How To Think Like A Progressive

The Guardian is very upset that the wealth of poor people has tripled over the past 15 years

ScreenHunter_6219 Jan. 19 06.59

New Oxfam report says half of global wealth held by the 1% | Business | The Guardian

This explains why they want carbon taxes, which will help the rich and devastate the poor.

About stevengoddard

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47 Responses to How To Think Like A Progressive

  1. philjourdan says:

    It is not the poor they care about, only the wealthy. If they can make everyone poor, then they have succeeded.

    • SxyxS says:

      Well
      -the only way for the superrich to get even richer without being lynched is to transfer the money from the middle class to the top and the bottom.
      Al Gore made 100s of millions with the carbon tax.
      That was always part of the plan

      just like progressive superrich good doer bill gates is proGMO.
      He says it is to help the poor while he owns millions of monsanto share.

      Poor farmers who can barely survive with free seed are more likely to die if they have to pay monsanto for the seed .

      to be more precise-it is not really about money but about controle and taxing the whole world gives you even more controle than replacing in single countries unwanted presidents with puppet regimes.

      • Gail Combs says:

        Kissenger stated you want to control, Money, Food and Energy.

        Money – The Central Bankers have that covered.
        Some think that Gadhafi got taken out because he challenged the Central Bankers. Remember he was visited several times by his good pal Tony Blair. Blair got Gadhafi’s son into the London School of Economics. At the time of the visits Blair was working for the UN and J.P. Morgan.

        Gadhafi’s plan to quit selling Libyan oil in U.S. dollars — demanding payment instead in gold-backed “dinars” (a single African currency made from gold) — was the real cause. The regime, sitting on massive amounts of gold, estimated at close to 150 tons, was also pushing other African and Middle Eastern governments to follow suit.

        Now the BRICS countries have challenged the Central Bankers by forming their own ‘World Bank’ and amassing gold. That could turn into a real SHTF moment if the BRICS countries don’t back down.

        FOOD – The WTO Agreement on Agriculture and the joint FAE, OIE, WTO issuance of “Good Farming/Agricultural Practices’ plus ‘Harmonization” of laws globally takes care of grabbing control of food. Of course the real biggy is the stealing of genetics from poor farmers and patenting it. In the USA Monsanto Pinkerton agents trespass on private land take samples and then sue the farmer for ‘stealing’ the pollen that trespassed onto his land and CONTAMINATED his non-GMO crops. The US courts upheld Monsantos right to do this.

        In India they beat the crap out of a Monsanto rep, I wonder why? Maybe the record number of suicides by Monsanto ripped off farmers had something to do with it.

        ENERGY – If they can get their blasted Universal Carbon tax through they will have control of energy. Control energy and you have control of production and complete control of a countries economy.

  2. A C Osborn says:

    Steven, if possible you should try and watch the BBC program “The Super Rich and Us” that was shown on BBC2 last Thursday and the Thursday before. It clearly explains how this came about.
    The super rich have been draining the poor, lower and middle classes for a long time under the pretence that if the Rich get Richer the wealth will trickle down to the rest of us, but it doesn’t it only trickles up to them.
    Unlike the Victorian Era when a lot of the wealthy were philanthropists and made life better for their employees and their country in general the modern super rich only care about making even more money to squander on their rich man’s toys.

    • AC The super rich don’t drain the poor. The super rich provide jobs the poor never would have gotten.

      Earth does not provide us with wealth to be distributed. Earth provides us with air, mud, rocks and sticks.

      Henry Ford was an evil person for being rich. He made millions of cars for people to drive, gave jobs to hundreds of thousands of people. He got rich, so what, it trickled down to cars and jobs for millions of people. But idiots like you think he drained the poor, that’s just pathetic.

      • rah says:

        Progressives look at wealth as a zero-sum game. That is there is only so much and new cannot be created without taking from others. That misconception is what fosters all their other misconceptions.

