Monday, August 23, 2004
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Deciphering Lou Dobbs
Lou Dobbs has just published a book, Exporting America : Why Corporate Greed Is Shipping American Jobs Overseas. To promote it, Dobbs gave a long interview to Bill Moyers on the latter's PBS program.
The interview provides a field day of contradictions and economic illiteracy, but the one thing that came through loud and clear is that Lou Dobbs is not the best writer in the world. Moyers quotes the opening passage from Exporting America:
I'm pretty sure I know what Dobbs meant by that second sentence -- but I can't swear complete certainty.
UPDATE: Thanks to alert reader gw, who actually went into the bookstore and discovered that the underlined sentence is written as: "Never have there been fewer business leaders willing to commit to the national interest over the selfish interest for the good of the country over that of the companies they head."
Slightly more intelligible, but I think the Pulitzer committee will be underwhelmed.posted by Dan on 08.23.04 at 01:21 PM
I think that should be "good of the country over that of the company's they head"
Who edited this book? "Company's" in this context is egregious.posted by: Appalled Moderate on 08.23.04 at 01:21 PM [permalink]
Maybe he outsourced his prose styling to Noam Chomsky.posted by: Marc on 08.23.04 at 01:21 PM [permalink]
That said Dan, what do you think about his charge?posted by: DC on 08.23.04 at 01:21 PM [permalink]
Um, do you realize you are critiquing Dobbs and his book based on the transcript of a verbal quote from his book by someone else?
It actually says in the book "for the good of the COUNTRY over that of the COMPANIES they head".
And, no, I'm not such a Dobbs fan that I already own his book, I just walked over to the bookstore next door to check. And I can only vouch for the two words in CAPS (which are, of course, not in caps in the book), the rest may have already eluded my memory on the way back. :-) There is definitely no awkward "'s" on the end of either word, though.
gw: even when corrected, that sentence does not evoke a gifted prose stylist.posted by: Dan Drezner on 08.23.04 at 01:21 PM [permalink]
Another example of the cluelessness of big media journalists.
When someone manages to find a way to link blogs with streaming technology, the blogosphere will be able to create its own, superior versions of CNBC and MSNBC. And bypass pontificating, blow-dried morons like Dobbs in favor of real expertise and insight from the blogosphere.posted by: lex on 08.23.04 at 01:21 PM [permalink]
Dan, with all due respect, you are still commenting on the transcript of a verbal quote by a journalist. I read the sentence in the book, and there was nothing wrong or hard to understand about it. I think there was a comma after "selfish interest" (which helps), and the exact phrasing may have been subtly different from the quote (but similar enough that I can't remember the exact difference, if any).
I hope you will update your blog entry to point out that Dobbs was misquoted.
The difference gw points out is between uninspired and unintelligible. The Dobbs quote you quote indicates a newspaperman who has outsourced his grammar to Shanghai. GW demonstrates that Dobbs at least has a passing knowledge of proper cliche usage and probably, alas, wrote that sentence himself.posted by: Appalled Moderate on 08.23.04 at 01:21 PM [permalink]
OK, let's focus on the logic of the statement.
Start with "never." I distinctly recall an era (lasting roughly from 1950-1970) in which it was acceptable for certain business leaders to equate the good of the country with the good of their company. As the early career of one of the three candidates running for president reminds us, US business leaders in that era were notoriously indifferent to the public interest as regards product safety, jobplace safety, and environmental quality.
Prior to that era, a long-serving president was wont to accuse US business leaders of being "economic royalists."
Prior to that era, US business leaders routinely fixed prices, manipulated markets, and destroyed competition-- not least because it was, um, legal to do so.
Is Dobbs just ignorant, or is he following his agent's advice to be like Mike?
I still don't see an update correcting the misquote. It seems pretty dishonest to leave it out, as the correct quote is, at a minimum, entirely intelligible, negating the whole thrust of Drezner's post, whatever other objections Drezner may have to Dobbs. And since Drezner responded promptly to gw, we know he he has seen the correction. If Drezner's remaining objection is that the sentence is drab, he should say that, and only that, although as indictments go, it is rather drab itself.posted by: Martin Bento on 08.23.04 at 01:21 PM [permalink]
I think Dobbs is referring to the little-known corporate entity known as the "they head."posted by: praktike on 08.23.04 at 01:21 PM [permalink]
Lou Dobbs? Didn't he retire to make a mint off of space.com?
