What is the DOE getting at?
They are the group that used the letter Q
To define the highest level of top secret security clearance.
John G. Trump… Tesla's papers…
HVEC High Voltage Energy Corporation
Gigantic Van de Graff accelerators firing high powered energy beams
Like some kind of Tesla inspired DEW
What do they really know?
Electric and magnetic fields
Then came the first manager revolution, and that’s more the 30s and 40s and 50s, and GM is the quintessential example of that, and it was in contrast to Ford Motor Company. Ford Motor Company of course run by an entrepreneur, GM run by professional managers who had MBAs and such, which didn’t use to be a particular really good way of becoming the head of a company and such.
Then they had the current revolution, which is more the 70s is when it starts taking off and it’s huge by the 80s. And I’ll give just a super brief version. The other thing that’s happening at the same time is all kinds of entities that used to be key restraints, the investment banks, the accounting firms, the credit rating agencies and such, used to be owned in true partnership form, and that meant that all the general partners were subject to what’s called joint and several liability. What that means is, you, the general partner, one of the general partners, need not have done anything wrong. If any of your general partners do anything wrong that causes losses, you personally are on the hook for all of the losses of the partnership. They can come and take your home, your art collection, all those kinds of things.
You can imagine that that made people a whole lot more reluctant to make other people partners because they were on the hook for what they did and made them monitor it as well. So when they move away from partnership to corporation, whoa, this is the era of the massive stock benefits and such. This is the revolution in corporate pay. And the analytics, the way it was sold was, oh, the problem is managers aren’t taking enough risks. Their fuddy duddies. The only way to get fired is to take a big risk and lose, so they, you know, don’t do much and that’s why the United States isn’t as productive as it used to be because they pursue their own interests instead of the interest of the corporation.
So we will align the interests of the CEO with the shareholders by giving them huge stock positions, and that will mean there’ll great managers and they’ll take much more risks, and of course we did this and we made the CEOs massively wealthy. We made it, you know, child’s play for them to engage in accounting fraud, to report huge short term gains, and they based their pay, not as economists said that you should on longterm performance, but on short term pay, which is of course far easier to manipulate.
So that is the, you know, the revolution that has brought us the disaster. And by the way, instead of producing record gains in productivity, productivity gains have roughly been cut in half under this managerial revolution.
Greg Wilpert: Well, the point that you make about connecting CEO compensation to the stock performance is something very important and something many people have analyzed, and of course, obviously, that’s become the main trend. And what I’m wondering though is that if that’s the case, that of course would also tie the compensation and the work of the CEOs very closely, not just to the stock price, but the stock price is also to some extent dependent on perceptions.
So, in other words, I’m wondering if maybe the trend, you know, the MeToo movement and sexual harassment, the general perception of a company’s performance and its ethics, is ending up having an impact on the CEO’s ability to act, essentially, and if that’s one of the things, in other words, perception becoming more important than perhaps actual productivity and performance.
Bill Black: I don’t think that aspect of it, but perhaps something a little bit analogous that makes your point or draws on your point about perceptions.
So all of this has meant that investors are super, super short term oriented, and that means corporations do all kinds of things that are stupid for the economy, stupid for productivity in the longer run, but which will boost share prices this quarter. So in addition to all the usual, you know, frauds that I talk about using accounting, they simply now, and if anyone wants to read, read professor [inaudible 00:08:24] on this, they do unbelievably huge stock buybacks. So instead of building productive things with their retained earnings, they buy back stock using the corporation’s money, which has the effect of raising stock prices.
So I think what’s really changing right about now is that all of these folks have, you know, had the greatest opportunity to big pigs at the trough in modern history, and that was the Trump tax cut. So again, what really wealthy people put their money in is not so much yachts, because you can only buy so many yachts, is the stock market. All right? And so when you give enormous trillion dollar cuts in taxes of the wealthy people, what are they going to do with all that additional income? Well, you know, after tax income, they’re going to buy more stock, and you’re going to get this huge run up in stocks.
That can only work for so long and we’re overdue for recessions, and we don’t know exactly what’s going to cause it, but, you know, most people think recessions are coming relatively soon. Obviously the coronavirus is pushing a number of countries over that margin into near-term recessions. So I think that first, all these people got incredibly filthy rich. They don’t need money, and they certainly don’t need their current job.
Greg Wilpert: That’s an interesting point, but that brings me to my next and last question, which is that, you know, you have this basic trend of something that we’ve of course talked about everywhere, and progressives in general and Bernie Sanders certainly has pointed it out, is extreme growth in income inequality and in the fact that CEOs are doing so well. Of course, they have the luxury of being able to resign from a job that they’re feeling is getting too stressful.