        • The progressive zero-sum concept of wealth has an ancient origin in folklore and mythology. Every old fairy tale about a poor boy or girl getting rich has wealth either created by magic or taken from someone else. That traditional view was completely uprooted by the advent of free markets and the modern industrial society but human psyche changes slowly. Today’s “progressive” world view is based on the most regressive and reactionary ideas man has about his position in the world.

        • Gail Combs says:

          There is also the misconception that the current crop of wealthy elite are also industrialists, pro-capitalism, pro-technology and for the advancement of human civilization.

          Unfortunately many inherited their wealth and are not scientists or engineers. In a word they are NOT Henry Ford’s and they know it. I think this gives them a bit of hidden inferiority complex and that is why they are afraid of the middle class. That is why they want to grab tight to the controls of power. That is why they tell themselves and each other they are our ‘superiors’

          I certainly agree that there seems to be a perverse mindset that wealth is a zero-sum game. It goes along with the beliefs:
          1. All our resources are running out.
          2. There are too many people.
          3. We should not try to advance any further because technology is EVIL and it hurts Mother Earth….

          As I said I think the elite are overwhelmed by the advances we have made in technology. They use it but don’t understand it and they are afraid of the working middle class who does.

        • philjourdan says:

          Actually, most rich are first generation, so less than 20% are Paris Hiltons – http://finance.yahoo.com/news/pf_article_110333.html

        • Robert B says:

          A good summary of the big fault with capitalism and the massive one with socialism (where the children of the original incompetents inherit a place on the committee).

          “Unfortunately many inherited their wealth and are not scientists or engineers.”

        • darrylb says:

          Gail, on this rare occasion, I am going to disagree with one thing that you have written.
          I do believe that fossil fuel quantities are quite finite. A key ingredient in the world population going from 2 to 7 billion in the last century was the availability and usage of fossil fuels, and most were consumed in the last century.
          Fossil fuels, of course, only contain solar energy which has been stored over eons of time. Considering the methods in which we obtain the fossil fuels, one can see that we have already consumed the lowest hanging fruit of the fossil fuel tree.
          In consuming fossil fuels we are simply returning the CO2 from where it came.
          I am not saying that we don’t have significant fossil fuels for many generations.
          However, unless some unforeseeable event happens we will increase our use of fossil fuels.
          To be sure, for the most part we are simply using solar energy which has been stored over a very long time, –or we are using current solar energy, so called renewable green energy which does much more harm that the greens want to believe.
          However, regardless of how efficient we become, it can readily be shown mathematically that use of current solar energy will be inadequate.
          Therefore, I will argue that sooner or later our primary source of energy will no longer be from the outside of the atom (although some will be) but within the nucleus of the atom where there is an unlimited supply.
          Nuclear energy will be our main source of energy;and, I feel that we should continue to develop its usage and safety parameters to ensure our (so many greats)
          grandchildren s ‘ future.

        • rah says:

          Paris, though still a bit of a nut has grown up some. She is involved in some pretty good philanthropic efforts now. Even some spoiled rich kids grow up eventually.

        • Neal S says:

          To darrylb; hydrocarbons have been found on Titan and in comets. I seriously doubt that anyone could convincingly argue that these hydrocarbons happen to be the result of plant/animal life after eons of time. There must be some other non-living source of hydrocarbons. (unless you happen to believe there are plants/animals on titan) Is there any reason to believe that whatever produced these off-earth hydrocarbons did not also produce some here on earth? There is also evidence of oil fields once thought exhausted, producing more oil. Where did that come from? Maybe a lot of what we think we know about oil and coal is just NOT right. Just because you have been taught something for a long time, and not given any other explanation, does not make what you have been taught right. This is similar to what is happening with AGW. We have nearly a generation that has been taught nothing else, and far too many of them simply accept the conclusions that they have been fed for years.