Oh, nevermind.posted by: Don Mynack on 08.23.04 at 01:21 PM [permalink]
I believe that Lou Dobbs is putting the National Interest ahead of that of CNN's each night at 6PM EST.
However, the National Interest according to Lou Dobbs is only attracting a half million viewers each night.
I wonder what the National Interest is to the 250 million plus viewers that aren't watching Lou Dobbbs.posted by: Brennan Stout on 08.23.04 at 01:21 PM [permalink]
I suppose a patriotic CEO would allow his company to be driven out of business and everyone driven into unemployment. Havent the presidents of Eastern Airlines and Montgomery Wards been given their Freedom Medals yet?posted by: Mark Buehner on 08.23.04 at 01:21 PM [permalink]
In the spirit of your pro-outsourcing stand, I would say that Lou Dobbs is letting his leftist sympathies overwhelm any good economic sense that he might have. Clearly, the only rational behavior for captains of industry is to make their company successful. That is the only way that their employees will continue to be able to work. If they are publicly traded, they are required to run their companies to be profitable, or at least do as well as conditions will allow.
I am willing to allow companies to succeed using US labor only, if they so choose. They just need to find a way to succeed while doing so.
What is the use of being politically correct if you end up going out of business?
Lou Dobbs seems to value demagoguery over rationality.
Jim Benderposted by: Jim Bender on 08.23.04 at 01:21 PM [permalink]
Mostly a set of idiotic commenting.
I'm one of those who would fault the editor for the sentence, rather than Dobbs himself. There are two dichotomies in play: national interest over selfish interest, and good of the country over what's best for the companies. I'm inclined to think there were originally two sentences that were combined badly.posted by: Larry Faria on 08.23.04 at 01:21 PM [permalink]
If Adam Smith can read this line from his grave, he'd be less worried about the bad writing as opposed to the incredibly bad economics. But Lou Dobbs lost all reasoning a long time ago.posted by: Harold McClure on 08.23.04 at 01:21 PM [permalink]
I just checked. Lou Dobbs still makes his living as a form of male model, reading teleprompter scripts of other people's words into a camera.
So why is his opinion interesting?posted by: boo on 08.23.04 at 01:21 PM [permalink]
No offense, but "Kentish Knock" was a lot less exciting than I had hoped.
But, back to grammatical nits. [self-deleted]
Now, onto the important stuff. Is it really the job of our vaunted Capitans of Industry to run up to the edge of the law or do whatever else is necessary to show a short-term profit? If, for instance, it were legal to kidnap and de-kidney Brasilian garbage men as long as it was done in Brasil, would you support GE doing that as long as they could bring in the long green?
So, there are limits. And, sometimes there are things that only show a profit in the long term. For instance, a corporation might donate money to local schools not just for the PR benefit but because they might want educated workers in the future. That costs money, and that money could go to the bottom line. What should the company do?
What about those companies that hire illegal aliens. It's almost legal to hire illegals according the Bush administration: in the entire U.S., just one company was fined for immigration violations from Jan. to May of this year. Should the company do it because they can get away with it?posted by: The Lonewacko Blog on 08.23.04 at 01:21 PM [permalink]
"Slightly more intelligible, but I think the Pulitzer committee will be underwhelmed."
Probably. But business-oriented books in general tend to be pretty wretched.
It could be worse, he could have written "Who Offshored My Cheese", or "Human Resources: What Would King Leopold II Do?".posted by: Jon H on 08.23.04 at 01:21 PM [permalink]
If you are going to be smug and condescending, at least use Spell Check.
Correct me if I am wrong, but at least part of what Dobbs was trying to say had to do with the idea of outsourcing being driven by the desire of corporate leaders to quickly reduce costs, improving the bottom line in the near term, boosting stock prices in the near term, and thereby justifying higher compensation for corporate leaders in the near term, the only term they care about. By the time the near term becomes the long term, the corporate leaders doing the outsourcing will have deployed their golden parachutes and bailed out.posted by: Zathras on 08.23.04 at 01:21 PM [permalink]
"driven by the desire of corporate leaders to quickly reduce costs, improving the bottom line in the near term, boosting stock prices in the near term, and thereby justifying higher compensation for corporate leaders in the near term, the only term they care about."
