not how civil debate should be handled. Any response...
Well a good debate, if you would like to debate some more you can read more free market wankery at freemarketlibertine.blogspot.com
Nice talking
Carlton, I've put the basic assumptions of your philosophy in quotes. I've mocked you. I've called you names. I've told you to go get a basic education. What rational person would look at that and decide we were having a civil debate? I'm poking at you because, as part of the problem, you piss me off.
In order for us to have a debate, you would have to demonstrate some ability to turn your free-market word salad into statements that actually connect to what has come before and to produce some support for your absurd assertion that humans are rational. A theory about a mechanism by which humans could potentially make predictable decisions, particularly when said theory doesn't predict actual behavior, isn't going to cut it.
Well, I apologize for your inability to carry on a civil debate as obviously I am simply a troglodyte in comparison to the brilliance of your nuanced, screaming insanity. What accomplishes more, civil debate or you questioning my intelligence? Of course you can't carry on a civil debate about a philosophical point as you will LOSE. This is why you want to mock me. That is unfortunate, as I am always happy to discuss various topics with people I may not agree with. I'm sorry you are still stuck at the Days of Rage imagining that yelling nonsensical irrational arguments at the top of your lungs will somehow make you win the day. The sad thing is that you are one of the people who would like to silence any dissent from the commissariat party line as when individuals act on their own self interest, it is much harder to coerce them into your false utopia. I may piss you off, but take even greater rancor in the fact that I laugh off you meager attempts to bring me down to your level. Good day madam
Hey, JLK. Sorry to hear about your company. One thing to note about the pension, though, is that unless you have a bunch of people who work most of their career there, the employees might generally be better off with a company 401(k) or 403(b) contribution that costs the company about the same amount. Not that most companies trade in pensions for something of equivalent cost, particularly right now. And it won't help your coworker either.
As for the pay, during the time you would have been working for this company, 3% was not a merit increase. It was a cost-of-living increase, so the money you got paid in stayed the same value despite inflation. It's really only a merit increase (or demerit decrease) to the extent it strays from the rate of inflation. That would be the rate of inflation including health care increases, by the way, which has actually been more than 3%.
That does suck, and I hope you get to move on to something better very soon.
This is pretty indicative of the bizarre american notion that an investor, having earned one dollar, is somehow entitled to another. They are even so privileged that the second dollar will come at the expense of the person who created the value through his own effort. It's outright theft couched in terms of freedom and choice. Employees are also free to choose to unionize and demand fair compensation. But I guarantee it will be more profitable if the executives realize shareholders is only a subset of stakeholders and give their employees what they deserve on their own.
Investors and employees each have an important role to play in the success of a company, and privileging investors over employees so heavily will usually be a bad move in the long run.
Carlton, I told you what you need to do if you want debate. How hard can it be to find evidence for the idea your whole philosophy is based on?
Richard, there's actually good, solid data that treating your employees fairly and well increases productivity and profitability. This is why magazines like Forbes run issues on the best companies to work for. You can do a lot if you get to choose your employees and they like you.
i'll bite,
You want proof of the power of the free market, free enterprise system. Look at the United States of America vs let's say Africa. Start them both off in 1800. Both countries with abundant natural resources and human capital. One, the United States, believed that the individual should keep the fruits of his labor with as limited government intervention as possible. Not a lack of government mind you, but a central government to ensure market fairness and provide a legal construct with which to make sure that individuals would be able to pursue there own self interest.
Now, Africa. Dirt poor. The colonial powers still controlling large parts of the continent and wither assisting in the delivery of theft labor, slave labor. A monarch in a far-away country telling the individuals that they didn't know what was best for them.
Move forward 200 years. Who is better off?
Craptastic example, Carlton (and, I note, not evidence of humans making rational decisions). You do know that the idea of a stock market was codified to fund colonial exploitation, right? The people who are doing well are the ones who refused to recognize any obligation for their labor to benefit the stockholders and enforced that refusal. That would be the U.S., in case you're curious.
ok,
When you go to the grocery store do you buy more groceries than you can afford?
Look at the United States of America vs let's say Africa.Carlon, The United States is a country, and it did not "start off in 1800" and
Africa is a continent with about 47 countries in it. None of them "started off" in 1800 either. So the basic facts make whatever you are going say next somewhat foundationless.
As you point out, the history of "Africa" (countries in Africa, by which you mean some but not all of the Sub Saharan African countries, is very much affected by colonial impositions that did not affect the United States. This all matters, but the difference between a "free market" and whatever you think was going on in "Africa" is probably not the explanation for why corporate greed in the US is somehow OK.