        • darrylb says:

          Neal S. point well taken.
          What you have stated hints at the point that we should never be absolute in our thought..
          I have read about most of what you have written. The oil fields, which is that of which what I have read the most, is still somewhat speculative and needs more research.
          (My daughter first mentioned it to me)
          As for Titan, it may be evidence that Jupiter and its moons were once closer to the sun, I really do not know.
          However, the key point of what I am stating, and I don’t think there is convincing evidence otherwise is that even though there may be some production of hydrocarbons, the net change is one of depletion because we are using a large quantity, a point to which Gail agrees.
          My primary scientific endeavor is in physics, and so I tend to think quantitatively.
          I believe Gail and I converged in our thinking in that nuclear energy (the main driver of the universe) could be used to produce petrochemicals, bypassing the plant kingdom.

        • rah says:

          Back from Laredo. Trip went fine. Took 54.5 hours to make the round trip because we had to wait 6.5 hours for the back haul.
          New truck Report. Pros & Cons listed in order of priority for me.

          Cons:

          The FreightLiner does not feel as solid or comfortable in high speed turns. IOW I will be taking exit ramps and certain turns 5 to 10 mph slower than I did in the Volvo with a comparable load.

          2. The FrieightLiner is slower on acceleration through the whole range but particularly the lower slower speed end and the last 5 mph coming up to full governed cruise speed of 65 mph.

          3. Steering input is stiffer in the FreightLiner.

          4. Small stuff like having only two 12 V outlets of front and considerably less storage within reach of the driver in the seat.

          Pros:
          1. FrieghtLiner braking is superior to the Volvo and that includes emergency braking. In conjunction with that the 3 stage engine (Jake) brake is even more powerful than the very good 3 stage Jake on the Volvo. But the FrieightLiner Jake brake is louder.

          2. More comfortable seats in the FreightLiner and a quieter cab and better ride.

          3. Larger sleeper with more storage including 2 closets with doors. Plus pillow top twin mattress compared to the cheap single mattress in the Volvo onto which I had to put a memory foam topper just to be reasonably comfortable. Both tractors had condo sleepers meaning they have upper bunks and that Freihtliner upper bunk plus stowage is much superior to that in the Volvo.

          4. Now this may seem like a small thing but it’s more important than you may think. Both tractors have two curtain sets. The regular one that just encloses the sleeper area and the front curtains that close off side windows and windshield. The FrightLiner’s are far superior to the Volvos because they have velcro the whole length thus are quick and easy to make a tight seal and because they are well insulated for thermal and sound.

          5. Frightliner has a larger DEF tank.

          Mileage going down to Laredo pulling an unskirted trailer with 40,000 lbs of freight: 7.3 mph
          Mileage coming back pulling and unskirted trailer of the same make with less than 20,000 lbs of freight: 7.7 mph.

          Mileage will improve once the Super Single drive tires on the tractor wear in. Suspect that in the future it will improve so that I will get at least 8/10ths more mpg than I did with the Volvo. And that is why the company started buying some freight Liners in the first place.

        • philjourdan says:

          Rah, first, I hope you did not have to test those brake performances!

          Second, welcome back.

          And third, it seems the mark of a high end “vehicle” is they scrimp on the 12v outlets! My Toyota has 3 up front. My wife’s Caddy has one! Go figure!

      • A C Osborn says:

        Morgan, I suggest you watch the programme before making a complete fool of yourself.
        It is clear that the “modern” rich are nothing like the previous rich.
        Instead of providing jobs they are busy buying up the world and making it impossible for even the middle classes to compete.

    • Gail Combs says:

      “Unlike the Victorian Era when a lot of the wealthy were philanthropists and made life better for their employees and their country in general the modern super rich only care about making even more money to squander on their rich man’s toys.”

      I really wish that was true. It would be a lot less dangerous to the rest of us. They would just steal from us and other wise leave us alone to continue producing. No what the rich want is complete control because they know best what is good for their cattle.

