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Calumet files Chapter 7
On Sat, 22 Mar 2014 10:38:49 -0400, Robert Coe wrote:
--- snip --- : Calumet provided jobs and income to hundreds of employees over a 75 : year span. The income of those employees provided jobs and income to : the many businesses who they patronized. The purchases by Calumet : provided jobs and incomes to many vendors in those 75 years. That's : what capitalism does. : : This isn't a failure of capitalism. It's a failure of a few : individuals to successfully manage a business in a changing market. : Other capitalists reacted more intelligently to the changing market : and provided competition that Calumet couldn't keep up with. Your "barest definition" of capitalism is too bare. Capitalism relies on the creation of corporate entities that can act as though they were individuals or groups of individuals, while insulating their owners from much of the financial liability that individuals would have to assume. You are talking about a limited liability company (LLC). Capitalism has never relied upon these. In effect, the people strike a bargain with a corporation's owners, based on the assumption (the hope, really) that in the long run the societal benefit (in economic activity, jobs created, etc.) will be worth the risk. There are two major problems with the way capitalism is practiced today (at least in the U.S. and probably elsewhere): - Governments are far too reluctant to pull the plug on corporations that no longer serve the public interest well enough to justify their existence. Sometimes a corporation behaves so egregiously that the government that issued its corporate charter should simply cancel it and revert the corporation to a proprietorship or an unlimited partnership. The company's stock price would probably fall to near (or even below) zero, but the owners would have had it coming. And the threat of such an action would be a powerful motivator to promote good corporate citizenship. - Corporations, at least in the U.S., have routinely (and almost always successfully) promoted, almost as a constitutional right, the notion that governments have no business competing with the private sector, even in cases where the latter are behaving in a monopolistic manner and screwing the public. But in fact the U.S. Constitution favors no economic system over any other. Even socialism or communism would be constitutional, though I'm not advocating either system. What I am suggesting is that public-sector corporations should be created to compete with the private sector whenever the latter exhibits a self-interested indifference to the public good. No thank you. Whether you realise it or not, you are advocating that without any possibility of appeal governments take my money and use it to compete with me and my neighbours. Further, the idea that one side in the game also provides the referee is abhorrent. And where is it written that even good corporations should be insulated from any form of public ownership? Corporations aren't reluctant to seek public "bailouts", willingly trading bonds or ownership stakes to get them. It takes _two_ willing parties to do a deal. But when things turn good, they howl if the Government wants to keep its stake long enough to make a profit on the public's investment. Enough ranting. It's not that I'm an actual economist or anything. :^) It would be best if we stayed with photography. :-) -- Regards, Eric Stevens |
Calumet files Chapter 7
On 3/22/2014 10:38 AM, Robert Coe wrote:
snip - Governments are far too reluctant to pull the plug on corporations that no longer serve the public interest well enough to justify their existence. Sometimes a corporation behaves so egregiously that the government that issued its corporate charter should simply cancel it and revert the corporation to a proprietorship or an unlimited partnership. The company's stock price would probably fall to near (or even below) zero, but the owners would have had it coming. And the threat of such an action would be a powerful motivator to promote good corporate citizenship. - Corporations, at least in the U.S., have routinely (and almost always successfully) promoted, almost as a constitutional right, the notion that governments have no business competing with the private sector, even in cases where the latter are behaving in a monopolistic manner and screwing the public. But in fact the U.S. Constitution favors no economic system over any other. Even socialism or communism would be constitutional, though I'm not advocating either system. What I am suggesting is that public-sector corporations should be created to compete with the private sector whenever the latter exhibits a self-interested indifference to the public good. And where is it written that even good corporations should be insulated from any form of public ownership? Corporations aren't reluctant to seek public "bailouts", willingly trading bonds or ownership stakes to get them. But when things turn good, they howl if the Government wants to keep its stake long enough to make a profit on the public's investment. Enough ranting. It's not that I'm an actual economist or anything. :^) What you say makes eminent sense in a perfect world, where there is no chance that the party in poser would use that power for political advantage. -- PeterN |
