…not everyone is happy with Costco’s business strategy. Some Wall Street analysts assert that Mr. Sinegal is overly generous not only to Costco’s customers but to its workers as well.
Costco’s average pay, for example, is $17 an hour, 42 percent higher than its fiercest rival, Sam’s Club. And Costco’s health plan makes those at many other retailers look Scroogish. One analyst, Bill Dreher of Deutsche Bank, complained last year that at Costco “it’s better to be an employee or a customer than a shareholder.”
God forbid there’s a large company that actually seems to be taking care of its employees. God forbid there’s a company who isn’t squeezing every last bit of life, and productivity out of its employees just so shareholders can make few more bucks. Who are these shareholders? Michael Lind has the answer:
Most publicly traded companies have shares that are bought and sold constantly on behalf of millions of passive investors by mutual funds and other intermediates. Some shareholders invest in a company for the long term; many others allow their shares to be bought and sold quickly by computer software programs. Unable to identify what particular shareholders want, CEOs with the encouragement of Wall Street have treated short-term earnings as a reliable proxy for shareholder value.
That last line is an important one. It’s exactly why Wall Street analyst, Emme Kozloff, thinks Costco CEO, Jim Sinegal:
“…has been too benevolent,”…”He’s right that a happy employee is a productive long-term employee, but he could force employees to pick up a little more of the burden.
Yes. That’s exactly what we need more of in this country, service industry workers picking up more of the burden for companies with billions in revenue. Why? The shareholders. Who could possibly be more important?
You might wonder I’m writing focusing on an article from 2005. I really wanted to highlight the kind of sacrifice that many on Wall Street (and their sycophants in the Senate & House) support. In their eyes, working people need to give up things, gifts the right-wing might call them. Meanwhile, rich people? They don’t have to give up shit. In fact if we don’t give them more shit, they won’t work. They won’t be the “makers” or “job creators” that they are so adamantly convinced they are. Right. If you believe that, I’ve got some pre-election polling that proves Mitt Romney should have won. These people won’t stop “working.” They are the walking, talking epitome of C.R.E.A.M. That picture of Mitt Romney & his boys at Bain with money everywhere? An outtake from that Wu-Tang video. They live to make money, and if some working stiff has to make a few less bucks or have shitty or no insurance so that people like Mitt Romney can make a few more bucks so be it. That’s America, that’s capitalism. Specifically that’s shareholder capitalism as Michael Lind put it. If they really stop working, trust me when I say it’s not big loss, they’re probably too stupid to be in business anyway.
CEOs need to make sure their employees get crumbs, and nothing more. Sometimes even crumbs are just too good for them. The CEOs themselves? They should get the whole slice of bread. Unless they don’t want the crust, that they can feed to the dogs strapped to the roof of their cars. This is the world according to Mitt Romney, Paul Ryan, Mitch McConnell, John Boehner & Wall Street “analysts.” They cry, and moan about having to pay a few percentage points more of marginal income tax, but they support sacrifice from everyone else. Fuck that. Yes they will whine heavily about the tax increase, but then they’ll remember they’re rich & get over it. They’ll go back to making up more nonsensical ways to make money. Some other way to scam a whole bunch of people, and then scurry away with a nice severance package before any realizes the great damage that’s been done.
Jim Sinegal said he was trying to have a sustainable company that will be around for many decades to come, but the “Street” doesn’t want to hear that:
“On Wall Street, they’re in the business of making money between now and next Thursday,” he said. “I don’t say that with any bitterness, but we can’t take that view. We want to build a company that will still be here 50 and 60 years from now.”
Bingo. I could not agree more. These people don’t do “in 10 years.” They can barely think past the next financial quarter. Meanwhile shareholder capitalism isn’t great at its main purpose. Again, Michael Lind:
Shareholder value capitalism in the U.S. since the 1980s has even failed in its primary purpose — maximizing the growth in shareholder value. As Roger Martin, dean of the Rotman Business School at the University of Toronto points out in a recent Harvard Business Review article, between 1933 and 1976 shareholders of American companies earned higher returns — 7.6 percent — than they have done in the age of shareholder value from 1977 to 2008 — 5.9 percent a year.
Even that scumbag, Jack Welch thinks it’s stupid:
For his part, Jack Welch has renounced the idea with which he was long associated. In a March 2009 interview with the Financial Times, the former head of GE said: “Strictly speaking, shareholder value is the dumbest idea in the world.”
So why do persist with this “stupid” idea? Greed. That, and the idea that’s seems to be pervasive among many right-wingers: If you’re not rich, it’s because you don’t deserve to be. Something is wrong with you. Not the way we do thing here, in America. But it’s you, your own fault, and society has had no hand in that. It’s one of the reason they hate Obama, he doesn’t subscribe to that world view. He thinks we’re all in this together. He thinks Americans should look out for one another. Especially those who are the worst off & the able to do it for themselves. They don’t like that one bit. Don’t you know that’s socialism? Bailing out the financial industry? Capitalism. Helping the poor, working poor & working class? Socialism. See how that works?
I’m ready for Obama to take the GOP, and all these fat cats (my apologies to actual fat cats) right up to edge the fiscal “cliff“, shove them off & toss a boulder off right after ‘em. Like Wile E. Coyote, they’ll be back, but this will be more than worth it.
(All emphasis in this post is mine.)Tags: crooks+liars, Investing, rabid capitalism, Wal-Mart, Wall Street