      Another Fabian eugenicist, the writer H.G. Wells, vented his frustration and indignation in a direct address to the working class. ‘We cannot go on giving you health, freedom, enlargement, limitless wealth, if all our gifts to you are to be swamped by an indiscriminate torrent of progeny,’ he complained, ‘…and we cannot make the social life and the world-peace we are determined to make, with the ill-bred, ill-trained swarms of inferior citizens that you inflict upon us.’
      How eugenics poisoned the welfare state: A century ago many leading leftists subscribed to the vile pseudo-science of eugenics and the influence of that thinking can still be seen today

      “The benevolent tyrant is more dangerous than the malevolent tyrant.” ~ Karl Popper

      • rah says:

        BTW Gail, I’m in the new FreightLiner now. Worked on moving into FreightLiner truck# 21533 for 6 hours Saturday. Watched an hour long video on the truck. Brought the manuals home. Sunday went in and finished the move getting everything organized. Then I started working on the the details of how to work everything and finding things I knew it had to have but had not found. Things like the towing eyes, fuze panels, etc. And also getting the stuff like spare windshield wiper blades and fuel filter kit from parts. The truck has 82 miles on it and has features that even the first 2015 FrightLiners didn’t have so being one of the first to get this newer version 2015.

        Sometimes it’s simple things that eat you up. For example setting the clocks, which it turns out for the digital readout on the dash of the truck was impossible to do without help and still isn’t done. Went through the menus and could set for time zone and using the 24 hr military time instead of the 12 hour clock. But there was no function for changing the time. Took it to the garage and they tried and couldn’t figure it out either. So they called the dealership, and they didn’t know either since it was a new system and said they would have to call the Freight Liner technical support on Monday! Those are the kind of little things that eat up massive amounts of time.

        Still not completely comfortable with how the environmental control system works when parked. Not a regular APU but a battery powered system that has the engine automatically restart when the batteries running the environmental system get down below a certain voltage. And still not comfortable that I know the full functions of the cruise control in conjunction with the engine brake. It says it does have the feature I liked so much on the Volvo where you can set it to freewheel down hill up to a certain speed where the transmission and the engine brake kicks in to maintain that top down hill speed. Just haven’t quite figured out how to set it and work it yet. But I know enough now that I can get on the road and drive it safely and the other stuff will come with time.

        I was informed this morning that I should go to the garage and there is a guy there that is familiar with the new systems so he can perhaps help answer my questions. I was also informed that I will be teaming with another guarantee driver in my truck on a round trip to Laredo, TX. Though I have been to Laredo probably 50 times in my truck driving career this will be the first time in over three years that I’ve been down there. Looking forward to it. If they have our back haul ready we should be able to turn the 2,680 mile round trip in 46 to 48 hours.

        • I enjoy your reports on trucking.

          I hope the junior geek who was entrusted with the unsupervised programming of the time setting feature was not allowed to work on any other part of the truck’s system.

          Have a good round trip and let us know soon what you learned.

        • Gail Combs says:

          Have a safe trip rah and have fun figuring out how to run all the gizmos on your shiny new toy.

          Fred Heim: big toys for big boys

          (It is a Pete that looks like my old Pete and get this—that 1/2 scale model runs! It is powered by a 26-hp diesel tractor engine.)

        • rah says:

          I suspect the problem is that clock is set into the ECU (Engine Control Unit) which also keeps the time for the periodic maintenance. Here is what the truck looks like: http://www.freightlinertrucks.com/Trucks/Models/Evolution/
          Except our are are fire engine red and have parabolic fender mirrors on each side in addition to the west coaster mirrors. Interior is very nice and roomy though I would have preferred a little more up front storage within the drivers reach when driving. Bought nice new 3′ x 5′ carpet for the center isle and washed my good floor mats before putting them in the new truck. We leave for Laredo at 05:00 tomorrow. Route I-70 W to I-57 S to I-55 S to I-40 W to I-440 bypass around Little Rock to I-30 to Dallas to I-35W south to I-35 through Austin and San Antonio.

          These Freightliners are supposed to get the best mileage of all OTR trucks so the tanks are full and I’m gonna see if I can make the 1,340 miles to Laredo without refueling.

        • philjourdan says:

          Truckers – the legacy of Jeremiah Johnson lives on!

          Have a safe trip.

        • Gail Combs says:

          rah,

          I take it your trailer has the skirting does it also have this?

          Let us know what your fuel mileage is for the trip.