Calumet files Chapter 7
On 21/03/2014 04:29, Tony Cooper wrote:
On Thu, 20 Mar 2014 21:30:18 -0400, Robert Coe wrote: On Fri, 21 Mar 2014 11:43:07 +1300, Eric Stevens wrote: : If the employees had notice, word would have leaked out into the wider : community and the business would have ground to a halt in a confused : shambles. They would still have been broke but their affairs would : have been in just that more of a mess. It seems to me unlikely that the employees would not have seen the writing on the wall. Bricks and mortar photo stores are a dying breed. You only have to look around inside one to see why. Smartphones have annihilated the point and shoot market, digital zapped print processing. People are in there playing with new expensive kit tying up experienced salespeople to help choose their kit and then blatantly looking on their iPhone to see which website has it for the cheapest price. The same thing that also killed Jessops and Jacobs in the UK. The former even offered to match online prices but it didn't save them(*). (*) A handful of their shops in the premium locations have reopened under new management and the same Jessops name. Translation: There wouldn't have been time for the officers to find a way to take care of themselves before the s*** hit the fan. Understand that I don't know that that's what happened in this particular case, but it IS a time-honored capitalist strategem. A method widely adopted by bankers cut from the same cloth as the infamous Fred the Shred who totally destroyed RBS requiring a massive taxpayer bailout to prevent the global banking system collapsing and still walked away with all his severance pay and pension entitlements. Calumet had, at the time of declaring Chapter 7, less than $50,000 in assets and between one and ten million in liabilities. That indicates a long-term slide downwards, not a sudden descent. There was time for any pre-planning the officers wanted to do without a need for an unannounced immediate closing. It tends to suggest that the directors were guilty of trading whilst insolvent which would be an offence in the UK. This isn't a failure of capitalism. It's a failure of a few individuals to successfully manage a business in a changing market. Other capitalists reacted more intelligently to the changing market and provided competition that Calumet couldn't keep up with. Actually I think it is a failure of capitalism in that people these days buy the cheapest online and screw over the honest dealers. High streets are now increasingly half empty or worse still occupied by charity shops selling tat and payday loan sharks stolen goods. -- Regards, Martin Brown |
Calumet files Chapter 7
On 23/03/2014 00:37, Eric Stevens wrote:
On Sat, 22 Mar 2014 10:38:49 -0400, Robert Coe wrote: And where is it written that even good corporations should be insulated from any form of public ownership? Corporations aren't reluctant to seek public "bailouts", willingly trading bonds or ownership stakes to get them. It takes _two_ willing parties to do a deal. No it doesn't. Try negotiating on price with a ticking bomb on the table and a gun held to your head, when you have toothache with a dentist, or bleeding to death with a US medic... The banks were "too big to fail" and as such were able to completely screw over the tapayers in a "heads we win tails you lose" scam. Shareholders never halt the increase the remuneration for CEOs in an unending spiral whilst simultaneously laying off workers to drive wages for the peons down. US and UK CEO to median wage ratios are obscene. It is no surprise that they all sit on each others remuneration committees and make trite claims like "we are all in it together". -- Regards, Martin Brown |
Calumet files Chapter 7
In article , Martin Brown
wrote: : If the employees had notice, word would have leaked out into the wider : community and the business would have ground to a halt in a confused : shambles. They would still have been broke but their affairs would : have been in just that more of a mess. It seems to me unlikely that the employees would not have seen the writing on the wall. Bricks and mortar photo stores are a dying breed. You only have to look around inside one to see why. Smartphones have annihilated the point and shoot market, digital zapped print processing. exactly. if the employees couldn't see what was happening in the industry and that business has slowed down, then they were either in denial or not paying much attention. People are in there playing with new expensive kit tying up experienced salespeople to help choose their kit and then blatantly looking on their iPhone to see which website has it for the cheapest price. The same thing that also killed Jessops and Jacobs in the UK. The former even offered to match online prices but it didn't save them(*). the stores aren't offering any reason to pay a premium so they go away. no loss. why pay more for less? This isn't a failure of capitalism. It's a failure of a few individuals to successfully manage a business in a changing market. Other capitalists reacted more intelligently to the changing market and provided competition that Calumet couldn't keep up with. Actually I think it is a failure of capitalism in that people these days buy the cheapest online and screw over the honest dealers. High streets are now increasingly half empty or worse still occupied by charity shops selling tat and payday loan sharks stolen goods. it isn't a failure at all. other sellers are offering the same product for less money, so either the stores need to cut their prices to match or they need to offer services to justify their higher prices. either way, the consumer wins. |
