Sure billionaires deserve their money: Killing jobs is hard work

More is never enough. A few examples of the wrath of speculators illustrate the “whip” of finance capital as the world’s corporations announced their results in recent weeks.

Among the words that do not go together are “shareholder activist.” Whether a sign of the debasement of language, or that the corporate media’s myopia has degenerated to the point where speculators trying to extract every possible dollar out of a corporation is what constitutes “activism” to them, as if this was some sort of selfless activity, these are the words often used to describe wolf packs that grow ever hungrier. Not even one of the world’s biggest corporations, E.I. du Pont de Nemours & Company, is immune.

DuPont, a chemical multi-national that produces many products that dominate their market, has racked up about US$17.8 billion in profits over the past five years, including $3.6 billion in 2014. Its stock price increased by 20 percent last year, better than the benchmark S&P 500 Index. DuPont recently sold off its performance chemicals business, and will hand out $4 billion to shareholders from the proceeds of the sale. Surely enough you say? Nope.

A hedge-fund manager — yep, one those “shareholder activists” — has declared war on DuPont management. The hedge funder, Nelson Peltz, is demanding that DuPont be broken up into two companies, under the theory that more profit can be extracted, and he is demanding that four seats on the DuPont board be given to him. So far, at least, DuPont management is resisting the hedge funder, but did announce $1 billion in cuts in a bid to pacify Wall Street. That means that more employees will pay for heightened extraction of money with their jobs. Mr. Peltz’s hedge fund specializes in buying “undervalued stocks,” according to Bloomberg, which is code for corporate raiding. It must pay well, for he is worth $1.9 billion.

DuPont chemical plant on Houston Ship Channel (photo by Blair Pittman for the U.S. Environmental Protection Agency)

DuPont chemical plant on Houston Ship Channel (photo by Blair Pittman for the U.S. Environmental Protection Agency)

One company that has given into speculators by selling off its best asset is Yahoo Inc. Although widely attacked in the business press for having no coherent plan for growth, Yahoo did report net income of $1.3 billion on revenue of $4.7 billion for 2013, a hefty profit margin, and remained profitable in 2014. Nonetheless, Yahoo said it will spin off into a separate company its most valuable asset, its stake in the Chinese online merchant Alibaba. This is being done so that more of the profits can distributed to speculators.

If Yahoo were to simply sell its stake, it would have to pay taxes. By spinning off its holding into a separate company, there will be no taxes paid, and thus more money will be stuffed into financiers’ pockets. “The decision,” The New York Times reported, “cheered shareholders because they will directly reap all the remaining profit from Yahoo’s prescient investment.” Yahoo will also lose its most valuable asset, making the company weaker (and presumably more likely to get rid of some of its workforce), but speculators will make a windfall. That is all that matters in these calculations.

Even an Internet darling, Google Inc., is losing its Wall Street halo. Grumbling was heard when Google’s revenue for the fourth quarter of 2014 was “only” 10 percent higher than the fourth quarter of a year earlier, a slower rate of growth than in the past. For the full year 2014, Google reported net income of $14.4 billion on revenue of $66 billion. Based on these results, it looks as if Google will remain a going concern. Nonetheless, Google stock is down 12 percent since September, a sign of financiers’ displeasure.

But perhaps happier days are on their way. The Associated Press reports that a “pep talk” by the company’s chief financial officer “left open the possibility that the company might funnel some of its $64 billion in cash back to shareholders, especially if a law is passed to allow money stashed in overseas accounts to be brought to the U.S. at lower tax rates.”

Ah, yes, all would be well if only multi-national corporations did not have to pay taxes. But despite the ceaseless demands by the world’s financiers for more governmental austerity, more cuts to jobs, wages and benefits, more punishment, the world can afford a raise. An Al Jazeera report by David Cay Johnston concludes that U.S.-based corporations held almost $7.9 trillion of liquid assets worldwide. That is more than double the yearly budget of the U.S. government.

The results are those familiar to all who are paying attention: Rising inequality and persistent economic stagnation as working people can no longer spend what they don’t have. Almost all of the gains in income are going to the top: From 2009 to 2012, 95 percent of all gains in income went to the top one percent. The “efficiency” that financiers demand is that ever larger cascades of money flow upward. How long will we allow this to go on?

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16 comments on “Sure billionaires deserve their money: Killing jobs is hard work

  1. “How long will we allow this to go on?”

    I have a question for you, “How long has it been going on?”

    Actually, don’t answer that because this has been going on for many decades since it was many decades ago when we began to notice the disappearance of our good paying manufacturing base here in America. It has been many decades since Wal-Mart opened its doors and closed many other grocery stores and mom and pop stores that had been around for years. We traded cheap, plastic junk and rotten food over a better quality of life because many of us lived better lives even just 50 years ago.

    Nowadays, it is all about shareholder dividends and hedge funds and capitalism run amok along with unchecked corporate greed. We have consumers that can no longer even afford Wal-Mart, once called, the “low price leader.” From what I understand, a bid war just finished taking place over what corporation would purchase Family Dollar. Would it be Dollar Tree or Dollar General? Dollar Tree won that round. So now, Family Dollar stores have been bought by Dollar Tree http://www.reuters.com/article/2015/01/22/us-family-dollar-st-offer-meeting-idUSKBN0KV1PR20150122 and notice the word ‘dollar’ is in all three because Americans are flocking to these stores thanks to the low purchasing power they now ‘enjoy’ due to their low wage, non-benefit paying jobs and due to the fact that much of what they earn, they spend on housing costs because since the recent foreclosure crisis, rents have spiraled out-of-control.

