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Capitalist “Greed”vs. Socialist Redistribution of Wealth '79

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Steve

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I received this from a friend..

I posted the you-tube link and the transcript.

Capitalist “Greed” vs. Socialist Redistribution of Wealth [1979]

Watch as economist Milton Freidman smacks down Donahue’s equating of capitalism with greed. If only Friedman were alive today to take Obama to school. What a debate that would be. Obama would not know what hit him, he would be left in a stuttering, stammering pile of um’s and uh’s. If only…

Milton Friedman as charming as he is brilliant. As gentle as he is razor sharp.

http://www.youtube.com/watch?v=RWsx1X8PV_A

Transcript:

Donahue: When you see around the globe the mal-distribution of wealth, the desperate plight of millions of people in underdeveloped countries, when you see so few haves and so many have-nots, when you see the greed and the concentration of power, did you ever have a moment of doubt about capitalism and whether greed’s a good idea to run on?

Friedman: Well, first of all, tell me is there some society you know that doesn’t run on greed? You think Russia doesn’t run on greed? You think China doesn’t run on greed? What is greed? Of course none of us are greedy; its only the other fellow who’s greedy.

The world runs on individuals pursuing their separate interests. The great achievements of civilization have not come from government bureaus. Einstein didn’t construct his theory under order from a bureaucrat. Henry Ford didn’t revolutionize the automobile industry that way. In the only cases in which the masses have escaped from the kind of grinding poverty you’re talking about, the only cases in recorded history are where they have had capitalism and largely free trade. If you want to know where the masses are worst off, it’s exactly in the kinds of societies that depart from that. So that the record of history is absolutely crystal clear: that there is no alternative way so far discovered of improving the lot of the ordinary people that can hold a candle to the productive activities that are unleashed by a free enterprise system.

Donahue: But it seems to reward not virtue as much as ability to manipulate the system.

Friedman: And what does reward virtue? You think the communist commissar rewards virtue? You think a Hitler rewards virtue? You think – excuse me, if you will pardon me – do you think American presidents reward virtue? Do they choose their appointees on the basis of the virtue of the people appointed or on the basis of their political clout? Is it really true that political self interest is nobler somehow than economic self interest? You know I think you are taking a lot of things for granted. Just tell me where in the world you find these angels who are going to organize society for us? Well, I don’t even trust you to do that.

Some choice Freidman quotage:

“The most important single central fact about a free market is that no exchange takes place unless both parties benefit.”

“Nobody spends somebody else’s money as carefully as he spends his own. Nobody uses somebody else’s resources as carefully as he uses his own. So if you want efficiency and effectiveness, if you want knowledge to be properly utilized, you have to do it through the means of private property.”

“Governments never learn. Only people learn.”

“So the question is, do corporate executives, provided they stay within the law, have responsibilities in their business activities other than to make as much money for their stockholders as possible? And my answer to that is, no they do not”

“The only way that has ever been discovered to have a lot of people cooperate together voluntarily is through the free market. And that’s why it’s so essential to preserving individual freedom.”

“Most economic fallacies derive – from the tendency to assume that there is a fixed pie, that one party can gain only at the expense of another.”

“Underlying most arguments against the free market is a lack of belief in freedom itself.”

“What kind of society isn’t structured on greed? The problem of social organization is how to set up an arrangement under which greed will do the least harm; capitalism is that kind of a system”

“History suggests that capitalism is a necessary condition for political freedom. Clearly it is not a sufficient condition.”

“The society that puts equality before freedom will end up with neither. The society that puts freedom before equality will end up with a great measure of both.”
 

Mike

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Friedman to Donahue: "You know I think you're taking a lot of things for granted".

Indeed.

That 1000 yard stare by Donahue is priceless. :lol:

Good video...............................................
 

TSR

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Steve said:
I received this from a friend..

I posted the you-tube link and the transcript.

Capitalist “Greed” vs. Socialist Redistribution of Wealth [1979]

Watch as economist Milton Freidman smacks down Donahue’s equating of capitalism with greed. If only Friedman were alive today to take Obama to school. What a debate that would be. Obama would not know what hit him, he would be left in a stuttering, stammering pile of um’s and uh’s. If only…

Milton Friedman as charming as he is brilliant. As gentle as he is razor sharp.

http://www.youtube.com/watch?v=RWsx1X8PV_A

Transcript:

Donahue: When you see around the globe the mal-distribution of wealth, the desperate plight of millions of people in underdeveloped countries, when you see so few haves and so many have-nots, when you see the greed and the concentration of power, did you ever have a moment of doubt about capitalism and whether greed’s a good idea to run on?

