^ winners — but the company won, too, defeating the stock speculators who pushed the firm to this brink
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Yesterday came the news most of us have been waiting to hear : Verizon and its employees have agreed to a deal — in principle. If the terms published online hold true, this deal is a big one in every way. It establishes the following agreements:
1.Verizon Wireless employees are granted full authority to form a union.
2.Verizon employees not only will not see their jobs eliminated and outsourced to India, they will in fact be strengthened with higher wages ad full benefits uncut and not subject to a 30 year accrual limit.
3.perhaps most importantly, Verizon, by agreeing to these terms, admits that stock speculators pressuring the firm to “maximize shareholder value” quickly do NOT have first call on the company’s structure and employment decisions.
Publicly traded enterprises cannot allow speculators to pirate the company to their own ends. It isn’t much benefit to a company to offer its stock to the public if the eventual result is seeing huge pools of quick action money wresting the value of such companies into their nets. Capitalism was never intended to be speculation. Capital is given the freedoms we accord it because entrepreneurs need capital in order to bring their ideas to market, for everyone’s good, including the workers who create, produce, market and serve entrepreneurial ideas. Verizon has now explicitly recognized this vital principle. Its agreement is a capitalist one.
You can read the agreement here, as reported so far : http://www.nytimes.com/2016/05/28/business/verizon-strike-unions-accord.html?_r=0
That stock speculators have diverted the nation’s entrepreneurial assets to their own purposes solely, to the detriment of all else about our capitalist economy, is hardly a new story. Corporate “raiders” have been raiding capitalist assets for thirty years at least. To date, nothing serious has been done, by way of major legislation, to block, or impede, speculative arrogance. I have written several editorials in this blog suggesting legislation to push speculation back, but so far few opinion makers have taken up my ideas. That is OK if firms begin to do what Verizon has now done.
The problem is that it took a union — a solidly led, determined, deeply embedded union — to force Verizon to a capitalist decision. Publicly traded companies that don ‘t have a strong union within them lack this defense. Perhaps it is time for policy makers to encourage union formation at big corporations : first, to give employees a stronger voice in making major economic decisions affecting them, but second, to give the company itself a stronger hand in pushing speculators back. Few speculators will put up their impatient pools of money if they see the money being held hostage to other forces, at long time frames.
Perhaps, too, if publicly traded firms can put a union or two in place, and thereby commit some economic power to their employees — as well as said employees staying on the job for a long time — they will force impatient money pools out of the hurry game altogether. Capital investment rarely produces its optimum in a hurry. It takes time for an enterprise to organize, to grow, to mature its market. But why is this bad ? Anybody who invests money in stocks finds out pretty soon that the biggest gains come to those who invest for the long term. Look at warren Buffett : the $ 1 million that he invested SIXTY years ago (!) in Berkshire hathaway is now worth some $ 62 BILLION. There aren’t ANY speculator money pools that make anything like that level of gain.
Speculators know this; but the wealthy individuals who entrust huge money to speculator firms want quick action. It may not be a 62,000 percent return; but if a speculator can make 50 percent on his money in a year, he is a very happy money pooler, sure to attract many more billions of hurry-up dollars into his corporate cannibalism and thereby increase his “management fee” exponentially.
That is the rapid greed that capitalism is up against. Absent major Federal reforms — which are not likely to happen in our lifetime — the only power available to stop it is corporate managements willing to see their employees become stronger, organized, and in charge of the arena that speculators want to sell out.
—- Mike Freedberg / Here ad Sphere