Corporate Greed - A Primer

         In a New York second, after Trump was convicted on 34 felony counts in a New York courtroom, CNN and MSNBC producers were hard at work on new content speculating on his appeal, and would it be upheld, blah, blah, blah. The legions of TV lawyers arrayed across a set are as clueless as they were about predicting the trial itself. The true value of all this is, of course, useless, but that isn’t the point, viewership is, and satisfying corporate advertisers.  It matters not a whit how disgusted you and I are, or how intellectually insulted we might be about wall-to-wall cable coverage of Trump, it draws viewers, and advertisers must reach an audience. Forget morality, social welfare, news we need to know, it is all about earning a buck and satisfying the expectations of ownership. Such is the world of a market economy, and corporate greed in the sphere of public companies.. 

The term ‘free market’ is easily tossed around, but that is a misnomer because economies exist within a regulatory framework. And that framework permits corporate greed in spades. Of necessity. Meanwhile well-meaning individuals, and like-minded groups push back, usually to little avail.  Here’s why: There are two fundamental categories of business, private and public. Private business organizations are owned by one or more individuals and those principals make the decisions. If they don’t want the moon, they don’t have to try.

Successful ones, which wish to grow and prosper, get new financial capital for that growth organically (earned income), by borrowing from a lender, or by bringing in new partners. Good companies with great ideas often outgrow those sources to continue growth and make the decision to go ‘public’. After meeting stringent requirements and accounting methods, these businesses hire investment bankers to take them public. That is essentially raising new capital by issuing shares of ownership to new investors, and importantly creating a board of directors if one does not exist. This major change in strategy results in shifting the focus on future performance to the demands of these many new owners, which must be met - or else.

         Do you have an IRA, 401k, 403B or other retirement account, or a mutual fund, or own shares (or stock) in the company you work for?  If so, you damn well want the value of those shares to grow, don’t you? If one company doesn’t meet your demands, you can shift your money to another manager or other investments, thereby punishing the laggard by selling your shares on a stock exchange and maybe pushing the value of the underperforming shares even lower. Enough investors doing that, and the management team can get the axe – even original owners. That is the way public companies work. The bottom line for public companies then is maximizing shareholder value. Investors put there own money at risk, and rightly expect an opportunity at a return.

         Wall Street is the seat of the financial services industry in the U.S. and serves the vital function of providing buyers and sellers investment capital. It is often the punching bag for activists when there is a movement to push back against greed. I can assure you that social good is not an element of business plans. And when it comes to corporate largess for social good, it most often comes from a corporate foundation, not the operating funds of the entity.

Corporations must often exist in a highly competitive, ever changing market economy and need to do all that is legal to make every last dime to satisfy owners – of which you may be one. Otherwise an element of your future such as buying a home, educating your kids, or retiring, could be in jeopardy.

         My take on corporate America is ignore the stupid ads we are bombarded with, consider the new jobs that are created with economic growth we experience in the U.S. - unparalleled anywhere on Earth, the generation of individual wealth - which often funds our schools, colleges, pioneering health care research, and human dignity initiatives.  But, always demand corporations toe the line on their climate impact. With no excuses for the corrupt and narcissistic Trumps of the world, forget about the underbelly – greed.  The corporate glass is half full, not half empty.