THE CURRENT AMERICAN BUSINESS MODEL IS DEEPLY CORRUPT—AND INEFFICIENT
AND IS BAD FOR AMERICAN BUSINESS, THE ECONOMY AS A WHOLE, AND MOST AMERICANS.
SHARE-BUY BACKS ARE JUST ONE ROTTEN APPLE. THERE ARE MANY OTHERS.
The following is a random list of a small selection of the deficiencies of the current American Business Model.
- It has suborned our political system so that we no longer have a true representative democracy—and is has caused widespread corruption at state and local level as well.
- It opposes every single effort made to clean up the environment.
- It opposes any and all forms of new labor rights—and works very hard to dismantle the rights that exist.
- Culturally, it is wedded to optimizing shareholder value even though such an approach leads to CEO greed, short-termism, excessive and damaging corporate share buybacks, poor labor relations, under-investment, neglect of the community—and much else that is negative besides.
- It is excessively financialized even though that state is known to impede successful economic growth.
- It has led to the hoarding of over $2 trillion overseas—money which should, largely, be invested in the U.S.
- It is underinvesting in Research & Development, and Plant & Equipment.
- Its productivity growth is negligible.
- The earnings of most Americans, when real inflation is factored in, are declining.
- Lack of international competitiveness. The U.S. hasn’t balanced its international trade for decades.
The following is just one example of how corporate CEOs have turned corporations into their private piggy banks in the name of maximizing shareholder value.
It is about time that corporate share buybacks were regarded as exactly what they are—insider trading (and thus illegal). The inertia of the SEC in this matter is a disgrace.
The level of corruption in the financial area—a key part of American Business Model—is totally out of hand.
America is suffering accordingly.