Our prevailing ignorance about the bias of the money we use undermines our best efforts at making the economy work better for the many or even the few. Businesses believe they are required to grow, and pick from among their inappropriate acquisition targets as if choosing between the lesser of two evils. Eighty percent of these acquisitions drain value and equity from both merging companies. Unions accept the false premise that the new competitive economy demands that they consent to lower wages; they fail to recognize that their wages are making up a progressively smaller portion of corporate profits, or that money paid to them circulates through the real economy, while the money doled out to CEOs and shareholders tends to stay put. As a result, with each cut to union wages, education and health care suffer, and the overall competitiveness of the workforce declines. Businesses, meanwhile, make decisions catering to the agenda of the investing shareholders who seek to extract short-term gains at the expense of a company’s long-term stability, research and development, or even basic competence. They outsource core processes, lose access to innovation, and depend on branding to make up the difference. Revenues suffer and growth slows, but there’s debt to be paid, so more acquisitions are made and the workforce is slashed or outsourced. All the while, central banks attempt to walk the fine line between stimulating growth through lower interest rates and maintaining the value of their monopoly currencies.
Posted on: Sat, 22 Jun 2013 16:12:21 +0000
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