This radical solution would end America's fiasco

Source: Raw Story · Bias: Far Left

Summary

Friends,Warner Bros. Discovery shareholders voted last Thursday on the Ellison family’s purchase of the company. Some 1.743 billion shares were cast in favor of the sale; 16.3 million were cast against it, a ratio of roughly 99 to 1.1. Great for a Handful of Super-Wealthy, but Bad for Workers and Bad for AmericaThis vote came soon after more than 4,000 workers in the media industry — directors, screenwriters, producers, actors, editors, cinematographers, musicians, and composers — signed a letter predicting an industry disaster if the sale went through.That’s because, as my friend Harold Meyerson from The American Prospect has noted, such deals typically saddle the purchased companies with gigantic debts that buyers incur to make the deal — in the case of Warner Bros. Discovery, $79 billion — and this debt, in turn, requires that buyers slash costs (especially payrolls) to pay off some of it.More than 70 percent of all the shares in Warner Bros. Discovery are held by institutional investors — including the Vanguard Group, BlackRock, and State Street. These institutions voted for the sale because they believe it will make their shares more valuable.The sale will also make certain individuals a lot of money. David Zaslav, the CEO of Warner Bros. Discovery, stands to collect some $886 million for shepherding it, in addition to his regular pay package (which was $51 million in 2024). Oracle’s Larry Ellison and his son, David, the new owners of Warner Bros. Discovery, are already among the richest people in the world.But what about the workers in the industry who’ll lose their jobs as a result of the sale? What about all the people whose wages will be slashed? What about Los Angeles, which may lose a sizable portion of its major industry?And what about the concentration of so much of the news business — so much of what Americans learn about what’s happening — under these two Trump suck-ups?If Trump’s Justice Department approves the deal (do birds fly?), CBS News and CNN — along with CBS entertainment (home to Stephen Colbert, whose contract is about to run out and who will be taken off the air because of his criticisms of Trump) and Comedy Central (home to Jon Stewart) and HBO (John Oliver) and TikTok (where 1 out of 5 Americans now get their news) — are all about to become one giant mega-media monopoly under the control of Trump allies, the Ellisons.2. The Moral Bankruptcy of Shareholder CapitalismAt the heart of modern American capitalism is the assumption that a corporation exists for only one purpose: to make its shares more valuable.That goal trumps (excuse me) all other goals — such as raising workers’ wages, improving workers’ job security, creating more jobs, enhancing the quality of life for the community where a company is headquartered or does business, making life better for the inhabitants of the nation and the world, even protecting democracy.In fact, if shareholders can make more money by shafting these other “stakeholders” and destroying these other values, that’s thought to be perfectly fine. It’s simply the way “impersonal market forces” work. It’s “efficient.”Before the 1980s, American capitalism ran on a very different principle: that large corporations had responsibilities to all their stakeholders. “The job of management,” proclaimed Frank Abrams, chairman of Standard Oil of New Jersey, in a 1951 address, “is to maintain an equitable and working balance among the claims of the various directly affected interest groups … stockholders, employees, customers, and the public at large.”The sentiment may seem quaint or inauthentic today, but in the three decades after World War II, it laid the basis for rapid economic growth and, with strong unions, an equally rapid expansion of the American middle class.It reflected the sincere views of corporate executives. Many had endured the Great Depression and the war and felt some responsibility for America’s future well-being. These views helped legitimize the role of the large corporation in the public’s mind.Today, shareholder capitalism has replaced stakeholder capitalism — and most Americans are excluded from its benefits.Over 92 percent of the value of all the shares of stock owned by Americans is owned by the richest 10 percent. More than half is owned by the richest 1 percent. And even they have turned over their votes to giant institutions like Vanguard, BlackRock, and State Street, which have no concern for the well-being of anyone or anything other than the short-term value of the shares they buy or sell.We are witnessing the logical ending point of shareholder capitalism.As the share values of America’s biggest corporations continue to soar — even as (and in many cases, because) they eliminate tens of thousands of jobs — the goal of “maximizing shareholder returns” is revealing itself to be morally bankrupt and economically rotten.And as Artificial Intelligence takes over a growing amount of the work Americans do, the gap between share values...

