Tuesday, February 9, 2016

Clionton and the Wall Street paradigm

From this article, which ties Clinton to this very method of operation via her money from them. And which paradigm she will perpetuate.

"They call it 'unlocking value,' but it is cold, hard financial strip-mining that adds no value at all to the target firm while squeezing the livelihoods of the average employee. These Wall Street predators pressure corporation after corporation to use their revenues to buy back their own shares, thereby raising the share price, enriching CEOs and the largest Wall Street investors.

"Before 1982 this was considered stock manipulation and deemed both illegal and dangerous to the financial system. However, a SEC rule change under the Reagan Administration, basically legalized unlimited stock buy-backs. In 1980 2% of corporate profits went to stock buybacks. By 2007 over 70% of all corporate profits when to buy back their own shares. (For an excellent study of this financial strip mining see Profits Without Prosperity by William Lazonick. )

"So instead of reinvesting in the companies, Wall Street financially stripped them. To fund the debt and stock buybacks, corporations were broken up, jobs shifted overseas, wages cut and benefits weakened, if not eliminated. Millions of workers have watched their incomes decline as money flows to Wall Street and their jobs shift abroad."

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