au contrare, the logical thing is for them to invest in CapEx, such as buying / buidling assets to provide more efficiency. for the most part, the payoff for CapEx will be further down the road. the top executives, whose annual bonus is tied to the stock price, opt to buy back more co stock, which artificially inflates the stock price. it is very short-sighted
Cut corporate rate, increase LTCG or change qualified dividend rates. Really hate any tax cuts that weren't revenue neutral until the budget is balanced. Doing this in a good economy was just a flat disaster.
Well, wouldn't you say it more "sets us up the bomb"? I mean, the disaster will be at the next downturn where we have no wiggle room b/c we've already done massive deficit spending. It could honestly get depression like, not to get hyperbolic, but...
I disagree that being fair and sharing revenue in the form of raises that increases employee morale, might entice better employees to join a business, doesn't benefit the shareholders. Multiple businesses passing those raises to employees seeds more money into the economy which also helps the businesses and their shareholders.
Optimizing for your incentive structure sounds pretty rational to me. Both corporate execs and shareholders live quarter to quarter, so being short-sighted is the rule not the exception. As for capex, I don't believe that's right. If a company has an investment opportunity that can provide a return on capital that is better than a shareholder could find for himself out in the market with cash in his pocket, then yes they should. But companies were already investing in the best opportunities already. Interest rates are low, cash is available and cheap, and companies would have borrowed if necessary to make the strong investment cases. A lower tax burden moves downward the threshold of what a worthwhile investment is, so more of them are in the money. But, is a shareholder really better off with a company grabbing these middling opportunities, or should they reapportion that cash to other companies? Since the stock market is a wider pool of opportunity than a single company, the stock holder will often prefer getting the return. And in any case, reading the financial press when the tax reform was being debated, the prognostication that I recall was that it would mostly be turned over to shareholders. Then it happened. Behavior is pretty predictable when its rational.
it is much more rational to increase efficiency/productivity, in order to just survive in the ever-competitive business world. the poster child for co valuing more on optimizing incentive structure than increasing CapEx has been GE. It got its ass kicked BIG TIME by the digital age. on the flip side, Amazon and Netflix, by investing heavily on CapEx, has been kicking the ass of former behemoths in the business world i don't believe that you understand; see the eg for GE vs. Amazon and Netflix don't just make a claim, provide details ur lack of understanding manifests itself. au contrare, it was for higher pay to employee and more job creation (which increase CapEx would bring about)
GE was brought low. But what about their investors? I can appreciate your arguments here, but I think they are too company-centric and don't consider the priorities of a board of directors and the shareholders they represent. I do not believe the theory you've presented here that CEOs are initiating buybacks just so they can pump up their compensation. The stock market wants it, the boards will demand it, and a CEO who wants to keep his job will deliver it. Netflix and Amazon are growth stocks. Their stockholders have wanted to see delivery of topline growth because they are counting on the appreciation of the stock price to deliver a profit. That's why they are aggressive in plowing earnings back into the business. There's lots of opportunity to make high value investments. GE was a mature earnings stock. Their shareholders were in it for the dividend checks. It was a pretty safe cash cow for many, many years. Both behaviors are rational when you consider who is the decision maker and what do they want.
????? what's ur point ? it's a case of you not understanding as meaningless as "the sun comes up everyday" what makes them growth stock? they spent a lot on CapEx---gaining a competitive advantage---to improve efficiency/productivity actually, no. During its heydays, when Welch was running his co, GE was deemed a safe play on growth stock , good good value. it paid dividend, but it's the least of the consideration for investing in GE Welch's successor Immelt F'd it all up ur lack of understanding manifest itself.
Lying Media Fools! I get to supersize my meal everytime I visit McD's! That's a gift and blessing to a HARD DAY WON, and that's more of my money back! And all these America hating Commies want is to FORCE ME INTO EXPENSIVE HEALTHCARE!
It takes a particular kind of diabolical stupidity to structure a tax cut bill that decreases real wages: But once again, HE DID IT ladies and gentlemen.
Well, and look carefully at the chart. Real wages have been declining for the entire period shown. It's just a matter of how quickly we are getting screwed. Oh boy, something to root for there. "Please, please just slow down the rate at which I am losing a hold on my economic security. Oh, thank you!"
Good news for corporations... not so good for employees. Pre-Tax Corporate Profits Rise 0.2%, After-Tax Corporate Profits Rise 6.7% https://moneymaven.io/mishtalk/econ...rate-profits-rise-6-7-eINlAgCU0ESeibPHQRTGiQ/
The lies that dude has told would have gotten 44 impeached by now where are all of those people that railed on about 44's changes that were making a difference for all of American they were bad mouthing him on the regular but this *ssclown there either defending or giving him praise.His lying tax cut will help the middle class has just been a big lie.https://www.newsweek.com/trump-ceo-pay-wages-tax-cuts-1076795
Thank you. Graph makes it point but it is pretty deceptive. Shows from 2nd Q of 2016, real wages have been dropping approximately 7.7 to 8.5 percent per quarter. Looks like first Q of 2018, loss dropped to approx 9.3. No doubt bad. But chart makes it look like wages were steady or rising and then dropped of a cliff.
Oh 45 and Foxnews will try to find a way spin the numbers to make it look like the tax cuts are working when they clearly are not.
I was really going more off of B-Bob's point. One can really manipulate data/charts to show a false picture. Not arguing about the tax cuts. Lies, Damn Lies and Statistics or something like that. Lots of data being discussed in a number of threads right now. Shouldn't take superficial conclusions from them.
True we shouldn't but there are lot of data showing that the ceo's are gettng more money while the middle class joe's are getting the shaft with these cuts.https://www.newsweek.com/trump-ceo-pay-wages-tax-cuts-1076795