The real loss of shareholder power came about in the 90s with the rise of the 401(k). These 401(k) were the real savings of Americans toward their retirement.
The system works because is represents a tax savings to the employees and with the IRS looking over the shoulder, they try to make a good arrangement with employees making contributions so that the executives of the corporation are able to make large contributions (it's a percentage that must be kept in balance). So if you are contributing to a 401(k) then you own bits and pieces of stocks and bonds as you decide to make a mixture of accounts. But you do not know what you own, how many shares you own, or anything really about your investment. It's aggregated and managed by a someone you don't know. And they are making investment decisions about companies that you don't know and might not even like let alone have the ability to make judgments about management. In older days, you would purchase stock and once a year there would be a stockholders meeting which you could attend or offer your proxy to management to vote for you. These days the manager of the portfolio votes, makes all the decisions, and it's only in his interest and for his account. In the old days, commercial banks didn't keep their portfolios in house -- their money was somewhere else so that they couldn't make decisions that would help themselves but hurt their shareholders. Now they make investments for themselves no matter who it hurts. The owners are titular owners. Not REAL owners. The majority stockholders are 401(k) accounts which is why the CEO has all the power, why they vote themselves a board that will agree with them, why they don't care about the owners any longer -- they see them as necessary adversaries -- sort of the same way they look at labor. On Nov 20, 4:01 pm, xi <[email protected]> wrote: > Thank you very much Sumerian. Your message and your example, cats and > rats, clearifies a lot. > > This fight is much more clear in USA than in Europe and, of course, > than in Japan where that fight does not exist nowadays. > > Let me start with a question: Who is in charge in a bank, i.e. in Citi > group? its owner or its CEO? the families that control 30% (or above) > of its capital with political rights? or the high executives? Who > makes the big decissions? > > Some people might say: Owners do, they can fire executives if they > want. Other people might answer: legally owners do, but in fact, > executive do everything and decide everything as long as owners > receive their profits. A third group of people might answer: who > cares? they always agree. > > My answer is that it is not clear nowadays who own banks, carmakers, > or any other corporation unless those that are based on founders and > their families. But it is more clear in banks. > > And more important. They disagree because they have different > interests, different goals, and different strategies. They fight for > the power to make those goals come true. > > We should not use the word "they". Which of those two groups are > "they"? > > As usual, this is not a fight for wealth, it is a fight for power. For > the absolute power to make their goals to come true. And their goal is > power. > > It reminds the fight in England 300 years ago between conservative > landowners (rural aristocracy) and emerging capitalists (urban factory > owners). Now it is a fight between capitalists (bigger shareholders) > and emerging executives. 300 years ago in England some landowners > became capitalists, now some capitalists become executives and some > executives become capitalists, those corporations where owner and > executive is the same person look more stable (Microsoft and Gates > till one year ago, Berkshire and Buffet, etc.). > > It is not a global fight. In some countries power is clear (China, > Russia). In other countries that fight is not in place (Japan, > Saudia). In other economic areas (Eurozone) that fight is just > starting. That fight is clear only in USA. > > As landowners in England 300 years, nowadays capitalists control > formal institutions (Bank of England, Fed, etc.), the institutions > that formally control their economy. Executives control Wall Street. > > Which side will support Main Street? any? Maybe this time Main Street > can make a difference, maybe Main Street can create their own economy > this time. > > This is part of the transiton phase between one civilization and the > next one. Time of turbulence. > > China is just a spectator of that fight. > > Peace and best wishes. > > Xi > > Somehow this is a reply to your message, Sumerian, in > > Cats to eat rats, then rats to eat some > catshttp://groups.google.com/group/world-thread/browse_thread/thread/46e2... > > And it continues a message I wrote long ago where I said that The > corporation, as we knew it, is dead. > > Reform? Revolution? Or something deeper? (For Sumerian and anybody > interested)http://groups.google.com/group/world-thread/browse_thread/thread/ee58... --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "World-thread" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [email protected] For more options, visit this group at http://groups.google.com/group/world-thread?hl=en -~----------~----~----~----~------~----~------~--~---