Dude, do you think you're talking to a college student? I have bought groceries I couldn't reasonably use, since my estimation of my time and inclination to cook them was wrong.
was that a rational decision in the short term? if you continue to obfuscate and not pay attention to the central point I will break it down to dummy language for you.
Oh, goodness, no. I wanted to believe that I would use them, because I wanted to be the kind of person who would rather than the person I am, so I let myself believe that I would. Emotional and irrational, just like an awful lot of decision-making. See cognitive biases for a better understanding of the idea.
Mr. Carlton, as your brother, you know that I disagree with the "rational actor" terminology as a description of actual human beings. Sometimes rationality is more like RATIONALIZATION, working in reverse to put the imprimatur of our own free choice onto the cards we've already been dealt. And there's a mountain of evidence that peeps be just too damned susceptible to hysteria of all sorts even when their economic self-interest hangs in the balance. When Alan Greenspan talked about "irrational exuberance", he was not quoting Adam Smith.
But I think that the free-market system Smith described, most faithfully carried out in the United States, is the best model for generating economic growth and class mobility the planet has ever seen. The results speak for themselves.
Is EVERY disparity intractable as well as appropriate, because "the invisible hand" of the market ratifies it? I don't think so, and I know that neither do you.
So regulation and reform have their roles, but trying to re-invent the market economy from the top-down driven by a rage that the free-market ITSELF is the cancer---that's just throwing the baby out with the bathwater.
well you may be a koolaid drinking true beleiver who is still enthralled by the silly arguement from your socialogy 101 course, but the average individual is rational. I'll break it down simpler for you. If you have fity dollars to spend at the grocery store and it needs to last you two weeks, would you buy all candy bars, or food that you can subsist on
William, you I think I could happily debate with, on questions like what kinds of regulation and organization would be required to balance power so that people and institutions have real choices to make. Could be fun.
Carlton, and yet, people do go out and buy candy with their food money, particularly people who are tired of making rational choices that are no choices at all (i.e., those forced by poverty). Those fallacies aren't based on sociological theorizing. They came out of, ironically, mostly marketing/advertising research, looking at how real people make real decisions so that companies know how to get them to make decisions in the companies' favor. No Kool-Aid, just ground-level economics.
marketing is socialogy. The PHILOSOPHICAL arguement is that on any individual transaction, two rational actors will make a decision that is in their individual self interest. Is life perfect, no. Do people make stupid decisions, yes. There is always a choice. This is the overall arguement. Don't tell me that people do not have choices. That is a cop-out.
sometimes, you have to choose between two crappy choices, but it is still a choice
Carlton, the "PHILOSOPHICAL arguement" is that you sneeze because you've been invaded by a demon. It doesn't mean squat in the real world.
And if you can't tell the difference between "making a choice that is no choice" and not having any choices, I'm just going to have to go back to insulting you.
Holy shit Carlton, you really aren't very well versed in history or geography and while there are aspects of your arguments about economics that make some semblance of sense, they are shortsighted. But I am not as well versed in econ as Stephanie seems to be. I am however, a huge history buff - in particular, I find empire and colonialism absolutely fascinating. While I imagine that Greg could probably put my understanding of the African continent to shame, he didn't really dive into it.
The American colonies were absolutely nothing like the colonies of Africa. Africa is much closer to Europe and there was a great deal of travel around the outskirts of the entire continent. The folks who chose to live in the African colonies rarely made them their permanent home - they went from their home countries and did their best to make money and take that money back home with them. The colonies were at most, a second home.
The vast majority of Europeans who went, were young men who were out to seek their fortunes and wealthy people who wanted to see exotic lands and/or go adventuring. Many of them were just there for a few months, to a couple of years. And they went, safe in the knowledge that as long as they could get back to coastal civilization, it wouldn't take long for some ship to come by, that could take them back home.
The American British colonies, on the other hand (as well as most of the other American-Euro colonies) were populated by folks who intended it to be a one way trip, from the very beginning. It was quite far away and the people who came, came because they wanted to get away from Britain and find self direction. They had no intention of ever going back - most of them. They became native, as it were and soon came to resent the intrusion of colonial governors who were more beholden to the Empire, than they were their fellow colonists - though many colonial governors were more beholden to their new home and it's populace, than they were the crown.