Friedman: Well, first of all, tell me is there some society you know that doesn’t run on greed? You think Russia doesn’t run on greed? You think China doesn’t run on greed? What is greed? Of course none of us are greedy; its only the other fellow who’s greedy.

The world runs on individuals pursuing their separate interests. The great achievements of civilization have not come from government bureaus. Einstein didn’t construct his theory under order from a bureaucrat. Henry Ford didn’t revolutionize the automobile industry that way. In the only cases in which the masses have escaped from the kind of grinding poverty you’re talking about, the only cases in recorded history are where they have had capitalism and largely free trade. If you want to know where the masses are worst off, it’s exactly in the kinds of societies that depart from that. So that the record of history is absolutely crystal clear: that there is no alternative way so far discovered of improving the lot of the ordinary people that can hold a candle to the productive activities that are unleashed by a free enterprise system.

Donahue: But it seems to reward not virtue as much as ability to manipulate the system.

Friedman: And what does reward virtue? You think the communist commissar rewards virtue? You think a Hitler rewards virtue? You think – excuse me, if you will pardon me – do you think American presidents reward virtue? Do they choose their appointees on the basis of the virtue of the people appointed or on the basis of their political clout? Is it really true that political self interest is nobler somehow than economic self interest? You know I think you are taking a lot of things for granted. Just tell me where in the world you find these angels who are going to organize society for us? Well, I don’t even trust you to do that.

Some choice Freidman quotage:

“The most important single central fact about a free market is that no exchange takes place unless both parties benefit.”

“Nobody spends somebody else’s money as carefully as he spends his own. Nobody uses somebody else’s resources as carefully as he uses his own. So if you want efficiency and effectiveness, if you want knowledge to be properly utilized, you have to do it through the means of private property.”

“Governments never learn. Only people learn.”

“So the question is, do corporate executives, provided they stay within the law, have responsibilities in their business activities other than to make as much money for their stockholders as possible? And my answer to that is, no they do not”

“The only way that has ever been discovered to have a lot of people cooperate together voluntarily is through the free market. And that’s why it’s so essential to preserving individual freedom.”

“Most economic fallacies derive – from the tendency to assume that there is a fixed pie, that one party can gain only at the expense of another.”

“Underlying most arguments against the free market is a lack of belief in freedom itself.”

“What kind of society isn’t structured on greed? The problem of social organization is how to set up an arrangement under which greed will do the least harm; capitalism is that kind of a system”

“History suggests that capitalism is a necessary condition for political freedom. Clearly it is not a sufficient condition.”

“The society that puts equality before freedom will end up with neither. The society that puts freedom before equality will end up with a great measure of both.”
Just my view on a couple of Friedman's propositions:
Both parties benefit--- ok so I can exert my economic influence and sell below cost if necessary, especially for a particular product(s) to run competitors out of business, and after being sucessful I can raise my prices?, now both parties benefitted, is this ok???

No, Corporate exec.s don't have any obligations except to make money for their stockholders. Key phrase "Provided they stay within the law"
 

Steve

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ok so I can exert my economic influence and sell below cost if necessary, especially for a particular product(s) to run competitors out of business, and after being sucessful I can raise my prices?,

that works only until another competitor comes in and undercuts the higher prices..

and if you successful enough to lock up the whole market and cut out the competition you would have a monopoly and that is against US law..

so either way when you are the biggest someway somehow someone will take you down..
 
A

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And folks wonder why US business can't compete- or why products are getting so expensive :???:

CEO's final payout of $100 million under fire.
By SIMONE SEBASTIAN and TOM FOWLER, HOUSTON CHRONICLE
Published 09:10 p.m., Monday, October 31, 2011


Nabors Industries is slated to pay Eugene Isenberg $100 million - more than the entire company earned in his final quarter as chief executive - and investors are crying foul.
Isenberg, consistently among Houston's highest-paid executives, stepped down Friday as head of the oil and natural gas drilling company he's run since 1987, triggering the potential $100 million termination agreement. He will remain as chairman.

The deal, crafted two years ago, entitles Isenberg to the massive final paycheck - plus outstanding stock options and awards valued at $26 million at the end of last year - in the event of his "constructive termination without cause."

"It defies logic," said Brandon Rees, deputy director for the AFL-CIO's office of investment, which owns Nabors shares. "We're baffled by what the board of directors was thinking in negotiating such an agreement for a CEO who is of retirement age. Nabors will continue to be a focus of shareholder discontent."

