The Mudcat Café TM
Thread #105695 Message #2182840
Posted By: Little Hawk
30-Oct-07 - 03:33 PM
Thread Name: BS: Our new Constitution and new Pentagon
Subject: RE: BS: Our new Constitution and new Pentagon
There are different types of shares, Teribus...
Preferred Shares and Common Shares. The Preferred Shares are usually issued to a small group of original investors who set up the company, appoint a Board of Directors from amongst themselves, and then issue a great number of Common Shares which are sold to the ordinary public...people such as you and me.
The ordinary public buys those shares in hopes that their investment will appreciate. The original investors, who are probably sitting on the Board, happily take the public's money and use it to finance the company's activities...and pay themselves a nice big salary as well.
On the higher corporate levels, those Board members are normally exceedingly wealthy men who already have their money in a number of different corporate endeavours, and they move that money around.
The ordinary public who have invested by buying Common Shares usually know very little about what is happening with corporate policy...mainly because they are busy with other matters, like their daily lives, their jobs, survival, the usual stuff. Accordingly, they trust the business pros in the Board to manage things for them...and they will not get upset if the value of their shares does not decline. Their input into corporate policy is normally ZILCH (nada) (nonexistent).
Now and then there is an election for a new Board of Directors. If you're a small shareholder, you may get a form letter in the mail advising you that you have the privilege to vote for the Board on such and such a date, time, and place...or you can send in your vote by mail. Since you don't know personally know anyone on the Board or who might soon be on the Board, you have little if anything to go on to make a voting decision...so what happens when most people get those form letters? Nothing. They do not go to the meeting. They do not vote. If they did go, they wouldn't know who to vote FOR. They would all have to actually know each other AND know the people nominated to serve on the Board to be in any position to be empowered to have a meaningful influence on who serves on the Board and what the Board does. You cannot vote effectively when you're out of the loop and don't know how to vote or for whom.
And most of them know little or nothing about it. So their influence on corporate policy, like the influence of ordinary voters on government policy is theoretically there in a potential sense, of course, but it never actually happens in reality.
What happens is that a group of corporate pros and insiders come to the election of the Board, they elect the people who THEY picked ahead of time to serve on the Board, and corporate policy remains in the hands of the insiders who are at the top of the corporation and always will be...aside from infighting, of course, amongst those very insiders...which happens a lot.
And that's reality, in almost every case.
That is essentially what happens in our party politics and our political elections as well. They are run by the insiders, for the insiders, and the public rubber stamps whichever insiders the system puts in front of them at election time. They choose Tweedeldum, Tweedledee, or Tweedledawk...all of whom have been picked by the insiders from among the insiders. The public does NOT have the real power, because the public is too disunited and uninformed and out of the loop to be ABLE to have the real power. 50,000 or 50 millions owners of something (a corporation or a nation) CANNOT work together effectively and CONTROL what they own, if they can't communicate with each other and figure out what the hell is going on.
And that's what the insiders depend on. The guys at the top. The politicians and corporate Board members. They don't fear the public, because the public has been rendered ignorant, disunited, and impotent. The only thing the insiders must fear, generally speaking, is competition from their fellow insiders.
Money serves money. And it goes around in a closed loop, run by those who already HAVE the most money. This is true in politics. It is true in corporate management too....Hollywood feelgood movies about working class heroes who challenge the system notwithstanding...
If I buy shares, Teribus, I am lending my money to an artificial entity called a "coroporation" on a calculated risk that I will get more money back some day. If I buy government bonds, I'm doing the same thing on a national scale. Who then has the power? Me, or the executives of the corporation or government I lent my money to? They have the power, because THEY HAVE MY money in their hands, and they will use it exactly as they see fit. They may even cause the corporation to go into receivership in order to create a tax loss against some bigger thing they're doing elsewhere. They may take the country to war. If so, I and the other shareholders are screwed. They have the power. We take the risk. They reap the main rewards. We get the crumbs that are swept off the table after they have eaten.