Ultimately, European politics was what drove and made possible, the American Revolution. We had the same firepower, in large part thanks to those damned Frogs.* We had men with education and experience in the tactics of warfare - many of the revolutionaries were ex-soldiers and our officers were mostly ex-British officers. We had incredible advantages that were not to be had by the African natives - or the natives of the Americas for that matter.
Comparing the Americas, to the Africas, is like comparing apples and brussel sprouts. Moreover, it betrays a remarkable ignorance of history - not just African, but American as well. Forgivable to be sure, but not so much when you throw it out there to support absolutely absurd economic theories - economic theories that have been tried and failed.
You sir, are a boor. And a boor of the very worse kind, an ignorant boor who arrogantly believes he is far less ignorant than he is.
*I mean that sarcastically - I do not have anything against the French.
Carlton, Ayn Rand is dead, and her idiotic philosophy should have died with her. It's dolts like you who keep dragging its rotten corpse from the grave and calling it a diva.
So if you are trying to impress anyone, it's not working. Go Galt yourself.
well i appreciate the piling on, in regards to Africa vs. the USA that is a though experiment. Try it sometime. Although as it appears that I will not be able to agree even to disagree with you folks let me share two points. In regards to greed, it is a natural function of the human condition and can;t be removed. The best system to combat this, capitalism. Secondly, I would have to say that it appears that as a believer in individual liberty and most of the folks posting here believe that we are simply animals, to be herded for our own benefit. This is an unfortunate turn of events. Never before in recorded history have the masses been able to improve there lot like in the united states of america. Ever, in recorded history. That is because of the free enterprise system. I bid you all a good night, I'm going to go jerk off to my copy of Free to Choose.
...in regards to Africa vs. the USA that is a though experiment. Try it sometime.Try what? Conflating two entirely different situations and trying to pretend they are reasonably comparable? Why in the hell would I want to do that? When I engage in thought experiments, I like to maintain some semblance of reason. Otherwise said experiment is completely and utterly useless. I may be crazy, but I'm not stupid.
In regards to greed, it is a natural function of the human condition and can;t be removed. The best system to combat this, capitalism.First, I think it's entirely possible to combat greed - don't be a greedy fucking bastard. Don't raise your children to be greedy fucking bastards. Just because "everyone" else is doing it, doesn't mean that we have to engage.
Second, this is an argument against pure market capitalism, because we have a great deal of evidence (more than a century and a half of U.S. history) that contradicts your assertion.
Try again.
Secondly, I would have to say that it appears that as a believer in individual liberty and most of the folks posting here believe that we are simply animals, to be herded for our own benefit.NNNTTT!!!! Wrong again and you lose!
There is a huge difference between individual liberty and pure, free market capitalism.
I am all about personal liberty - given questionable issues, I believe that it is essential to err on the side of liberty. However, given that greed is in the mainstream of the human condition, it behooves us to regulate the markets to some degree. The reason it is so very possible to move within classes in the U.S., is because we do not have pure free market capitalism.
I bid you all a good night, I'm going to go jerk off to my copy of Free to Choose.Have fun, it's almost evening minutes time in California, so I will be talking to the most beautiful, stupendously brilliant woman ever...And trying to wash a very nasty image from my brain. Thankfully, I will have wonderful help with my lover and intellectually stimulating partner.
If I could just wade my way in through the smug...
It seems there are two caricatures pitted against one another here. On one side, there is the slobbering white male-type, drunk on the romance of quaint philosophical relics like "individualism" and "rational actors", while on the other, a cadre of all-too-clever aspirants to the Ruling Class, who would enforce economic parity by way of fascism.
These are the terms on which it appears for the debate to be taking place. Of course neither side sees THEMSELVES that way, but these are the straw men against which both parties seem to be assailing.
I see that someone called "gregladen" went to the trouble of posting a comment on "Carlton's" blog, which is called Free Market Libertine. It read, with a link to this thread:
Here is an interesting piece on what is WRONG with the free market. Supposedly.Now, that seems like an invitation to contribute a "free market libertine's" perspective on a populist rant. There's even the hint with "supposedly" that there might be a safe port for views of that color. If it wasn't deliberate, then it was a sloppy use of words.
So is that the drill around here? Trolling for sincere individuals that happen to hold certain beliefs at which you are well-practiced ridiculing, then luring them into a rhetorical gangbang under the pretense that ideas are being discussed? Does anybody want to say that this is a way to conduct a meaningful debate?