    Groups are popping up all across the globe in an attempt to feed the hungry and house the homeless while we have billionaires getting rewarded for killing jobs and causing mass homelessness and starvation and how do we deal with it? We opt for homelessness and when we’re hungry, we flock to the local food shelf.

    If everyone walked off the job today and refused to go back. What would happen? If the militarized police force in America and elsewhere refused to lock people up and instead stood with their family and friends instead of standing with those that are causing abject poverty to billions around the globe, we could get somewhere. If we stopped buying and instead went back to collecting our own water, lived off the grid(like many people are doing) that would go a long way towards releasing the corporate strangle hold, but no. What do we do? Continue to take it and complain about it and hope that it doesn’t affect us individually, each and every one of us. As long as it’s affecting ‘them’ whoever ‘they’ are(and we really don’t care who ‘them’ or ‘they’ are), it’s all good. But the problem is that the greedy billionaires will not care what zip code you live in. This mess is creeping towards each and every one of us and it will be just a matter of time before we ALL are impacted.

    “How long will we allow this to go on?”

    As long as it takes to make us all homeless, hungry and then, dead.

    Thanks for a great blog, Systemic Disorder!

    • Wow! You have really put it well, Shelby. What if all refused to cooperate? What if we all went on a general strike? The whole system would grind to a halt. We don’t need the bosses, the bosses need us! When enough of us realize this …

      • Exactly! We need the coconut to fall out of the tree and hit each and every single one of us on the head and then the light bulb needs to go on, even after that! You know what we are dealing with Systemic Disorder. Hell! Systemic disorder is exactly what it is! Talk about a ‘system wide state of disorder or confusion’, we are it!

      • Jeff Nguyen says:

        The same principle holds in the criminal justice system. If every defendant went to trial rather than accept coerced plea deals, the system would buckle under it’s own weight. The status quo depends on keeping us in line through fear, class division and carefully constructed mythologies.

        • It has not escaped notice that the police who killed Eric Garner with their illegal choke holds escaped the “justice system” scot-free, while the person who filmed it is the only one under indictment. Merely one of many examples.

  2. It is beyond nauseating to listen to the right-wing radio jocks, along with many “good Christians” defend Capitalism as the only system of economics which is worth our consideration. It is also nauseating to listen to them defend these billionaires. When Oxfam report came out in which it stated that 80 billionaires have as much wealth as 50% of the world, Rush Limbaugh and his ilk rushed to defend these people by trying to tell us that these billionaires were not INDIVIDUALS, but rather GOVERNMENTS of the world, getting their riches through **gasp** taxation.

    This is, of course, a fatuous lie of the worst sort. The Oxfam Report made it quite clear that these are individuals, like the Walton Family (Wal-Mart) who are worth over HALF A TRILLION DOLLARS in personal wealth.

    THIS:

    is why God created hell for people like the Waltons.

    • But Edward, those people don’t believe in hell because didn’t Jesus talk about it being harder for a rich man to enter into the kingdom of God then for a camel to get through the eye of a needle? Does it look to you as if the rich are seriously worried about dying and going to hell? If I truly believed what Jesus is purported to have said, I’d be handing out money left and right because I’d want to get to heaven and not descend into hell. But if I’m worth half a trillion dollars, it doesn’t look as if I give a rat’s butt about going to hell.

      • Maybe we should save the Waltons and their ilk by expropriating them. Then we can say we’re doing it for their own eternal good. Let’s see fundamentalists get themselves out of that one.

      • Exactly. This comes from the odd notion that Protestant Calvinism brought to this country — i.e., that being rich is a sign of God’s favor and that you are “of the elect” and therefore, assured of a place in heaven, no matter how you treat people.

        There are going to be a LOT of very badly surprised people on the Judgment Day. Jesus is not fooled, one little bit.

    • But people like the Waltons are creating hell on Earth for us.

      • Yes, they are. (I tried to post a pic of a starving child in my first post, but the URL didn’t take for some reason).

        But while I am under command from God to help as many people as I can, to live a just life, and to not just sit back and say “Well, I got mine, too bad for you.” the fact of the matter is that we all die. I’m 66 years old and my life has gone by like …………..whiiissssssssssss…..faster than I can imagine or did imagine as a young man.

        Eternity, on the other hand, is FOREVER….and the Waltons, and all the Greed Capitalists like them, are making a really bad deal…..short term pleasure for an eternity of torment.

      • Truer words were never typed. Billions of people do not have to die to experience hell. They are in hell. Why do you think that even those who attend church and who are told that suicide will get them eternally damned, go off and commit suicide? It is because they are in a living hell. What more have they to fear when hell stares them down each and every day? Hell does not have to be a hot and flaming place. It can be starvation. It can be living in a warzone. It can be homelessness. It can be a disease that you can’t afford the medicine for. There are so many different hells depending on what you are experiencing.

        Exactly as SD typed, “But people like the Waltons are creating hell on Earth for us.” There you have it in a nutshell and so people are in a living hell. They did not have to die to go to hell.

  3. tim rad says:

    Angry after knowing the truth? Now we know what the toiling masses felt like during Louis XVI and Marie Antoinette’s reign.

  4. The Corporate Charter Revocation Movement has a website where people can vote for the corporation they most want to do away with: http://killcap.org/

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