Isenberg, 81, received $13.5 million in total compensation last year. From 2006 to 2010, he got almost $174 million in other compensation, John Daniel, an analyst with Houston-based investment bank Simmons & Co., estimated. During that time, Nabors' stock price declined 38 percent.
"This year, that under-performance has continued," Daniel said in a note to investors Monday. Shares of Nabors, which is based in Bermuda but has its main offices in Houston, declined 72 cents to $18.33 Monday. The stock has fallen more than 20 percent this year.

Isenberg's payment would exceed Nabors' third-quarter profit of $74.3 million.

No explanation yet

The controversial payment comes as corporate executive pay is drawing scrutiny.

Nabors' investors were among the first to take advantage of a new federal rule under the Dodd-Frank Wall Street Reform Act allowing shareholders to oppose executive compensation packages with an advisory vote. Of the shares voted at the annual meeting last summer, 57 percent were cast against the pay deals.

Typically, executives receive termination pay when they are forced to leave, either because the board fires them or the company is acquired, said Chris Crawford, executive director for Longnecker & Associates, a compensation consulting firm. "Constructive termination" occurs when an executive is effectively demoted, pressuring him to resign.

Isenberg hasn't publicly explained why he stepped down. Nabors board members and executives either did not return calls or refused comment.

"It's definitely unusual to claim 'constructive termination' going from CEO to chairman, but it's way more unusual to stay on as chairman and receive termination" payment, Crawford said. "That's not a termination."

The $100 million payout will be recorded as a "contingent liability" in Nabors' year-end financial statements, the company said in a filing with the Securities and Exchange Commission. The filing doesn't detail the conditions for the payment.

$50 million for new CEO

The new chief executive, Anthony Petrello, has a similar termination deal that would award him $50 million. He served as chief operating officer under Isenberg.

While acknowledging the $100 million payment may offend some investors, Daniel said there's validity to Nabors' argument: He took the company out of bankruptcy in 1987 and turned it from a small Alaska-based drilling contractor with negative shareholder equity into a multi-national company with more than $5.6 billion in value.

"The stock price was $0.37 per share in 1987 and increased 50-fold over Mr. Isenberg's tenure," he said.

Recently, some corporate boards have reined in executive severance packages, often called "golden parachutes," said Cory Morrow, principal at Hay Group, a consulting firm. Some now include sunset clauses, ending the severance deal after an executive has led the company for several years.

"This is clearly an outlier," Morrow said of Isenberg's severance. "You can understand severance going into a bankruptcy situation, but 25 years later, is that appropriate?"

Isenberg's parting package is actually smaller than in 2007, when he was eligible for $329 million in cash. In the years since, the company cut total annual pay by more than 81 percent, according to SEC filings.

Yet, the termination payout remains well above standard, which is two to three times an executive's salary and bonus.

"If you go over three times, it starts to move out of the norm. Over five times is way outside of the norm," Crawford said. "Ten times would be a crazy number."
 

hypocritexposer

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Oldtimer said:
And folks wonder why US business can't compete- or why products are getting so expensive :???:

CEO's final payout of $100 million under fire.
By SIMONE SEBASTIAN and TOM FOWLER, HOUSTON CHRONICLE
Published 09:10 p.m., Monday, October 31, 2011


Nabors' investors were among the first to take advantage of a new federal rule under the Dodd-Frank Wall Street Reform Act allowing shareholders to oppose executive compensation packages with an advisory vote. Of the shares voted at the annual meeting last summer, 57 percent were cast against the pay deals.


Hopefully the American Taxpayer (shareholder) will also decide to oppose the executive compensation that the US government CEO is dishing out.....

And folks wonder why the US government is dysfunctional - or why taxes are getting so expensive



A Republican senator is calling on President Obama to cancel the $12.8 million in bonuses that were approved for 10 executives at the government-seized mortgage giants Fannie Mae and Freddie Mac that received a $170 billion taxpayer-funded bailout.

Read more: http://www.foxnews.com/politics/2011/11/01/republican-senator-calls-on-obama-to-cancel-fannie-mae-freddie-mac-bonuses/#ixzz1cYvsCFkx
 

Steve

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I doubt there is anyone who would defend obnoxious CEO payouts,.. anymore then a person would defend obnoxious congressional raises..

and while congressional raises pale in comparison to the CEO payouts, they were far more then congress allotted our seniors..

