Corporations: Who are they?

[Roxanne Appleby]

Take a careful look at what they were prosecuted for - mostly for offences against Enron, not shareholders/stockholders . . .

Isn't that a contradiction? What is Enron in this sense but the shareholders? If you steal something from my house you've stolen from me . . .

 

[Roxanne Appleby]

roxanne said

the individuals at Enron ... were liable . . .

OK, in a couple years please post here what payouts to those persons swindled have been made by Skilling and the estate of Lay.

Wait!... At least one newspaper says the estate of Lay will have no liability! damn. inconvenient facts.

You've changed the subject. If your beef is that the various forms of anti-fraud laws lack teeth or that the tort system has inadequacies with regard to making fraud victims whole, then start a thead about that.

 

[Huckleman2000]

You've changed the subject. If your beef is that the various forms of anti-fraud laws lack teeth or that the tort system has inadequacies with regard to making fraud victims whole, then start a thead about that.

That's not true at all. Pure's (and others', including me) contention is that a principal reason that proprietors choose to incorporate is to limit personal liability and spread risk. Ken Lay and his cronies misrepresented that risk to investors and potential investors. There's no way in conceivable reality that he'd say the things he did if he weren't protected to the extent he was from personal liability. Perhaps civil suits can establish that some of his wealth was gained through illegal means, and force forfeiture of that. Even at today's outrageous CEO compensation packages, that amounts to a tiny fraction of the damage he caused, entirely due to the corporate structure of risk diversification.

 

[JamesSD]

When you here the word Corporation what flashes through you mind as to who or what they are? Let get right down too it.

Corporation!

Put a face on the word...

What do you see?
Who do you see?
What do they do for us, to us?

I will reserve my thoughts on this for a few post or so!

The excellent documentary "The Corporation" answers these questions. Essentially, corporations are not fundamentally good or evil, but by their very definition are amoral and only exist to make profits for their shareholders. This is why tight regulation is essential.

 

[Roxanne Appleby]

That's not true at all. Pure's (and others', including me) contention is that a principal reason that proprietors choose to incorporate is to limit personal liability and spread risk. Ken Lay and his cronies misrepresented that risk to investors and potential investors. There's no way in conceivable reality that he'd say the things he did if he weren't protected to the extent he was from personal liability. Perhaps civil suits can establish that some of his wealth was gained through illegal means, and force forfeiture of that. Even at today's outrageous CEO compensation packages, that amounts to a tiny fraction of the damage he caused, entirely due to the corporate structure of risk diversification.

There is a contradiction in this:

"Ken Lay and his cronies misrepresented that risk to investors and potential investors. There's no way in conceivable reality that he'd say the things he did if he weren't protected to the extent he was from personal liability."

Such misrepresentation is fraud. He is not protected from personal liability for this. He could go to jail for this and be sued. Maybe his estate can still be sued.

 

[Huckleman2000]

There is a contradiction in this:

"Ken Lay and his cronies misrepresented that risk to investors and potential investors. There's no way in conceivable reality that he'd say the things he did if he weren't protected to the extent he was from personal liability."

Such misrepresentation is fraud. He is not protected from personal liability for this. He could go to jail for this and be sued. Maybe his estate can still be sued.

Okay, but we're talking an extreme example, and large portions of his estate can be protected. He could certainly have gone to jail, and would have in all likelihood. Apart from a very few high-profile examples, CEOs and senior execs bear very little personal risk for rotten performance. Lesser examples happen all the time. Sole proprietors actually lose personal worth for bad business decisions. Corporate executives are largely protected. Did (do) you support Sarbanes-Oxley?

 

[neonlyte]

Isn't that a contradiction? What is Enron in this sense but the shareholders? If you steal something from my house you've stolen from me . . .

Yes Roxanne, it is a contradiction. Shareholders invest in a company for the good times and the bad times, they forget there are going to be bad times. Shareholders 'elect' the officers of a company to do the best they can for the company - I don't think it is an exaggeration to say that most of these elections are 'fixed' by large block holding investment companies.

When a officer of the company steals from the company, it is the company that must take action to prosecute. Shareholders can only take action if the company has fraudulently misrepresented its position at the time the shares were acquired, after purchase each shareholder has a voting share to elect the officers of the company. That this right is worthless to individual shareholders is where the contradiction begins.