Shame on you all. Stephanie, I'm really disappointed having read one of your pieces about studied, self-enforced skepticism. It was eerily similar in tone to something I had JUST posted myself. Sadly, I detect nothing but certitude about a whole class of arguments based on your display here. Surely the person who wrote that nakedly honest ode to humility can do better to sharpen her intellect than fill a room with people that agree with her to beat up on unsuspecting strangers.
Or is this just about stirring things up, getting OUT THERE and promoting the blog? Very well. My blog is called One More Asshole. You are all a bunch of motherfuckers. Come read my stuff and suck my dick while you're at it. Are we getting smarter yet?
I'm going to go way out on a limb and suggest that a real conversation can be salvaged from this train wreck. I think the basic question here is about where the "wisdom" in the market comes from. Is it the PLANNERS, or an emergent phenomenon arising from the pandemonium of transactors acting in their own self-interest?
If you find yourself under the impression that "greed" is some kind of parasitic social construct that has no role in wealth creation, if you believe that "rational" self-interest at the investor level is a myth which feeds a system that has no connection with "the REAL economy", then explain the uncanny success of futures trading markets at predicting real-world events? It's hard to say the money's got nothing to do with it. The parallel parallel processing of countless cost/benefit calculations makes a better explanation.
Of course, in the game of life, not every player is equally informed to leverage the market system for their maximal short AND long term gain. But his seems to me an argument for more education, not a self-righteous regulatory machine that wants to grow square watermelons.
Seems to me that the "Africa Vs USA though-experiment" could just as easily be used to "prove" that a stable, fair and efficient government which provides some social security is a requirement for economical growth. Africa isn't exactly known for governments of this type.
You could even argue that the market in Africa is more free than in the US, since it's virtually unregulated in many respects. And it's not because of rampant socialism that Africa has one of the largest gaps between rich and poor in the world.
In short, I don't think this "thought experiment" supports a free-market argument at all. Even if you ignored the issues that Greg Laden and especially DuWayne already mentioned.
Back to the original topic, I've never understood the blanket dismissal of unions as somehow being anti-free-market, or even evil. If producers are free to organize into organizations called 'companies' to get a better position in the market, and investors in organizations called 'banks', why can't workers organize into organizations called 'unions'? If it's a free market, then individuals can do what they want to get a stronger position in that market, can't they?
You could probably even take this further and argue that a democratic government that puts regulations in place is also one of the organizations that could arise in a free market. Citizens merely organize themselves into political parties to protect their interests in the market.
In the end, I think the dichotomy between free market and regulated market is a false one.
William, if you'd rather talk about etiquette, we can have that discussion too. Someone has made you a polite offer. Do you choose between "Yes, please" and "No, thank you" or do you lecture them?
slobbering white male-type, drunk on the romance of quaint philosophical relics like "individualism" and "rational actors"What I see instead is young; male, yes, but you did call Carlton brother; prey to the naturalistic fallacy and trying very hard to retrofit "shoulds" to the "is"--to the extent of denying actual evidence of how human behavior works in favor of philosophies that agree with his assessment of how it has to work for the shoulds to be right.
As for the futures market, I haven't seen any evidence of uncanny abilities. I have seen gamblers who think they always win in the end because they remember the ups and forget the downs.
self-righteous regulatory machine that wants to grow square watermelonsNow who's building strawmen?
The naturalistic fallacy, oh sweet zombie Jesus. "Carlton" is a surname we both share. He is LITERALLY my brother.
"As your brother" means that he would be aware of our differences because we talk regularly. Saying that I KNOW he's not in the tank for TOTAL laissez fair capitalism means I am familiar with his positions. Easy mistake to have made.
The square watermelon comment was the result of capping off a too-long post with as much verve as I could pack into as small a space as possible. It's shorthand for calling into question the efficacy of engineering social justice through central planning, however well-intentioned.
This is where I think we can find common ground, between the egalitarian ideal of the free market and pragmatic tinkering. How to equip the most with the best possible information for optimal decision making, because I still believe that choice is an important principle.
Science tells us that we live in a deterministic universe. This doesn't mean, however, that we cannot claim autonomy over our actions. The better informed we are about risks and benefits, the more we reflect on our reflections of reflections (of reflections), the more we can bootstrap our way out of dead-end determinism. Evolution toward this condition has been billions of years in the making, and it continues to perfect itself, with plenty of room for our own engineering efforts.
My own view is that the innovation will not come from constructing padded cells for everybody, but to make it widely known how to avoid running into walls.