        • rah says:

          Trailer may or may not have skirts. Still have quite a few that don’t. Not worth the money to put them on the older trailers that only have a few years service life left in them. Carter it testing the trailer tails you show there. I suspect that we’ll end up with some used for the longest hauls but when you bumping a lot of docks on a milk run that goes maybe 500 miles per day they just aren’t worth it. Personally I have no desire to have anything to do with those tails.

        • rah says:

          Thanks Phil. New trucks almost always have bugs so I wouldn’t be surprised if we have to work some out on this shakedown cruise. Looks like their forecasting some rain for when were down there but still a heck of a lot warmer than it is here. Nice to go south instead of the usual steady diet of North or East.

        • rah says:

          Ok, I got in at 11:30 this morning but was logged into the sleeper birth for the last driving shift so have had my break. So it’s back on the road again. 700 mi round trip to Smyrna, TN and back (East of Nashville). Nissan needs their parts to build automobiles it seems.

      • gator69 says:

        “The benevolent tyrant is more dangerous than the malevolent tyrant.”
        ~ Karl Popper

        Lewis explains this…

        “Of all tyrannies, a tyranny sincerely exercised for the good of its victims may
        be the most oppressive. It would be better to live under robber barons than
        under omnipotent moral busybodies. The robber baron’s cruelty may sometimes
        sleep, his cupidity may at some point be satiated; but those who torment us for
        our own good will torment us without end for they do so with the approval of
        their own conscience. They may be more likely to go to Heaven yet at the same
        time likelier to make a Hell of earth. This very kindness stings with
        intolerable insult. To be “cured” against one’s will and cured of states which
        we may not regard as disease is to be put on a level of those who have not yet
        reached the age of reason or those who never will; to be classed with infants,
        imbeciles, and domestic animals.”

        – CS Lewis

        • Gail Combs says:

          Thanks that was the exact quote I was trying to find.

          …This very kindness stings with intolerable insult. To be “cured” against one’s will and cured of states which we may not regard as disease is to be put on a level of those who have not yet reached the age of reason or those who never will; to be classed with infants, imbeciles, and domestic animals.”
          Isn’t that exactly what we are seeing from the Nanny State?
          Isn’t that exactly what the government is doing when they make the use of recreational drugs illegal and the use of seat belts and helmets and infant child seats mandatory?

          Isn’t that exactly what Community Colleges are saying to people old enough to vote when they will flunk a straight A student because she missed three classes?

          Isn’t that what they are doing when they say they have to take away or guns and knives.

          Aren’t they telling the adult population in the USA you are to STUPID and immature to be considered grown-ups even though we will ‘allow you to vote for us’?

        • Daavid A says:

          I always liked this, “Such is the nature of the Tyrant, when he first appears, he is a protector”
          The author is Plato.
          So nothing new under this sun .

  3. lemon says:

    Its the 80/20 rule – 80% of everything is held by 20% of people and 80% of the remainder (16%) is held by remaining 80% and so on until 1% has 50%.
    Just the way things work

  4. Tom Moran says:

    @AC Osborn, I’d like to hear your views on the rise of the billionaire class in Russia. Wasn’t everyone equal poor under communism? How did the rich get rich so quick?

    • rah says:

      Putin? He has obviously chosen the winners and losers it seems. And some of the losers that at first were winners that he didn’t like ended up in jail or dead.

      • SxyxS says:

        you obviously do not know much

        During the era of the 7 oligarchs(all of them belonged to the same very small group)
        life expectancy in russia dropped almost to sub 50year levels(and was as low as in india.
        After he expelled the 7 oligarchs life expectancy rose to 70years+
        the countries productivity went up 10x(though still pretty low)
        pensions grew 5x
        average income in russia went up 500%
        inflation went down from an average 37% pa to 6% a years.(until the trouble with the usa over ukraine and syria occured)

        Only those oligarchs who agreed to share their profits with the common people and stay out of politics were allowed to keep their oligarch status in russia as long as they stay out of politics.