Unfortunately shareholders tend to be greedy, if a company is reporting significantly profits higher than its competitors it either possess highly skilled and ruthless officers or it is doing something underhand. In Enrons case, it hid most of its profit generating business in off-shore companies, actually buying from itself to manipulate the market. The off-shore companies were hidden from the regulators and beyond regulator jurisdiction. If the shareholders want to recover funds, they should sue the regulators for allowing a company to operate in this manner. They will not and they cannot.

I have sympathy for the shareholder but all shares are sold with the caveat that markets can go up and down. Enron exploited weak regulatory controls, while everyone was 'making money' no one cared. Don't forget the shareholders were paid dividends from artifically inflated profits - I don't recall them complaining. Ban off-shore companies and this type of manipulation will be more difficult to achieve. It was not fraud, they exploited a legal loophole. It was appauling management. If shareholders don't like what management is doing, they have the votes to change managers - theoretically. Damn difficult when the vote is virtually worthless and you have no idea what your company is upto because they don't need to report on the activities of off-shore affiliates other than in a single line in a voluminous annual trading report.

 

[672]

This has been a very interesting read except perhaps '672s' post...I think someone needs help and should seek it as fast as possible.

No. I just think most all corporations are retarded? I have worked for them, and really do hate them.

How do I need help because I've been more of a victim of them, than some investor? You're pretty much of an asshole for talking down to every single middle and lower class American who gets abused by the corporate system.

Corporations dehumanize their employees. You must be part of this system.

And for that, I think you're a pretty low fellow. Insult me back? Sure, but it doesn't disprove your being low.

 

[672]

By the way, if you haven't noticed, I don't particularly care about all of you shareholding. I don't have any of the money to do it anyway. Yeah yeah, call me poor all you like.

I just hate your corporations.

 

[Liar]

The problem with corporations with shareholders is a very simple one: Conflict of interrest.

Shareholders these days consists to a very large part of insurance funds and pension funds. Their job is to maximise profit by actively trading shares. So they cling on every signal from the corporation A that the immediate profit might be declining, and as soon as there is a hiatus in climbing market value, they jump ship to a faster climber.

This often conflicts with the original business started, the founder's idea of what the company should do. Because most actual doing, as opposed to the shareholders' speculating and shifting money, requires long term perspective. A company that is designed for stable growth and durability, while the stock market is a mayfly business more short sighted than teen fashion, is a sad and all too common combination.

That is the conflict of interrest that over and over creates the rifts between the owners and workers, and in sich a conflict, it's always the worker that gets shafted, even though the company's original gameplan would have afforded less revenue for a tough month or three. For instance during costly investment phases.

 

[Selena_Kitt]

When you here the word Corporation what flashes through you mind as to who or what they are?

Psychotic.

 

[Zeb_Carter]

Okay, but we're talking an extreme example, and large portions of his estate can be protected. He could certainly have gone to jail, and would have in all likelihood. Apart from a very few high-profile examples, CEOs and senior execs bear very little personal risk for rotten performance. Lesser examples happen all the time. Sole proprietors actually lose personal worth for bad business decisions. Corporate executives are largely protected. Did (do) you support Sarbanes-Oxley?

Not so extreme...a ex-CEO of the company I work for is now in prison for cooking the books at the company. He was charged with fraud. I do believe his assets were frozen and are being used to pay the lawsuits filed against the company.

As far a S-O goes, it is the bane of the corporate world.

 

[Zeb_Carter]

No. I just think most all corporations are retarded? I have worked for them, and really do hate them.

How do I need help because I've been more of a victim of them, than some investor? You're pretty much of an asshole for talking down to every single middle and lower class American who gets abused by the corporate system.

Corporations dehumanize their employees. You must be part of this system.

And for that, I think you're a pretty low fellow. Insult me back? Sure, but it doesn't disprove your being low.

I am sorry you feel the way you do and believe you do need help with coping with life. For you see no matter where you work or who you work for, when it comes right down to it...you are the employee and if your services are no longer required they(the corporation or the mom&pop store down the street) let you go.

I would suggest you grow up a little, life, no one owes you anything in this world and with your attitude, I am sorry to say, you will not go very far.

And before you rant and rag on me again an informations point...I have been and will most likely be again let go, laid off, fired, requested to leave. I have had many a job in my life from dish washer to Director of IT. None were handed to me an a silver plater, I worked hard for each job. In some cases I quit, in others was let go. No worries, there are always plenty of jobs.