As far as futures trading prediction markets, it's certainly true that they are just as vulnerable to distortions like speculative bubbles, short selling, and the like, but these are the exceptions that prove the rule. Unbridled greed and manipulation poison the well for everybody and call for a response, but the fact remains that prediction markets have consistently outperformed opinion polls, for instance, in projecting the outcome of political races.
And yes, I know all about keeping track of hits and misses.
I have noticed a trend with these internet debates in which the substance of an opponent's remarks is willfully overlooked in favor of snide, meta-criticism of the opponent's style or authority to register opinions at all. To some degree, I have just performed the same trick in the preceding sentence. We would all be better people if we tried to police that just a little bit.
Evolution toward this condition has been billions of years in the making, and it continues to perfect itself, with plenty of room for our own engineering efforts.OMG, my teleology buzzer just went off and I can't stop it ... Please don't say stuff like that!
I have noticed a trend with these internet debates in which the substance of an opponent's remarks is willfully overlooked in favor of snide, meta-criticism of the opponent's style or authority to register opinions at all.Very true. Sophistry is making a real comeback on the intertubes.
Having said all that, I have nothing substantive to contribute to the actual discussion. Just checking in.
I guess you could read what I wrote as saying that something has been evolving TOWARD some ideal, rather than simply APPEARING that way. I suppose it's my own poor choice of words.
Surely in the present, we can IMAGINE an ideal toward which an evolutionary process MIGHT evolve. We could even try to help it along. But in no way do I posit any sort of metaphysical PURPOSE behind the progression itself. Your teleology buzzer seems to be on a hair trigger.
I can relate. Reading The Ancestor's Tale, Richard Dawkins repeatedly takes pains to ward off the "primitive species" fallacy, as if nature had some destination in mind when it produced organisms that just happened to be adaptive enough to their environments at the time to carry on the germ line. Letting such offenses stand does a disservice to the public understanding of science, while pointing it out can be a real teaching moment.
Now pardon me for making your little buzzer explode, but even people like Richard Dawkins do not dismiss the possibility of CONVERGENCE, the idea that given certain environmental constants, particular features are BOUND to evolve. The eye, for example, has evolved independently many times. There is no need to posit foresight of any kind.
I hope I've been clear.
William, sorry, yesterday was a very long day.
I was referring to the naturalistic fallacy in the sense that, because the U.S. markets are the way they are--in terms of regulation, types of trading, etc.--many people believe this is automatically the way they should be. This, of course, ignores the fact that they haven't always been this way and that there are other models to look at. That's all I meant by that.
Perhaps my google fu is weak this morning, but I'm not finding the data behind the idea that the futures markets are great predictors. Do you have a link that shows where this comes from?
Calling a free market an egalitarian ideal is problematic. A market is inherently a gamble, unless you have the power to influence the factors that affect it. As such, it isn't even open to a very large number of people who don't have the money to gamble. Another large percentage of those people don't have the time to invest along with their money in the education you're calling for.
I'm not ready to call for a lot of specific regulations of the market. I've generally been in favor of the market, and I'm invested in it. But one of the things that this downturn and the manipulations of the last few decades has done is make me question the assumptions on which I've based those decisions. A bunch of them, even as basic as historical rates of return, are not turning out to be what my market education has told me they are. This makes me wary of education as a sole solution.
Right. I agree that you can't derive an ought from an is.
I'm sure there's nothing wrong with your google-fu (one of my new favorite words), but here's a decent article that took a couple seconds to scratch up:
http://www.redorbit.com/news/science/180134/new_futures_market_gambles_on_hurricanes/
It's about a futures trading market for hurricane prediction. The article is datelined 2005, and on follow-up, I didn't find a great deal of analysis about the market's actual record of success at predicting hurricane landfalls. It's important to recognize, however, that this particular project, launched by three UofM professors, was intended as a diagnostic tool to find out what people know, and how know it. For instance, judging by how much the trades fluctuate following an official NOAA report, a useful measure of how much the market values NOAA predictions can be obtained. So THIS particular market is a research tool as much as anything else, but here's some nice quote mining nonetheless:
University of Louisville finance professor Russ Ray, a former economist with the State Department, says the hurricane project is the kind of "decision market" that has burgeoned in popularity recently because scientists, politicians and business people have found the markets strikingly accurate. Since its start in 1988, he said, Iowa's futures market has accurately predicted the popular vote outcome of every presidential election.