So? If thats the kind of person the board of directors hires on, the company will suffer when that far term arrives and some better company will surpass them. The Board may lose their jobs, assuming their stocks dont completely tank. Capitalism. The worst system except for all the rest.posted by: Mark Buehner on 08.23.04 at 01:21 PM [permalink]
“Correct me if I am wrong, but at least part of what Dobbs was trying to say had to do with the idea of outsourcing being driven by the desire of corporate leaders to quickly reduce costs...”
Why focus solely on the alleged greed of the corporate leaders? Are American consumers mere victims of these large companies? Why ignore the greed of the lady who desires a lower on her insurance premiums. What about the guy who wants a better price on the car he’s might purchase? Lastly, it is always foolish to discuss outsourcing to foreign countries while ignoring the same activity between states, cities, and people living on the same street. Everybody outsources. My family does not grow its own vegetables and our automobiles were not put together in our backyard! Outsourcing is not some sort of mysterious activity. It is merely the ho-hum standard behavior of all human beings.posted by: David Thomson on 08.23.04 at 01:21 PM [permalink]
"What about the guy who wants a better price on the car he’s might purchase?"
"What about the guy who wants a better price on the car he might purchase?"posted by: David Thomson on 08.23.04 at 01:21 PM [permalink]
You raise an excellent point that, alas, is nowhere found in Lou's paragraph (in either the mangled or non-mangled version). This may be in the book -- I do not know, not having gw's moxie to go find the book at the bookstore.
The quoted, non-mangled sentence, strikes me as pseudo-patriotic garbage. A company that puts the "national interest" first isn't actually doing that; it is putting first some vision of the national interest as determined by the company's leaders. This does not strike me as being terribly efficacious. At best, folks hoping to advance the "national interest" tend to equate self-interest with national interest and, at worst, attempt, like George Soros inflict some half-baked pseudo philosophy on the rest of us.posted by: Appalled Moderate on 08.23.04 at 01:21 PM [permalink]
If thats the kind of person the board of directors hires on, the company will suffer when that far term arrives and some better company will surpass them.
You might want to be a bit more precise. Not "the company" will suffer, but the company's shareholders, at least those without insider knowledge to bail out early; the company's employees, except those with the golden parachute clauses in their contracts, i.e. those who got the company into trouble in the first place.
And the board of directors of many companies consists largely of executives from other companies. Thus executives get to pick - and define the compensation packages of - other executives and mostly from a pool of executives who have already been or currently are executives - a little incestuous, don't you think?
Capitalism. The worst system except for all the rest.
Your knee-jerk defense of capitalism is misplaced. I really doubt that Zathras, of all people, was suggesting that we adopt communism instead.
The truth is that the current executive compensation system is deeply flawed and rewards greed, nepotism, short-term thinking and even disastrous mistakes instead of consistent outstanding results over the long term.
To illustrate my point, take two hypothetical companies whose stock prices are both at $50 at one point in time. Now let's say company A is doing well and its executives are producing consistently good results. The company is growing a bit and hiring a few more people now and then. The stock price will rise slowly, but steadily, say to $55-60 over several years. Company A's executives get a few ten thousand stock options each priced at $50, $52, $55. They make some money on those options, but not very much.
Company B's executives, on the other hand, make some disastrous decisions as a result of which the stock price tanks - it falls to $5. Once it stabilizes around $5, the executives grant themselves and the board of directors a few hundred thousand stock options each priced at $5. Over the next few years they manage to improve things a bit by instituting a tough "cost savings" policy, i.e. layoffs and outsourcing. The stock price goes back up to $20. The executives cash in their stock options and bail out. Some of the directors do the same, their term is up and other boards "need" them. The new executives discover accounting problems or the like. The company's stock price tanks and falls to $1. The new executives grant themselves and the new board hundreds of thousands of stock options stock options priced at $1. More "cost savings" ensue. The stock price goes back up to $5. The new executives make some good profits. And the cycle continues...
Result: Company A's executives produced good results for their shareholders and for their employees, but only very modest earnings for themselves. Company B's executives, on the other hand, produced horrible results for their shareholders and for their employees, but excellent profits for themselves and the board of directors.
This scenario is far from hypothetical. This kind of thing has been happening over and over again at many companies. The current compensation scheme actually gives executives an incentive to drive their companies to the brink of bankruptcy over the long term.
So would YOU, of all people, expect executives to play nice instead and leave money on the table? Hey, it's capitalism - if they don't do it, probably someone else will. Can we even blame them for taking advantage of this system?
But don't we have to fix the system?
