Gregory Peck in Other Peoples Money

[Junkdrawer]

Run time: 04:32 https://www.youtube.com/watch?v=xJRhrow3Jws   Posted on YouTube: May 18, 2009 By YouTube Member: barnseyoz Views on YouTube: 7403   Posted on DU: December 18, 2010 By DU Member: Junkdrawer Views on DU: 350

 
As we contemplate the Fall of America, let's take a moment and reflect on how we got here: Wall Street's obsession with Maximizing Short-Term Profits at All Cost.

[proud patriot]

1. I love that movie

[JHB]

2. Let's also reflect on how Wall Street's obsession came about...

Deregulation and changes in the tax laws that let "mergermania" and the sort of paper-shuffling buy-outs like the one depicted happen.

The high marginal tax rates from WW2 until Reagan promoted building and development: squeezing for every last buck right away wasn't so attractive when Uncle Sam was going to take 70-91% of it, so building longer-term share value (which included assets and a trained, reliable work force) was an important aspect building wealth without having it taxed away. You'd have to pay capital gains when you'd cah in thoe shares, but you rarely did that all at once.

With Reagan's high-end tax cuts, liquidity and speculation were a lot more profitable. For institutional inverstors and mutual funds, it was much easier to flip money back and forth to whover had the best quarterly reports. For financial wheeler-dealers, it was a chance to liquidate all the assets built up in previous decades and shovel as much as possible into their own pockets. To the extent they couldn't dodge taxes, they became just the cost of doing business (and often enough, they could dodge a lot).

All that nasty regulation and taxes is what kept them connected to the real economy. Withaout that, it's all numbers to them, and the one with the biggest numbers is the winner.

[Bucky]

3. Danny DeVito's speech in favor of liquidating the company is also impressive

http://www.youtube.com/watch?v=MfL7STmWZ1c