  5. gator69 says:

    I for one am not covetous. I am grateful for the rich, and super rich. I have never worked for a poor man. There are many incredible works of art and endeavors that only the rich could/would bankroll, and for that I am also grateful.

    Haters are so childish.

    • Gail Combs says:

      It is not the super rich who are the problem. It is the super rich who think of the rest of us as “The Great Unwashed” The super rich who think they have to control every aspect of our lives “For our own good” Those are the ones who are dangerous.

      In the 1970s and 1980s I worked for some decent companies. They looked at people as people. In a couple of the mid size corporations the owner would actually come around to hand out the checks to each person and talk to them. No one was in awe or feared him and if there was a problem or someone had a good idea he was approachable at that time.

      Now corporations see workers as interchangable cogs. Hit 40 and they want you to train your replacement and kick you out the door. Corporations no longer see an employee as a long term investment and employees are no longer emotionally invested in the corporations.

      I do not see that as a good trend.

  6. gator69 says:

    Speaking of Progressives, it appears security camera footage has revealed what really happened to Harry Reid, and it wasn’t an exercise machine malfunction.

  7. Jason Calley says:

    At the risk of stating the obvious, there are two different ways of accumulating wealth. The first is by way of the market. In the market, one either creates wealth directly from rocks, mud and plants, or one trades other goods and services for wealth. I LIKE market wealth! The second way of accumulating wealth is through political means, a.k.a. theft (sometime called “legislation.”)

    The essential difference is this; In the market, every transaction is based on this principle, “If you voluntarily do this exchange with me, you will be be better off because of it.” In the political realm, each transaction is based on this principle, “If you refuse to do this demanded exchange with me, I will make you worse off than you are now.”

    Market and politics are opposites.

    If (for example) Monsanto made their profit from market forces, I would be all in favor of them. Everyone who used Monsanto products would be doing so because, in their judgement, they would be better off by doing so. Same with every other business. But instead, Monsanto is acting through politics. They are bribing legislators to pass laws forcing people to either do business with Monsanto or to be killed by men with guns.

    The distinction between proper wealth accumulated by ethical market means, and stolen wealth, accumulated by political means of threat and coercion is ABSOLUTELY VITAL.

    Sorry for shouting… but yes, the difference really is that important.

    • Gail Combs says:

      There is a third method of theft that is even worse than the one you mentioned.

      Hostile Takeovers.

      The bank prints up fairy dust fiat money. A Corporate raider (Think Romney) then uses the fairy dust to buy a controlling number of shares of stock. The raider can then take the company private, compel spin-offs, call for an entirely new board of directors or call for a divestiture of assets to pay off the bank. The Raider makes a fortune, the bank makes a fortune, the company is gone and the employees are unemployed.

      This is what happened to America’s wealth, to her manufacturing jobs and to her mid size companies. America was literally bought with monopoly money and the acquired assets sold off. I knew a guy in Boston whose business was packing up factories and shipping them overseas.

      Gillette is an example.

      In the 1970’s and early 80’s Gillette was a wealthy well run company with NO DEBT. Mockler fought off the first attempted take over by Pearlman but had to pay off shareholders with excessive dividends. That left Gillette vulnerable to the next attempt:
      THE STALKING OF GILLETTE How ”very active” investors fought to bring a giant consumer-products company to its knees.

      The leveraged buyout boom of the 1980s was conceived by a number of corporate financiers, most notably Jerome Kohlberg, Jr. and later his protégé Henry Kravis. Working for Bear Stearns at the time, Kohlberg and Kravis, along with Kravis’ cousin George Roberts, began a series of what they described as “bootstrap” investments… WIKI

      So what did the US government do?

      …In January 1982, former US Secretary of the Treasury William Simon and a group of investors acquired Gibson Greetings, a producer of greeting cards, for $80 million, of which only $1 million was rumored to have been contributed by the investors. By mid-1983, just sixteen months after the original deal, Gibson completed a $290 million IPO and Simon made approximately $66 million.[9] The success of the Gibson Greetings investment attracted the attention of the wider media to the nascent boom in leveraged buyouts. Between 1979 and 1989, it was estimated that there were over 2,000 leveraged buyouts valued in excess of $250 billion….. WIKI

      A US Secretary of the Treasury started the sellout of our economy. Reagan through his laissez faire attitude did nothing to stop it.