Futures markets have also predicted Academy Award winners and film box office receipts with uncanny accuracy. Companies like Hewlett Packard and Eli Lilly have based corporate decision-making exercises on the futures market concept, Ray said.It seems like we're both generally in favor of the free market, and may only part company on the means to make it compatible with the kind of society we envision for our fellow inhabitants on this planet. For instance, I think that Big Labor as-we-know-it has outlived its usefulness to tradesmen. It's killing those industries in which it's been most successful at what unions do best: securing the most compensation possible for the least amount of work. This is not to say that employees on the short end of the stick shouldn't organize. Fortunately, the resources are widely available now for them to do just that and without the involvement of Hoffa-like gatekeepers.
Later today, I'm going to post a piece on some of what's wrong with obscene executive pay, including an interesting study that demonstrates a point at which rewards exceeding the fair market value of the work being done actually HURT performance.
Whoops. Full linky:
http://www.redorbit.com/news/science/180134/new_futures_market_gambles_on_hurricanes/
I have to take issue with this whole "corporations are bad" "corporations are greedy" tone that Stephanie (and others take). Unfortunately that mantra is often what is taught for economics these days in our schools and universities because those who graduate believing it become useful idiots for the statists (those who try to grab increasingly more national power to try to impose a "utopia" where social and economic outcomes are somehow guaranteed through the power of the government). People don't need unions, they need discipline and self control. Carlton is absolutely correct that an employee being abused has the ability to leave. The problem is that today's culture has taught people to borrow thousands in debt and have nothing saved. When you are up to your eyeballs in debt and don't have an emergency fund of 6 months in expenses, you aren't exactly inclined to quit your job or better yet retool if your skills are obsolete. This bad behavior doesn't stop at the little guy. Do you really want to know why corporations "reward" the investor class Stephanie? It's because any CEO worth his salt doesn't want to see his company stock reduced to single digits and his symbol become a pariah on the exchange. Corporations are dependent on that influx of investment capital for survival and a mass exodus from your symbol can quickly spiral into bankruptcy. That's why some of them cooked their books in the past. By that same token, investors are more than happy to dump money into corporations because generally the return on investment is higher than what is offered by the banks (which by the way are borrowing the investor's money to lend to stupid consumers who again insist on buying TV's they don't need @18% interest). In the book "The Millionaire Mind," the top factor of the uber wealthy is integrity...not luck...not screwing the little guy...not lying. Everyone can point an anecdotal example of some corporation or CEO that acted inappropriately, but those are the few and the extreme. It's not capitalism that is broken, but all of us as a nation. Whether you are a small guy on $30K a year or a CEO on $3 Million a year, we as a nation have borrowed money and leveraged it in risky ways to make our bank accounts bigger, our companies larger, our houses bigger than we need, our cars newer and more expensive, or our TV's over 50" and it's all coming crashing down like a deck of cards. We don't need to rebuild everything from the ground up, but rather regulate everyone (corporations and consumers alike) from this insane borrowing and leveraging. Personally, I'm not participating in this recession nor did I the last one, not because I'm uber wealthy (I'm not and I make less than 100K a year), but because I didn't make stupid spending decisions and have the economic freedom to give my employer the middle finger if he tries to screw me. Why would I pay 2% of my paycheck to a bunch of bozos to "negotiate" with my employer on my behalf??? The answer to that question without question is always "I've been brainwashed all my life to think corporations and CEO's are out to screw me" or "I've made stupid economic decisions and didn't save an emergency fund" or "I didn't keep my skillset current so that I could find another job when my field becomes saturated or obsolete."
So Will, under all the straw men and other fallacies, you're basically saying that poor people deserve to be poor, right?
No, there will always be a MINORITY of poor people who are that way because of something legitimate: an injury, plain bad luck, etc. However, the vast majority of people that are poor are that way because of bad choices (not taking advantage of public education, children too soon, borrowing too much money, etc.). Anyone who works hard and makes good decisions has a very good shot at economic success. I've known many wealthy people who lost everything and got it all back...two or three times...because they were willing to work their butts off, take advantage of breaks, and used self discipline.
You've excluded a huge group whose bad "choices" follow more or less directly from events that may even have predated their births. The sort of lessons and values that prevent teen pregnancy, school dropouts and the like are not obvious or even readily available to MILLIONS of people. This is not to suggest that a state solution is in order. But let's get real. It's just too convenient to overlook the plight of these, your fellow Americans.