Calumet files Chapter 7
In article , Martin Brown
wrote: It takes _two_ willing parties to do a deal. No it doesn't. Try negotiating on price with a ticking bomb on the table and a gun held to your head, when you have toothache with a dentist, or bleeding to death with a US medic... that's not negotiation. |
Calumet files Chapter 7
On 3/24/2014 5:07 AM, Martin Brown wrote:
On 21/03/2014 04:29, Tony Cooper wrote: On Thu, 20 Mar 2014 21:30:18 -0400, Robert Coe wrote: On Fri, 21 Mar 2014 11:43:07 +1300, Eric Stevens wrote: : If the employees had notice, word would have leaked out into the wider : community and the business would have ground to a halt in a confused : shambles. They would still have been broke but their affairs would : have been in just that more of a mess. It seems to me unlikely that the employees would not have seen the writing on the wall. Bricks and mortar photo stores are a dying breed. You only have to look around inside one to see why. Smartphones have annihilated the point and shoot market, digital zapped print processing. People are in there playing with new expensive kit tying up experienced salespeople to help choose their kit and then blatantly looking on their iPhone to see which website has it for the cheapest price. The same thing that also killed Jessops and Jacobs in the UK. The former even offered to match online prices but it didn't save them(*). (*) A handful of their shops in the premium locations have reopened under new management and the same Jessops name. Translation: There wouldn't have been time for the officers to find a way to take care of themselves before the s*** hit the fan. Understand that I don't know that that's what happened in this particular case, but it IS a time-honored capitalist strategem. A method widely adopted by bankers cut from the same cloth as the infamous Fred the Shred who totally destroyed RBS requiring a massive taxpayer bailout to prevent the global banking system collapsing and still walked away with all his severance pay and pension entitlements. I disagree. Too much of the dealings at RBS was cut from whole cloth. -- PeterN |
Calumet files Chapter 7
On 3/24/2014 5:07 AM, Martin Brown wrote:
snip Actually I think it is a failure of capitalism in that people these days buy the cheapest online and screw over the honest dealers. High streets are now increasingly half empty or worse still occupied by charity shops selling tat and payday loan sharks stolen goods. I'm sure you didn't mean to imply that online dealers are less honest than brick & mortar dealers. Having said that, it's the essence of capitalism, that as economic conditions change, those who cannot adopt, fail. Yes it is indeed a harsh concept that hurts many innocents. It is also important that society have a safety net that includes retraining. -- PeterN |
Calumet files Chapter 7
On 3/24/2014 6:36 AM, Martin Brown wrote:
On 23/03/2014 00:37, Eric Stevens wrote: On Sat, 22 Mar 2014 10:38:49 -0400, Robert Coe wrote: And where is it written that even good corporations should be insulated from any form of public ownership? Corporations aren't reluctant to seek public "bailouts", willingly trading bonds or ownership stakes to get them. It takes _two_ willing parties to do a deal. No it doesn't. Try negotiating on price with a ticking bomb on the table and a gun held to your head, when you have toothache with a dentist, or bleeding to death with a US medic... The banks were "too big to fail" and as such were able to completely screw over the tapayers in a "heads we win tails you lose" scam. Which was one of the reasons banks were originally prohibited from getting into non-banking businesses. Shareholders never halt the increase the remuneration for CEOs in an unending spiral whilst simultaneously laying off workers to drive wages for the peons down. US and UK CEO to median wage ratios are obscene. In theory, I own x% of xx corporation. I, together with the other shareholders hire someone to manage the company. We are simply investors. If the manager makes money for me, I will happily pay him. Without me supplying the money and xx managing the company, there would be no company. Since management is paid based upon financial success, the Harvard B school teaching comes into play. Management makes decisions that will produce immediate profits. Money that should be set aside for future growth is not part of profits. therefore management has a built in conflict between the long term good of the company, and their pockets. It is no surprise that they all sit on each others remuneration committees and make trite claims like "we are all in it together". -- PeterN |
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