      …Both economic and regulatory factors combined to spur the explosion in large takeovers and, in turn, large LBOs. The three regulatory factors were the Reagan administration’s relatively laissez-faire policies on antitrust and securities laws, which allowed mergers the government would have challenged in earlier years; the 1982 Supreme Court decision striking down state antitakeover laws (which were resurrected with great effectiveness in the late eighties); and deregulation of many industries, which prompted restructurings and mergers. The main economic factor was the development of the original-issue high-yield debt instrument. The so-called “junk bond” innovation, pioneered by Michael Milken of Drexel Burnham, provided many hostile bidders and LBO firms with the enormous amounts of capital needed to finance multi-billion-dollar deals…. http://www.econlib.org/library/Enc1/TakeoversandLeveragedBuyouts.html

      Without intervention, and an unlimited supply of fairy dust fiat money from the Fed’s printing press greed took over.

      Corporate takeovers became a prominent feature of the American business landscape during the seventies and eighties. A hostile takeover usually involves a public tender offer—a public offer of a specific price, usually at a substantial premium over the prevailing market price, good for a limited period, for a substantial percentage of the target firm’s stock. Unlike a merger, which requires the approval of the target firm’s board of directors as well as voting approval of the stockholders, a tender offer can provide voting control to the bidding firm without the approval of the target’s management and directors…..
      Because it allows bidders to seek control directly from shareholders—by going “over the heads” of target management—the tender offer is the most powerful weapon available to the hostile bidder. … Although hostile bidders still need a formal merger to gain total control of the target’s assets, this is easily accomplished once the bidder has purchased a majority of voting stock.
      Hostile tender offers have been around for decades, but they were rare and generally involved small target firms until the midseventies. Then came the highly controversial multibillion-dollar hostile takeovers of very recognizable public companies. By the late eighties there were dozens of multi-billion-dollar takeovers and their cousins, leveraged buyouts (LBOs). The largest acquisition ever was the $25 billion buyout of RJR Nabisco by Kolberg Kravis and Roberts in 1989. [Editor’s note: this was written in 1992.] …. (wwwDOT)econlib.org/library/Enc1/TakeoversandLeveragedBuyouts.htm

      This is the result of the 1980’s leveraged buyout feeding frenzy..

      Of mergers and acquisitions each costing $1 million or more, there were just 10 in 1970; in 1980, there were 94; in 1986, there were 346. A third of such deals in the 1980’s were hostile. The 1980’s also saw a wave of giant leveraged buyouts. Mergers, acquisitions and L.B.O.’s, which had accounted for less than 5 percent of the profits of Wall Street brokerage houses in 1978, ballooned into an estimated 50 percent of profits by 1988

      THROUGH ALL THIS, THE HISTORIC RELATIONSHIP between product and paper has been turned upside down. Investment bankers no longer think of themselves as working for the corporations with which they do business. These days, corporations seem to exist for the investment bankers…. In fact, investment banks are replacing the publicly held industrial corporations as the largest and most powerful economic institutions in America….
      January 29, 1989 http://www.nytimes.com/1989/01/29/magazine/leveraged-buyouts-american-pays-the-price.html?sec=&spon=&pagewanted=all New York Times

      The damage done by Reagan was finished by Clinton with his ratification of the World Trade Organization and his betrayal of the USA to China.

      • Tel says:

        If you get a chance, read Adam Smith, on the two types of shareholder corporations, and why one works better than the other.

        • Gail Combs says:

          Thanks for the tip Tel.

          One of the things I did not mention above is why what happened to the US corporations happened so easily.

          Unfortunately I am going to have to post this piecemeal because WordUnImpressed keeps eating the comment. I am getting really sick of WordUnImpressed shenanigans.

