Hillary To Jeb Bush: The Problem Is CEOs, Not Their Workers

Hillary To Jeb Bush: The Problem Is CEOs, Not Their Workers

Jonathan Cohn at the Huffington Post

http://www.huffingtonpost.com/2015/07/13/hillary-clinton-campaign_n_7787420.html

"SNIP...............


But then Clinton started talking about “short-termism” -- the focus on delivering quick returns for investors, whether through dividends or corporate "buy-backs" of stock that drive up share prices. That was a little different.

The prevailing view among most business leaders and conservatives is that focusing on shareholders is ultimately good for everybody, because investors can then re-allocate resources to the most efficient companies and investments.

Clinton challenged this conventional wisdom, suggesting that the focus on short-term returns ends up extracting wealth from companies, leaving them with less money to put back into facilities or workers. That wealth extraction, Clinton argued, is one reason that income for the typical worker has stagnated, even as corporate profits and executive salaries have soared. At the same time, Clinton said, it deprives companies of the replenishing investments that would make them more productive in the future.

“Net business investment -- which includes things like factories, machines, and research labs -- has declined as a share of the economy,” Clinton said. “In recent years, some of our biggest companies have spent more than half their earnings to buy back their own stock, and another third or more to pay dividends. That doesn’t leave a lot left to raise pay or invest in the workers who made those profits possible or to make the new investments necessary to ensure a company’s future success.”



..............SNIP"