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This radical solution would end America's fiasco
Raw Story

This radical solution would end America's fiasco

Far Left

Friends,Warner Bros. Discovery shareholders voted last Thursday on the Ellison family’s purchase of the company. Some 1.743 billion shares were cast in favor of the sale; 16.3 million were cast against it, a ratio of roughly 99 to 1.1. Great for a Handful of Super-Wealthy, but Bad for Workers and Bad for AmericaThis vote came soon after more than 4,000 workers in the media industry — directors, screenwriters, producers, actors, editors, cinematographers, musicians, and composers — signed a letter predicting an industry disaster if the sale went through.That’s because, as my friend Harold Meyerson from The American Prospect has noted, such deals typically saddle the purchased companies with gigantic debts that buyers incur to make the deal — in the case of Warner Bros. Discovery, $79 billion — and this debt, in turn, requires that buyers slash costs (especially payrolls) to pay off some of it.More than 70 percent of all the shares in Warner Bros. Discovery are held by institutional investors — including the Vanguard Group, BlackRock, and State Street. These institutions voted for the sale because they believe it will make their shares more valuable.The sale will also make certain individuals a lot of money. David Zaslav, the CEO of Warner Bros. Discovery, stands to collect some $886 million for shepherding it, in addition to his regular pay package (which was $51 million in 2024). Oracle’s Larry Ellison and his son, David, the new owners of Warner Bros. Discovery, are already among the richest people in the world.But what about the workers in the industry who’ll lose their jobs as a result of the sale? What about all the people whose wages will be slashed? What about Los Angeles, which may lose a sizable portion of its major industry?And what about the concentration of so much of the news business — so much of what Americans learn about what’s happening — under these two Trump suck-ups?If Trump’s Justice Department approves the deal (do birds fly?), CBS News and CNN — along with CBS entertainment (home to Stephen Colbert, whose contract is about to run out and who will be taken off the air because of his criticisms of Trump) and Comedy Central (home to Jon Stewart) and HBO (John Oliver) and TikTok (where 1 out of 5 Americans now get their news) — are all about to become one giant mega-media monopoly under the control of Trump allies, the Ellisons.2. The Moral Bankruptcy of Shareholder CapitalismAt the heart of modern American capitalism is the assumption that a corporation exists for only one purpose: to make its shares more valuable.That goal trumps (excuse me) all other goals — such as raising workers’ wages, improving workers’ job security, creating more jobs, enhancing the quality of life for the community where a company is headquartered or does business, making life better for the inhabitants of the nation and the world, even protecting democracy.In fact, if shareholders can make more money by shafting these other “stakeholders” and destroying these other values, that’s thought to be perfectly fine. It’s simply the way “impersonal market forces” work. It’s “efficient.”Before the 1980s, American capitalism ran on a very different principle: that large corporations had responsibilities to all their stakeholders. “The job of management,” proclaimed Frank Abrams, chairman of Standard Oil of New Jersey, in a 1951 address, “is to maintain an equitable and working balance among the claims of the various directly affected interest groups … stockholders, employees, customers, and the public at large.”The sentiment may seem quaint or inauthentic today, but in the three decades after World War II, it laid the basis for rapid economic growth and, with strong unions, an equally rapid expansion of the American middle class.It reflected the sincere views of corporate executives. Many had endured the Great Depression and the war and felt some responsibility for America’s future well-being. These views helped legitimize the role of the large corporation in the public’s mind.Today, shareholder capitalism has replaced stakeholder capitalism — and most Americans are excluded from its benefits.Over 92 percent of the value of all the shares of stock owned by Americans is owned by the richest 10 percent. More than half is owned by the richest 1 percent. And even they have turned over their votes to giant institutions like Vanguard, BlackRock, and State Street, which have no concern for the well-being of anyone or anything other than the short-term value of the shares they buy or sell.We are witnessing the logical ending point of shareholder capitalism.As the share values of America’s biggest corporations continue to soar — even as (and in many cases, because) they eliminate tens of thousands of jobs — the goal of “maximizing shareholder returns” is revealing itself to be morally bankrupt and economically rotten.And as Artificial Intelligence takes over a growing amount of the work Americans do, the gap between share values...

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