If America allows this flawed system to continue and worsen, at some point America's leading economic role in the World may well be taken over by India or, more likely, China. Maybe in 100 years Indian companies will outsource work to America where a hundred million unemployed will be offering their labor for rock-bottom rates. ;-)
One problem is that the tax code (specifically 162(m)) exempts performance based compensation from the extra tax on compensation in excess of $1,000,000. Get rid of that loophole, and you remove much of the motivation to manipulate short-term stock prices.posted by: Appalled Moderate on 08.23.04 at 01:21 PM [permalink]
Get rid of that loophole, and you remove much of the motivation to manipulate short-term stock prices.
Those are exactly the kinds of changes that we need. I'm hoping that when Kerry talks of getting rid of incentives for companies to outsource those are the things he ultimately means - although the connection is, of course, only indirect.
David Thomson deliberately confuses the issues again: Outsourcing is not some sort of mysterious activity. It is merely the ho-hum standard behavior of all human beings.
There is a difference between:
1. outsourcing in order to get something done that one wouldn't be able to do oneself or that would prevent one from doing other things instead (which one is presumably more adapt at)
2. laying off workers because one is under the impression that foreign workers can do the same work more cheaply
I don't think anybody has any problems with outsourcing of the first kind. It's quite disingenuous to put up a strawman example of the first kind to attack someone who has a problem with the second kind. That this kind of nonsensical argument keeps being made by the outsourcing proponents doesn't exactly make me feel that they have good arguments in their favor.
Incidentally, has anybody ever discussed what would happen if the "prevailing wage" requirement and the cap on the number of H-1B workers were both lifted?
Would companies prefer to hire hundreds of thousands, possibly millions of cheap H-1B workers every year rather than send work overseas? Would this be the end of high-tech outsourcing/offshoring? It would obviously put some downward pressure on salaries, but the competition would be fairer because the foreign workers would still have to be able to make a living in the US.
Why aren't free market outsourcing proponents pushing for this solution? Wouldn't this be a much fairer and even less restrained solution?
"You might want to be a bit more precise. Not "the company" will suffer, but the company's shareholders, at least those without insider knowledge to bail out early; the company's employees, except those with the golden parachute clauses in their contracts, i.e. those who got the company into trouble in the first place"
You make the classic mistake of looking at the company as some sort of untouchable monolith that will keep rolling along no matter how many employees get squashed or how many leaders raid the coffers. The _company_ will suffer. How's Enron doing these days?
"Thus executives get to pick - and define the compensation packages of - other executives and mostly from a pool of executives who have already been or currently are executives - a little incestuous, don't you think?"
Not really. By definition shareholders are invested in the corporation. If they screw up they cost themselves a ton of money. What's more compelling than that?
"Your knee-jerk defense of capitalism is misplaced. I really doubt that Zathras, of all people, was suggesting that we adopt communism instead."
You're putting words in my mouth. There is plenty of room between capitalism and communism, and the sort of neo-socalist government that would be required to ensure 'ceo's arent getting their golden parachute' is a rather insidious one, and its the big reason Europe is sputtering to death. I often wonder whether critics are more concerned with CEOs making too much or companys struggling. "Tax the rich, feed the poor, till their are not _rich_ no more?!" Priorities.
"So would YOU, of all people, expect executives to play nice instead and leave money on the table?"
No, but I expect the more forsighted to take the long view and do whats right for their companies, which will then thrive while the corrupt wilt. Would it have made you feel better to put an arbitrary cap on Bill Gates salary even if it pushed him into early retirement in 1990? How different would the world be? Again, is this really about the health of the business world (which, if im not mistaken the US is ahead by about 30 lengths), or about making sure the greedy rich dont get any richer by gum?!
posted by: Mark Buehner on 08.23.04 at 01:21 PM [permalink]
National Pabulum Regurgitation?
By definition shareholders are invested in the corporation. If they screw up they cost themselves a ton of money.
You don't seem to have understood (or read?) my stock option example, which is the perfect counter-example to this. Screw-ups don't necessarily cost the executives, they can actually benefit enormously from them, because they get new stock options issued at lower strike prices.
And getting stock options means one is "invested" in a company without actually having invested any of one's own money into the company. There is only an upside, but no downside.
You're putting words in my mouth. There is plenty of room between capitalism and communism, and the sort of neo-socalist government
I had actually written soc-i-alism initially, but that didn't go through Dan's spam filter, as you also discovered. Admittedly, changing it to "communism" was lazy on my part.