 

[Roxanne Appleby]

Okay, but we're talking an extreme example, and large portions of his estate can be protected. He could certainly have gone to jail, and would have in all likelihood. Apart from a very few high-profile examples, CEOs and senior execs bear very little personal risk for rotten performance. Lesser examples happen all the time. Sole proprietors actually lose personal worth for bad business decisions. Corporate executives are largely protected. Did (do) you support Sarbanes-Oxley?

Sarbox is doing tremendous damage to U.S. capital markets - an increasing number of firms are trying to "go private" to get out from its onerous requirments, or are listing their shares only on foreign exchanges. It is most damaging to the smaller and medium sized publically traded firms - the big boys can afford the compliance costs. Sarbox was created by Congress - need I say more? Its unintended consequences vastly outweigh the "good intentions" of its creators - the "invisible foot" of government action at work.

That said, there are many dysfunctional elements in the current CEO and top exec pay regime. These are probably caused by some skewed incentives arising from the current tax and accounting environment. A systematic, non-political investigation would reveal these and suggest cures. Sarbox is not what it would recommend. Whether the real cures could get through our dysfunctional legislative branch is another question.

 

[Roxanne Appleby]

The problem with corporations with shareholders is a very simple one: Conflict of interrest.

Shareholders these days consists to a very large part of insurance funds and pension funds. Their job is to maximise profit by actively trading shares. So they cling on every signal from the corporation A that the immediate profit might be declining, and as soon as there is a hiatus in climbing market value, they jump ship to a faster climber.

This often conflicts with the original business started, the founder's idea of what the company should do. Because most actual doing, as opposed to the shareholders' speculating and shifting money, requires long term perspective. A company that is designed for stable growth and durability, while the stock market is a mayfly business more short sighted than teen fashion, is a sad and all too common combination.

That is the conflict of interrest that over and over creates the rifts between the owners and workers, and in sich a conflict, it's always the worker that gets shafted, even though the company's original gameplan would have afforded less revenue for a tough month or three. For instance during costly investment phases.

A couple problems here, Liar. Insurance companies and pensions are indeed huge holders of shares, but they are are the definition of "long term investors," and for the most part act very prudently with eye on the future, because they have to - they need to have the resources when those pension and insurance claims roll in in the future.

Markets are moved my many, many factors. Perhaps the biggest one is the public policy environment - government can't "create" jobs or "help" the economy, but it sure can kill them and fuck it up. Which is not to deny the importance of the rule of law and effective enforcement against fraud, etc.

Markets can be moved a little bit in the short term by the actions of speculators - day traders, hedge funds, etc. But those are "weather" - it's "climate" that one should focus on, and "climate" is what those pension and insurance managers look at. Not sayin' there aren't perrennial challenges and problems, but this is not one of them.

 

[Roxanne Appleby]

Psychotic.

There is a show on the History Channel called "Modern Miracles," and some of them are about how things are made in huge quantities - candy, beer, liquor, and some durable goods too. I know you're havin' fun here, but check it out some time - it's pretty damned impressive.

 

[Huckleman2000]

There is a show on the History Channel called "Modern Miracles," and some of them are about how things are made in huge quantities - candy, beer, liquor, and some durable goods too. I know you're havin' fun here, but check it out some time - it's pretty damned impressive.

I History Channel.

 

[Liar]

A couple problems here, Liar. Insurance companies and pensions are indeed huge holders of shares, but they are are the definition of "long term investors," and for the most part act very prudently with eye on the future, because they have to - they need to have the resources when those pension and insurance claims roll in in the future.

Um, what do you mean there? Are you saying that day-trading and a long term perspective can work togetner? I'd be very interrested in an explanation how.

Pension fund managers playing the stock market is the very epitome of day-trading of shares and options today. Yes, they act very prudently with eye on the future. But not on the future of the company they buy shares in. The future they look out for is that of their capital bulk. Essentially, their comapny, not the company their company owns shares in. Their job is for that bulk to grow, and the best way for the bulk to grow is by actively playing with the inevitable daily ups and downs between different companies. Climate? Funny, I've never heard the fund investors talk about that. They always seem to focus on the specific stocks and the specific plans and result that those companies present.

Because very few shareholders today invest in companies. They invest in ownership. And as long as that ownership increases in value more than some other ownership, tthey will stick to it. If you don't present the best possible bottom line with every quarterly report, the investers will immediately scout for the top achivever and take their capital elsewhere. The result of this is that companies do the things that keeps the bottom line stable and rising, instead of the things that would have the best outsome, say, five years from now. Dowsizing instead of investing.