Those kids by in large still have access to public education. Parental values do play a factor in giving some kids a better shot than others, but it's still on those kids to get an education and do the right thing (granted public education could do a much better job teaching values and life lessons). My wife is a perfect example of what you are talking about. She grew up dirt poor in trailor parks (when she had a home) and her mother has been divorced SEVEN times. Her mother provided nothing positive in the lines of moral and life lessons and didn't put a lot of effort into her daughter's education. However, my wife took the horrible life around her and used it as a lesson on what NOT to do and worked hard to be different. It happens all the time (just not often enough). It's fine to feel bad for those kids who don't make it, but ultimately it's on their hands (and heads) what they make of life and saying they chose the wrong path because their parents sucked is a cop out. I didn't come from quite as humble background as my wife, but I lived on minimum wage for years after graduating from college (which I went to on loans and bartending at night). After multiple job changes and not getting anywhere I completely retooled myself for an unrelated career path and achieved success for myself. I CHOSE not to get married until I was 27. My choices allowed me to live confortably on minimum wages for several years. I see uneducated Hispanics all the time working 2-3 jobs "making it" in a country where people born here from the "hood" or the "trailor parks" spend their time making excuses.
I would be careful using the word "cop-out" when your reply is entirely anecdotal. Anyway, big respect to you and your wife. What you guys have managed to do is not easy and it WOULD be great, as you say, if it happened more often. Matter of fact, it would be great if it happened HALF the time, but I'm willing to bet we both know that's not the case.
Parental values do play a factor in giving some kids a better shot than others, but it's still on those kids to get an education and do the right thing.A factor? A factor? Well, I suppose that's mathematically correct. Parental values are a HUGE factor. We are WIRED to emulate the authority figures that imprint themselves on us. This is EXTREMELY powerful stuff, and you seem to place it on par with factors like whether or not there is cable TV in the home. You also choose to ignore the effect of parental pathologies being reinforced by virtually every vector a developing child is likely to encounter in its cultural environment: friends, celebrities, local gang elements... The list goes on and on.
Your answer is to say that SOMETIMES it still turns out OK. The evidence? Your wife. At this point, I'm going to suggest that you dodged the question.
I don't say, "Look at this problem, now what is the state solution for it?" but I DO say, "Look at the fucking problem!"
You know William, I may not entirely agree with you, but I have to tell you - you just earned a great deal of respect from me. That's not to say that I had no respect for you before - you certainly haven't said anything that was cause for a lack of respect. But that was greatly appreciated.
Ironically, I am one of those people who made bad choices to become poor (though neurological problems didn't help). But I have known a lot of poor people who are poor because they've never known anything else. And I've known many of them who worked their asses off to make better - only to get knocked down because of circumstances beyond their control (in a way that would be me too - before the economy sank, I was building a pretty good business).
Seriously. thanks.
Yeah, but you're blurring the point. The founding fathers only guaranteed life, liberty, and the PURSUIT of happiness. The government is limited with negative rights to prevent it from encroaching on those items. It's not the federal government's responsibility to guarantee success. Everyone has a shot at success through the public school system. Yes, parenting plays a huge part on a child's emotional well being and will ultimately impact whether the child takes advantage of the opportunities the state has provided, but it is NOT the federal government's responsibility to ensure those who would fail ultimately take that opportunity. The truth still stands that if you are poor, it is generally because you made bad choices EVEN IF your bad choices come as a result of bad parenting or simply ignorance. Capitalism nor the government failed those children, but rather the parents and the children themselves. Even most of those who worked hard and are still struggling fail simply because they don't understand basic financial planning (i.e. how to budget, how to buy a house you can AFFORD as opposed to what the bank wants to lend you, how to save, etc.). By the way, yes, I know my story is anecdotal, but for the record the original post is, too. All these stories we keep hearing about CEO's and corporations gone bad are anecdotal stories and represent a fragment of the companies out there.
Duwayne - Props to you man for being out there trying. As I said before, I know lots of people who went broke and turned it around again so keep on fighting and don't give up.
Will, you are dreaming if you think that everybody has the same shot at success, save an evenly distributed risk. What you seem to be doing is explaining away a pernicious social ill because you'd rather pretend it doesn't exist or that its scope is entirely contained within the individuals that fall under its sway. You may disagree with "statist" designs to address said social ill, but that is a poor reason to overlook it altogether.
I feel compelled here to assure you the free-market system does not fall on its face if there are ENTIRE CLASSES of people alive today who get the shaft because they were born to get it. Your argument is that most of them, verging on all, deserved it. MOST. Say what you like in this thread, but I want you to really, really think about that.
Remember, climbing down off of that position does not mean the free market goes out the window. It just means you have to tackle a really tough issue, if you care to make it your business. Or, you can just say, "I feel confident the solution to this problem is market-based, but I can't be bothered what it is."