Still, I don't think Zathras is a soc-i-alist, "neo" or not "neo", either.
"Tax the rich, feed the poor, till their are not _rich_ no more?!"
Talk about putting words in other people's mouths...
No, the point is neither to abolish capitalism nor to envy the rich nor to strip the rich of their wealth. By most standards I'm pretty rich myself, and I'm not planning to give everything away to the poor, no.
No, the point is that the system is rigged and allows the already-rich executives to become even richer not because they are delivering value to anybody, but because they can make their own rules and basically assign themselves more and more money without doing anything for it.
No, but I expect the more forsighted to take the long view and do whats right for their companies, which will then thrive while the corrupt wilt.
In an ideal world that's probably what they'd do. Alas, how many examples and how many counter-examples are there? I think there'll always be quite a few who don't mind the "wilting" after first making a few hundred million...
And, mind you, I'm not talking about outright corruption so much as I am talking about rewarding incompetence. A good capitalist like you should really be the first to agree with me. But no, for some reason you feel you have to protect incompetent CEOs and justify their making a killing. It's a little like protecting incompetent programmers from having their jobs sent offshore. That's something we both wouldn't protect, because we realize that it would create a market inefficiency that would cost everybody in the long term. But CEOs are somehow different and their siphoning off of millions of dollars without delivering any value must not be criticized? Why?
For the same reason the independent grocer down the street can pay his incompetant nephew three times his worth, the system ultimately adjusts. Now if there are crimes being committed, they should be enforced, and Im entirely with you that they arent (although we have seen some high profile folks doin the perp walk lately). If you think there is a sensible means of passing laws to protect the shareholders from graft or collusion or whatever, im all for it. But the rhetoric that i'm hearing is that super-rich CEOs is a bad thing intrinsically. That i dont buy. There should never be a ceiling to success in this country.
"Tell my uncle that builds Japenese in Kentucky"
Japenese cars actually. The Japanese themselves are constructed in a secret factory on Okinawa.posted by: Mark Buehner on 08.23.04 at 01:21 PM [permalink]
I think Dobbs is referring to the little-known corporate entity known as the "they head."posted by: german on 08.23.04 at 01:21 PM [permalink]
But the rhetoric that i'm hearing is that super-rich CEOs is a bad thing intrinsically.
No, it's not. I haven't said that anywhere. I am all for super-rich super-successful CEOs.
But I am against super-rich incompetent CEOs. That's called an aristocracy, and that's what America and Americans tried to get away from, and for good reason. Unfortunately, the last few years have seen some evolution back towards an aristocracy.
Again note I'm not just talking about criminal behavior. I'm talking about plain and simple incompetence that gets rewarded. I've seen it happen. An executive spends $20 million on a "new idea". It doesn't fly. Almost everybody gets laid off - except for the executive who gets promoted as a "visionary". I've seen company's share prices take spectacular dives (from more than $20 to less than $1) and CEOs standing by, doing essentially nothing to stop it. Once the price reached a bottom, the CEO would issue some stock options to himself and his executive team, priced at 75 cents or whatever low price he can get, and then announce drastic layoffs to save costs. So the stock price bounces back and the CEO proclaims success. But the success is short-lived, other "new ideas" turn into failures, and the cycle is repeated. The employees are doing badly, long-term shareholders are doing badly, and yet the CEO and his team are getting rewarded by huge stock option windfalls during the temporary stock price bounces.
At the same time CEOs that hold a steady course and lead successful companies don't get similar rewards.
The system is totally screwed up, and it's been getting really bad during the dot com boom and its aftermath. Ignore it at your peril - I think all this will have significant ramifications pretty soon.
I don't really think that if I said I was a communist anyone would believe me.
Let's just note right now that until such time as anyone trots down to Borders to get Lou Dobbs book and actually reads it, this discussion is a little off point. I don't actually know if Dobbs made or even agrees with the point I made earlier in this thread, about outsourcing being influenced by corporate executives zeal to increase their own compensation in the short run. I just used the quote Dan posted shamelessly as a hook for my own views.