I am glad the Dodd/Frank bill has at least one redeeming feature.

executive payouts in the US are often far beyond world averages.. CEO payouts should be linked to corporate profits and stock prices similar to other executive bonuses.. and anything beyond a simple formula that exceeds world averages should trigger a stockholder vote..
 

tumbleweed_texn

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Steve said:
I doubt there is anyone who would defend obnoxious CEO payouts,.. anymore then a person would defend obnoxious congressional raises..

We have a right to be upset and complain about congressional pay raises and benefits. We are shareholder, so to speak. We have a genuine stake in what they do. Their actions have a direct impact on us and it is our money they are using.

Corporate CEO's on the other hand are being paid by shareholders. Unless we are shareholders, what right do we have to complain about what they decide to pay their CEO? We may not agree with their business practices, but unlike laws that congress passes, we have the right to not buy that company's product.

Yes it is assinine and seems like corporate greed. Noone could possibly need that much money to live, but it isnt our business. What if it was us as ranchers being demonized in the media for these practices? And one day it will be. This is how they get started. They find something we can all agree to think is wrong and hate. Say for instance that you tell your family that you will all take an extravagant(for you) cruise this year if you get a good price for your calves. You have worked hard and slowly paid things off around the ranch and this will be your first family vacation in years. Now on the flip side, you have a welfare leech who doesnt have enough on his/her EBT card after buying junkfood and needless items to afford a roast for Sunday dinner or even hamburger. They see that you as a producer can afford to take the whole family on a cruise, but yet they cant even afford the cheapest cut off of the product you produce and sell. They dont care about years of sacrifice by you and your family, working hard doing without to pay for necessities. They dont take into account the other people dealing with that beef after you have sold it. They just see you, the beef producer, selling a product they cant afford and taking a vacation they can only dream of. Next they tell their friends and neighbors of this injustice. Then those people tell their congressman about you charging so much for your product that you can live high on the hog when they cant even feed their family a good nutritious meal. "Well that needs fixed", the lawmaker says. Then it's you and your friends and neighbors being villified in the media. "It isnt right that food producers have to charge so much for products that each and everyone of us cant live without. We need the government to step in and regulate the ag industry". This will be the media's slant on it. Just as it is now with corporate CEO's. Do we want this? I sure as hell dont.

If these companies keep paying these outragious wages to their CEO's they will eventually go broke. They will have to pass on to their consumers these high prices and the buyer will inevitably find the same product priced lower elsewhere. Multimillion dollar payouts are virtually unsustainable. The thing is though, unless a person has a vested interest in that company, it isnt our business. They will start with what is percieved as the most evil, the ones that dont have much of an impact on most citizens and they will tell us how wrong this is and how the government should fix this. Then they will go on to the next and the next on down the line. How long do you think it will take them to get to the ag industry and the one thing we all need, which is food?

Dont you think we have enough government regulation and oversight in our business and way of life?

If a person doesnt think that all of this hoopla about CEO pay will eventually lead to the farm and ranch, they are dangerously naive.

If a person doesnt like the pay rate or business practices of a certain company they have the right to either not buy their products or they can buy enough stocks in that company to have some decision making influence. But unless we have money invested, we dont have the right to tell them that what they decide to pay someone is wrong.

If we are to have a free market society, it has to be for everyone. Not just those we decide that we like their business practices.
 

Steve

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Corporate CEO's on the other hand are being paid by shareholders. Unless we are shareholders, what right do we have to complain about what they decide to pay their CEO? We may not agree with their business practices, but unlike laws that congress passes, we have the right to not buy that company's product.

our "laws" have helped corporation by not taxing income in retirement funds and other stock invested savings funds.


this makes most Americans "StockOwners" unfortunately those same investors have little say in how their tax-free income is invested, creating a situation where CEOs are no-longer as beholden to the investor as in the past..

on any given day up to ten percent of each employee is not taxed..

so I would say that corporations are getting a slice of the cake... and CEOs are eating the cake..

so yes common sense limits should be placed on corporations.. in this one it puts more power in the stockholders hands and less in the board to screw them with obnoxious payouts..

and yes I do hold stock, and I do vote on these issues. but in all my years of investing and voting against current boards ect.. it has never had any effect on CEO pay..
 

Steve

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Dont you think we have enough government regulation and oversight in our business and way of life?

yes we have plenty of regulations.. but as anyone with a bit of smarts knows.. quantity seldom conveys to quality..

this one part of the bill is a good regulation..

it gives stockholders a vote on CEO pay-issues so the corporations do not go broke, as the executives raid the safe on the way out the door...

it isn't government telling stockholders/corporations what to do but it does give them a voice in corporations they own..

as for the ranch.. if you have a good year and go on a cruise, I would say have a great time, might even offer to feed the cattle if you needed..
:D

but the example would be more like this:

but if I owned a quarter of the ranch, and it was a bad year, and you decided to quit, and sell all the bulls, cows, calves and tractors to pay for a cruise, cause you thought it was deserved, after all you did work the ranch for a few years and one was a good year way back when, then I would be a little pe-od.. :mad:
 

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If a person owns stock in a company, yet feels their voice isnt being herd by the board, they have the option of selling those stocks and buying into.a company that operates more to their liking.