One of the most overused examples of this is IKEA. It has one owner, the founder of the original little mom and pop that grew. The investments, setbacks and three years of red numbers in the bottom line that it took for IKEA to eastblish themselves in Russia and eastern Europe in the 90's wouldn't have been possible if they had been owned and therefore controlled by shareholders. They would have withdrawn their capital as soon as it started looking sour, because their ownners demand immediate result too. Now that market brings in massive revenue. Which was the plan all along.

 

[R. Richard]

Pension fund managers playing the stock market is the very epitome of day-trading of shares and options today. Yes, they act very prudently with eye on the future. But not on the future of the company they buy shares in. The future they look out for is that of their capital bulk. Essentially, their comapny, not the company their company owns shares in. Their job is for that bulk to grow, and the best way for the bulk to grow is by actively playing with the inevitable daily ups and downs between different companies. Climate? Funny, I've never heard the fund investors talk about that. They always seem to focus on the specific stocks and the specific plans and result that those companies present.

Liar:
It is VERY impractical, almost impossible for a pension fund manager [Mutual fund manager, hedge fund manager] to day trade for the fund account. The problem is that the number of shares needed to be moved would overwhelm the market. This last is true even in giant corporations such as IBM.

I own shares in several small companies with good growth prospects. I can always tell when a fund is trying to establish a position, because a stock will run up and many times the normal daily average volume, with no news. I sell and wait for the inevitable correction back to some lower price and then I buy in. If the reverse happens, I try to add shares and then sell when the price recovers to the original level [or, usually a little higher.]

JMNTHO.

 

[672]

You are some idiot online telling -me-, someone who you do not know, that I will not go very far?

You're lower than trash, pretty much. Go take your pity elsewhere, hypocritical, condescending, stick in the ass.

 

[Zeb_Carter]

You are some idiot online telling -me-, someone who you do not know, that I will not go very far?

You're lower than trash, pretty much. Go take your pity elsewhere, hypocritical, condescending, stick in the ass.

Must have hit a sore spot. Typical behavior.

I may not know you per say, but I have meet and worked with plenty like you.

Resorting to name calling does nothing but show everyone else how childish you are. Keep going I'm getting a really good laugh out of it.

Now go wipe your nose and tell mommy to put you to bed!

 

[Lucifer_Carroll]

The only thing about a corporation that ever bug me are not actually symptoms of a corporation entirely, but rather humanity in general.

What bugs me the most is as was mentioned, the lack of responsibility. A corporation as an entity can be sued for the infractions that it has made, but a corporation doesn't actually exist. It is merely the name of a giant conglomeration of people in a distinct hiearchy who is made beholden to equally faceless stockholders. A corporation is a giant puppet. And if the puppet does bad, the puppet can be sued and lose lots of money. It can even go bankrupt or evn get so bad of a name that it has to actually fold or change its name.

But even if the worst happens to the corporations, those who made the puppet do its actions get off scot free. They can abandon to better jobs before the shit hits the fan or be hired to another company for whom the board of directors also preside or just retire on the giant pile of bling bling.

Yes, one might say, that sometimes some of the higher officials can get arrested for their crimes, but a) they never serve the time equal to the crime, b)they have a much higher chance of getting off scot free than your average innocent poor minority member in a case with no evidence and that's only when there is overwhelming incontrevertible evidence and distinct public outcry and c)if it occurs, it only targets a few select individuals. At the level of board of directors there are no crimes that can be punished it seems.

So is this the fault of corporations or a faulty justice system? I argue the latter. Corporations earn the utter hatred of humanity because their highest members often exploit the image of their corporations in order to perpetuate injustice. Using company lawyers, high positions, washington insiders and the huge amounts of money at the disposal of a company to insure that actions that would get one's face smashed in with a pipe in your average urban hood get a free pass. Similarily when a man gets life for 3 cases of smoking pot or stealing a grnad total of 17 dollars from the quick-e-mart and another loots a couple of billion from a company while simultaneously ruining the lives of thousands of employees, one cannot help but feel betrayed by the system and believe corporations to be headed by evil men.

The guilt by experience also continues by those who work in a corporation. Those on the bottom often experience random layoffs, cutbacks, and other short-sighted and cold attacks which remove their job with no reference to their performance. Especially when you are broke and a job is the difference between making rent or being homeless, one cannot help but take it personally, especially when you are told the day before that there are no plans to cut down staff and don't you dare look for another job.