Having made that disclaimer: look, markets do correct themselves, and companies that make unwise decisions pay for them sooner or later. This process, however, frequently takes place over too long a time for the political consequences of its various stages to be ignored. I feel bound as a free-market conservative to defend free markets in principle. I feel bound as a free-market conservative who wants free markets to prevail not to find myself defending the self-interested actions of corporate leaders as in any way integral to capitalism. There are I am sure any number of corporate heads who think awarding themselves the extra million dollars of compensation just because they can is what free markets are all about. It isn't.posted by: Zathras on 08.23.04 at 01:21 PM [permalink]
“David Thomson deliberately confuses the issues again: Outsourcing is not some sort of mysterious activity. It is merely the ho-hum standard behavior of all human beings.
There is a difference between:
1. outsourcing in order to get something done that one wouldn't be able to do oneself or that would prevent one from doing other things instead (which one is presumably more adapt at)
2. laying off workers because one is under the impression that foreign workers can do the same work more cheaply”
The point of all outsourcing is to increase economic efficiency and bring down costs. We consumers literally do run the show. I must slightly revise the number second point:
“2. laying off workers because one is under the impression that workers living outside the state can do the same work more cheaply”
“2. laying off workers because one is under the impression that workers living outside the city can do the same work more cheaply”
“2. laying off workers because one is under the impression that workers living outside one’s immediate community can do the same work more cheaply”posted by: David Thomson on 08.23.04 at 01:21 PM [permalink]
"I must slightly revise the number second point:"
I must slightly revise the second point:posted by: David Thomson on 08.23.04 at 01:21 PM [permalink]
"But I am against super-rich incompetent CEOs."
posted by: Mark Buehner on 08.23.04 at 01:21 PM [permalink]
So what's the solution that isnt worse than the problem?
A large part of the solution will be to treat stock options differently. It has already been discussed - and so far shot down by the executives on entirely bogus grounds - to count stock options as expenditures for the companies. But that would only be part of the solution - and not even a necessary part, if other measures were taken instead.
For example, one could institute a rule that executives will never be granted any stock options at prices lower than the share price at the time they joined the company. That would immediately remove the perverse incentive for executives to take entirely unnecessary risks (which are a win-win situation for them: if they happen to be successful, the price goes up; if they fail, the price goes down and they get cheap stock options). It would also make it more likely that executives will leave companies voluntarily if they screw up, which would be a very healthy thing for most of those companies (whereas right now executives who screw up have a very strong incentive to cling on to their jobs because they are almost guaranteed to make money from a bounce-back after the screw-up).
This proposal wouldn't set a cap on any successful executive's compensation. It would not in any way hurt companies' bottom lines. And yet you can be certain that executives would lobby against it vehemently. It would remove what is currently a virtual guarantee to make a quick few million dollars regardless of their performance. They would actually have to start caring about the company's mid- and long-term performance in order to get rich off it. (Wow, would that be tough on many of them!)
meanwhile 90+% of corporations either prosper or struggle for entirely different reasons
You are far too optimistic about this. The "few bad apples" that actually are discussed in the press, i.e. the high-profile corruption cases like Enron, Worldcom and Tyco, are indeed the exception. But examples of incompentence and irresponsible behavior by executives are much more common than you think. I might go as far as saying that every large company almost certainly has some incompetent executives (note "executive" isn't just the CEO). And in today's tough environment even a screw-up in just one business unit can generate bad enough press for a company's stock price to tank.
That that's good for the executives is a perverse incentive that has to be removed.
The deeper and more important problem isn't exec compensation but the equity markets' pressure on large, prominent public companies to achieve quarterly results. This pressure often leads to perverse decisions even when execs' stock options are not at stake.
From what I've seen, the best management is usually found at mid-sized ($200M-$1B in sales) old economy companies that are closely held or else directed by a single powerful, visionary exec.
Buffett specializes in finding such mid-sized gems, and leaves them alone. He stumbles when he buys larger companies that are subject to conflicting pressure from institutional shareholders, internal management strife, and public criticism and second-guessing.
Based on the above, the best thing for both our economy and our sense of justice would be to move toward a European, or Buffetian if you like, system of ownership and governance in which external investors own second-class shares and have little ability to influence management. This is what Berkshire Hathaway's achieved, and the results speak for themselves.
^%#^$@!!! wish I'd bought Berkshire at $24,000posted by: lex on 08.23.04 at 01:21 PM [permalink]
Not sure I agree with Lex's ideas about corporate governance, but it is fair to say that pressure from equity markets for positive results every quarter drives executive behavior rather than the other way around.posted by: Zathras on 08.23.04 at 01:21 PM [permalink]
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