If a person is paid an insane amount of money that goes into a nontaxed retirement of some sort is not anymore guilty of the common worker who takes advantage of an IRA or 401K. We all have those same options and choices. How is an overpaid CEO who takes advantage of tax free retirement accounts any different than the farmer or rancher who takes advantage of federal subsidies or disaster relief? If we go along with your line of thinking on this Steve then someone just might come along and say that the avg US citizen has a vested interest and is in effect a stockholder in your ranching operations. You are making my points for me Steve.

You brought up that we as citizens should be concerned over the insanely paid CEO's in corporations the government owns. Ive said it before but it bears repeating, the US government has no business in business. The duties of the government are laid out in the Constitution and I dont remember ever reading where it spoke of governmental duties in corporations. That is for the private sector.
 

Steve

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tumbleweed_texn said:
If a person owns stock in a company, yet feels their voice isnt being herd by the board, they have the option of selling those stocks and buying into.a company that operates more to their liking.

If a person is paid an insane amount of money that goes into a nontaxed retirement of some sort is not anymore guilty of the common worker who takes advantage of an IRA or 401K. We all have those same options and choices. How is an overpaid CEO who takes advantage of tax free retirement accounts any different than the farmer or rancher who takes advantage of federal subsidies or disaster relief? If we go along with your line of thinking on this Steve then someone just might come along and say that the avg US citizen has a vested interest and is in effect a stockholder in your ranching operations. You are making my points for me Steve.

You brought up that we as citizens should be concerned over the insanely paid CEO's in corporations the government owns. Ive said it before but it bears repeating, the US government has no business in business. The duties of the government are laid out in the Constitution and I dont remember ever reading where it spoke of governmental duties in corporations. That is for the private sector.

your looking at it from the wrong side, the money that goes into retirement IRA's 401s ect goes to buy stock.. enabling corporations to have access to a larger pool of money from funds with little to no voice in how the stocks are bought and sold..

if the government had not "interfered" by offering this tax-free option our corporations would have a much smaller pot of gold.

and up to ten percent of the US wages is one huge pot that corporations would struggle without.. but it comes at a price to investors, that have NO say in how it is invested,..

so by forgoing the taxes on the ten percent and setting up the legislation that enables these funds,.. the government has a responsibility to have smart regulations to protect investors.
 

tumbleweed_texn

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I dont believe Im.looking at it from the wrong side. I think that too many people are not taking notice of the 800 pound gorilla in the room. Instead of raising hell about some overpaid CEO, would it not be better to get the government out of businesses business? If we did away with the tax free incentives and funds that companies use to generate more business, if we did away with corporate subsidies, wouldnt the overpaid CEO problem solve itself? By doing away with subsidies, incentives and bailouts, companies would have to go back to the 'Survival of the Fittest" theory. Overpaid CEO's wouldnt even be an issue.

When the government has a stake in your business you are that much closer to relinquishing control to them.

I dont care who makes what. I care about the government spending money and bailing people.and companies out for making bad decisions.
 

TSR

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Steve, you and I have debated,perhaps disagreed many times, but you are on target with those posts. Why can't stockholders have a vote?? Also each stockholder should be notified that their vote will determine the CEO pay, as a matter of fact the envelope sent to stockholders should be labeled CEO pay vote or something similar. Of course it could get complicated with very diverse portfolios but I think it could be done and should be done. I realize I'm simplifying things but with today's technology it could happen.
 

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TSR said:
Steve, you and I have debated,perhaps disagreed many times, but you are on target with those posts. Why can't stockholders have a vote?? Also each stockholder should be notified that their vote will determine the CEO pay, as a matter of fact the envelope sent to stockholders should be labeled CEO pay vote or something similar. Of course it could get complicated with very diverse portfolios but I think it could be done and should be done. I realize I'm simplifying things but with today's technology it could happen.

Mutual Funds are the biggest investor in the stock market now. The individual investors/owners can't vote in corporate decisions because they don't actually own a share....................

They own an interest in a bunch of shares. And THAT is a problem...........

The Fund Manager votes for them.................
 

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