          The key to understanding who actually controls US corporation shares and therefore was voting to allow the ripping apart of companies like Gillette is Mutual Funds and Pension funds. This is how a small group can wield a lot more power than their actual wealth would indicate. One of the points brought up in the The Network of Global Corporate Control paper.

          This means that network control is much more unequally distributed than wealth. In particular, the top ranked actors hold a control ten times bigger than what could be expected based on their wealth….
          journals(DOT)plos.org/plosone/article?id=10.1371/journal.pone.0025995#s3

          Pension money of course is certainly not controlled by the individual.

          Here is one of the common misconceptions about mutual funds. Investors don’t actually own the stock their money buys via mutual funds.

          What are mutual funds?

          A mutual fund is a company that pools money from many investors and invests the money in securities such as stocks, bonds, and short-term debt. The combined holdings of the mutual fund are known as its portfolio. Investors buy shares in mutual funds. Each share represents an investor’s part ownership in the fund and the income it generates.

          If for example you look at Monsanto you will see that a large chunk of the shares are held by Institutional Holders (pensions) and Mutual Fund Holders. Although the money invested belongs to the average citizen the shares held are VOTED by someone else. For example when I checked several years ago divisions of Fidelity held a total shares: 39,127,443 or 7.15% The founding Johnson family controls most of Fidelity, and Edward C Johnson 3rd, chairman of the group vote those shares.

          Power of Attorney to vote Fidelity Management & Research Company (FMR LLC0 shares in Monsanto

          ….Devonshire Street, Boston, Massachusetts 02109, a wholly- owned subsidiary of FMR LLC and an investment adviser registered under Section 203 of the Investment Advisers Act of 1940, is the beneficial owner of 26,388,306 shares or 4.816% of the Common Stock outstanding of Monsanto Company (“the Company”) as a result of acting as investment adviser to various investment companies registered under Section 8 of the Investment Company Act of 1940.

          Edward C. Johnson 3d and FMR LLC, through its control of Fidelity, and the funds each has sole owner to dispose of the 26,388,306 shares owned by the Funds.

          Members of the family of Edward C. Johnson 3d, Chairman of FMR LLC, are the predominant owners, directly or through trusts, of Series B voting common shares of FMR LLC, representing 49% of the voting power of FMR LLC….

  8. Gail Combs says:

    If you look at the history of mutual funds you can see a lot of money was invested via mutual funds rather than directly.

    A Brief History Of The Mutual Fund

    …The idea of pooling resources and spreading risk using closed-end investments soon took root in Great Britain and France, making its way to the United States in the 1890s….
    The creation of the Massachusetts Investors’ Trust in Boston, Massachusetts, heralded the arrival of the modern mutual fund in 1924. The fund went public in 1928, eventually spawning the mutual fund firm known today as MFS Investment Management…..

    The mutual fund industry continued to expand. At the beginning of the 1950s, the number of open-end funds topped 100. In 1954, the financial markets overcame their 1929 peak, and the mutual fund industry began to grow in earnest, adding some 50 new funds over the course of the decade. The 1960s saw the rise of aggressive growth funds, with more than 100 new funds established and billions of dollars in new asset inflows.

    Hundreds of new funds were launched throughout the 1960s…..

    In 1971, William Fouse and John McQuown of Wells Fargo Bank established the first index fund, a concept that John Bogle would use as a foundation on which to build The Vanguard Group… [Top shareholder in Monsanto BTW]

    With the 1980s and ’90s came bull market mania and previously obscure fund managers became superstars; Max Heine, Michael Price and Peter Lynch, the mutual fund industry’s top gunslingers, became household names and money poured into the retail investment industry at a stunning pace….. Shady dealings at major fund companies demonstrated that mutual funds aren’t always benign investments managed by folks who have their shareholders’ best interests in mind.
    (wwwDOT)in*ves*tope*dia.com/articles/mut*ual*fund/05/mfhis*tory.asp

    One of the advantages Gillette had that allowed Mochler to hold onto the company for so long was much of the stock was directly owned by employees and retirees thanks to their very nice stock matching plans.

    (delete * — I will be darned if I can figure out why WordUnImpressed dislikes that link.)

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