These downsizing tactics wherein the company expects total loyalty to the employee while offering absolutely zero loyalty to the employee. Wherein the employee is expected never to search for another job and must give plenty of notice, but the company can fire somebody in a day is frankly cruel and breeds contempt. I have now accumulated over a dozen friends and reasonably close acquaintances who in the last three years have nearly become homeless, have gone hopelessly into debt to me, or had to move back in with their parents because of shit like that.

The problem all too often becomes one of distance and size. In a large corporation, those on top have no knowledge of those on the bottom. They are nameless stats on a page and thus their whims often can have devastating effects on the bottom while at the same time be clueless as to what's going down. Middle managers can be good or evil, but even at their best they are held to heel by the decisions from on high in what they can save down below. If up above wants to pay an expensive consultant to fire half teh staff, there is naught even the best middle manager can do, even if those who best survive that slot end up being those who are sycophants who play the game better than they actually manage. Again these decisions breed contempt.

Anyway, the battle over what a corporation is can be waged between Randist Idealists shouting that a corporation can never do wrong (the price gouging is because of Frosted Flakes and the direct contempt for the public is just cause macroeconomics is hard and all that delusional bullshit) and Perpetual Bottom Dwellers who have never been treated well by a corporation or have been nearly driven out of their home because of a corporations whims and have no love to spare them other than an intense belief that they are purposefully up to no good. And to their credit it's what can help them survive the whims that could lose them their job at any minute. By expecting the worst, you can prepare yourself better.

Overall though, I think the most accurate description of most is Scott Adams. Sometimes evil, sometimes stupid, and occasionally good. Too enwrapped in protecting itself. No justice for the top and the bottom always suffering the most with each bad decision or random whim or neccessary financial decision or financial reality or anything and everything. But at the end of the day, in itself amoral, relying only on people to colour it. Or rather to colour the illusion.

For a corporation is an illusion. It doesn't actually exist and all its good or evil results entirely from the wisdom and empathy of the people who run it and all of those it hires. A corporation is our capitalistic self. All our greed and innovation. What it becomes, what we allow it to become, is the result of us trusting too much that our fellow humans would never do that for mere money.

Optimists...feh. Yeah, those types of people thought communism would work too.

 

[Lucifer_Carroll]

Must have hit a sore spot. Typical behavior.

I may not know you per say, but I have meet and worked with plenty like you.

Resorting to name calling does nothing but show everyone else how childish you are. Keep going I'm getting a really good laugh out of it.

Now go wipe your nose and tell mommy to put you to bed!

Actually, truth be told you are being an incredible asshole. I don't particularly mind and I doubt at the end of the day our enumbered friend will be crying on a pillow at the mean words you state. So, you can either continue to be puposefully abrasive or you can grow a pair and apologize when you're being unneccesarily confrontational.

Supporting fiscal conservatism in no way neccesitates being a bastard. But actions like yours make the stereotypes come in to being and make lefties and liberals feel all justified when they think of all republicans as hideous excuses for human beings.

Speaking on behalf of yourself, the late Colly, and Roxanne Appleby and the other fiscal conservatives who grace the boards, I doubt that is what you want in the slightest.

Good day and whatever your deity may be bless.

 

[672]

Must have hit a sore spot. Typical behavior.

I may not know you per say, but I have meet and worked with plenty like you.

Resorting to name calling does nothing but show everyone else how childish you are. Keep going I'm getting a really good laugh out of it.

Now go wipe your nose and tell mommy to put you to bed!

You're assumptive. You can't judge every single human being by one who has met you. Perhaps all the people like me are not to your liking, because you're such an uptight snob. Ugh. You're like the rich people who say, "Oh yeah, I used to be poor...back then. When we only lived in a Duplex and had basic cable. Oh those horrible, horrible days."

Yeah. Mommy? What the hell? What kind of person completely eliminates opposition by invalidating them as just whiny? Oh boo hoo? Sorry we can't all be like you, oh wise and humble Zeb Carter.

Get off the horse, yah? Perhaps if you hadn't responded to me AT ALL, instead of with your childish insults, I wouldn't be here.

 

[JamesSD]

There is a show on the History Channel called "Modern Miracles," and some of them are about how things are made in huge quantities - candy, beer, liquor, and some durable goods too. I know you're havin' fun here, but check it out some time - it's pretty damned impressive.

I've seen that show. It's totally one that I think "This should be boring me," and yet I keep watching it, enraptured. I watched one on how they manufacture pretzels. Seriously, pretzels!