But please, man, don't make a mockery of what makes a choice because you think it cedes ground to some statist bogeyman.
You wrote:
"The truth still stands that if you are poor, it is generally because you made bad choices EVEN IF your bad choices come as a result of bad parenting or simply ignorance."
Even if.
I was never implying that everyone had the same shot at success as in everyone is born with equal qualities or born on the same "starting square on the game board". I only said that everyone has the ability to succeed and move up in our society if they make the right decisions (and it is ultimately their fault if they don't). Only someone born severely handicapped has no shot at success. All the social ills in downtown Detroit still doesn't prevent a young black man from achieving success if he wants it. Will it be harder than the white kid in the suburbs with a Leave It to Beaver set of parents? You bet ya, but success is still achievable to every person who tries. I like Dave Ramsey's example of a kid who starting at age 19 puts $2K away every year until age 26 (when he stops for a total of $16K) in a fund that averages 12%. At age 65 that kid would have 2.2 million. 2K a year is a part time job at McDonalds. There is no reason why virtually every American shouldn't retire a millionaire other than our own ignorance. Now I do agree with you that there is merit in trying to deal with social ills because it affects those of us that don't fall within it's scope (i.e. higher crime, etc.) but it IS statist for us to legislate a soft tyranny for the "good" of society rather than working through the frameworks of charities or state and local governments to address social ills. The federal government is not the place to be trying to fix this. We have been fighting the war on poverty for almost a century now and the poverty rates have remained virtually unchanged, but at least America has a system where changing social and economic classes is very much doable instead of a system where you die exactly how you were born.
You said:
"All the social ills in downtown Detroit still don't [sic] prevent a young black man from achieving success if he wants it."
Really? Then WHAT does? They're ALL just bad decision makers? Don't want success? Seems like a hell of a coincidence, don't you think?
Based on your responses, the answer is that in order to believe what you believe about free will, everybody has to own their own choices, even if that means that your definition of "choice" includes things that happen to people.
You have mentioned public education. I'd like to point out that the Founders didn't make public education the federal government's job, either, but presumably you support public schools in every state. This is not, once again, to call for extensive federal intervention into the plight of the downtrodden, but to acquaint you with the idea that the concept of "the general welfare" is not, and never has been, fixed.
As far as our definitions of free will, this is just a basic, philosophical difference that is unlikely to be resolved in this thread.
Returning to the ORIGINAL debate, does maintaining a margin for shareholders even at the expense of employees keep capital flowing into a business at the risk of LOSING the business otherwise? Is this a bit like making proactive labor adjustments to keep shareholders happy so that the stock doesn't dive and send even more people to the unemployment line?
I think Stephanie made a good point that shareholders, to the extent that they are rational actors, should think long and hard about how executive compensation, particularly provisions that are tied to stock value, effect the quality of the decisions those executives make for the long-term health of the business.
Back to that point...I think the complexities of the market limit the rational actor role. If you are an aggressive investor, then you would pull your money out of companies like GM (that is heavily unionized, has a growing pension burden, and generally very little shot at becoming profitable) or GE (whose CEO is a moron) and invest in companies that you perceive to be better run and profitable in the long haul. Many investors, however, stick with funds and are somewhat at the mercy of the fund manager or they just don't stay plugged in on what is going on in the companies that they invest in which gets us back to my original point. Theoretically free markets would sort everything out, but we have a corporation that became leveraged (to the stockholders) who now decides to give the employees the shaft (because the majority of the employees have made bad financial decisions and are living paycheck to paycheck and can't excercise their freedom to leave) because the alternative (a poor dividend to shareholders) could send the stock symbol down the toilet. The stockholders should punish the corporation, but they are either not plugged in or buy the "it's a recession I'm still getting my dividend" line instead of seeing the warning signs that maybe this is a poorly run company and I need to invest elsewhere. The few rational actors that are playing their part won't offset the masses that just see the bottom line (dividend remained high) and the CE isn't punished. Unionizing the employees doesn't fix the problem because the company is still broken. Yes, you may reduce the cuts on the employees in the short term, but again the cuts to the shareholders could send the company into a downward spiral that ends up with all the employees being jobless and the company doors closed. The employees only hope in this case is to suck it up until either they regain enough financial freedom to leave or hope that when the economy turns around the CEO will restructure the company in such a way that a mass stock exodus during the next recession doesn't mean bankruptcy.
Post a Comment