I’m wondering though about what that also says about, you know, the other tier and the relationship between the two, that is, the workers don’t have that luxury. If anything, especially if they are contingent workers or if they’re part time workers or if they’re working on a contract or something like that, there’s a huge division clearly, and I’m wondering if these resignations could be a sign of that, the continuation, basically, of these two worlds, of between management and basically the lower two thirds of society. What do you think?
Bill Black: Oh, absolutely. What you have to do, and Jack Welsh has just died at GE, and his nickname that he was proud of was Neutron Jack after the neutron bomb that kills people, but leaves the building standing. So he was infamous for firing people. He was infamous for ranking yank, which is, we will say that we’re firing you because you were a poor performer. So not only will you lose your job, you’ll be stigmatized for life. But who was really being fired? The people who weren’t to play the accounting scams, right? So the best people were being fired and being labeled as the worst people, and the stock price was surging under all of this.
I would like to say, you know, that CEOs are resigning because they don’t want to do that. I frankly don’t think many CEOs resigned because they’re unwilling to do this.
I’m going to describe documents which you can get online. These are the plutonomy memos by Citi to their wealthiest clients, and they call this a managerial aristocracy. That’s their phrase. They say it creates a plutonomy. In other words, an economy in which virtually all the wealth is held by a tiny group of folks and where the workers get a smaller and smaller pie, and they say, since the elections are coming, the key thing, problem, the key risk we have is workers still get to vote and they may eventually go to the polls and stop this.
So they described that as a risk to the continuation of this managerial aristocracy and this ability to take virtually all of the, again, reduced gains because they’re doing stupid things in the way they run the companies that greatly reduced productivity. So it’s a smaller pie. Remember, the justification was a trickle down? Well, you get a big pie, and even if you don’t get much of it, as long as the pie is growing, great. Well now, the growth of the pie has been dramatically reduced by these scams. And as I said, Citi openly says this is going to get even more extreme unless and until the voters rebel.
Greg Wilpert: Wow. Well this is a good point to end, especially considering that in the middle of this week’s, you know, Super Tuesday and the primary season, but we’re going to leave it there for now. I was speaking to Bill Black, associate professor of economics and law at the University of Missouri, Kansas City. Thanks again, Bill, for having joined us today.
Bill Black: Thank you.
Greg Wilpert: And thank you for joining the Real News Network.
Because it was built by criminals who pocketed the money and skimped on materials
The cheapest rebar
Not enough rebar in the concrete mix
Columns that were hollow in the center
Concrete using cheapest grade mix, too juicy so it never sets properly because it was made at the cheapest supplier who was so far out of town that nobody else would buy from them.
We saw this in Shenzen when it first boomed something like 30 years ago
Once the crooks learned how far they could go, the disease spread
I'll bet that Xi's people knew that the Cabal had ruined this hotel and that was why they housed their prisoners there.
And now some are dead and nobody is weeping.
Many of the Cabal bigwigs sent their families to hide out one back-to-back cruises
Which is why cruise ships are running into COVID problems.
I had a personal run-in with one such Chinese family who were denied landing in one country due to COVID but they managed to get off the cruise in Thailand.
They flew straight to Vancouver, Canada where they applied for asylum
And were searching for a house to buy while they stayed in the hotel where my close people work.
Now I understand why Trudeau behaves the way he does.
To make the Cabal believe that Canada is a safe place for Rats to run to.
But in reality, Canada is a giant TRAP
Remember all the Canadians who died in the Iran plane crash
Who turned out to be Iranians with Canadian citizenship?
Somebody in Canada handed them over to the patriots in Iran
Who are cleaning up
First, put them all on a plane, and BOOM
Next, make the Ayatollahs die from COVID
This is a beautiful movie
And the truth will never appear in public
Only in FICTIONAL form
I don't get the reason for that lower flag with the white horse on a shield
That is the flag of Nordrhein-Westfalen, one of the states of Germany
It's the area from Bonn through Cologne to Dusseldorf.
And I haven't heard of any COVID problem there.
What would happen if patriots who are over 40
Would put on Democrat gear
Something related to the election campaign
Or supporting one of their causes like PP
Find the clothes at a second hand shop
Then go to public places
And talk about pizza parties
And let it slip, repeatedly
About how you really liked that pizza
The young redhead with the green eyes
She was delicious
Couldn't have been older than 12
Boy was that pizza juicy
Etc…
Etc…
Keep something Q under cover
In case a patriot gets really riled
The idea is to just get Democrat loyalists thinking about who they really support
Without talking to them at all
They just OVERHEARD a conversation
And couldn't stop thinking about it!