Archive for Wealthy

Welfare for the Wealthy

Posted in Economics, Economy, Politics, Work, Writing with tags , , , , , , , , , , on April 10, 2012 by urbannight

I work for a business that likes the throw the word ‘shareholds’ around all the time.  This drives me absolutely batty.  To me, shareholders are the biggest leach on a company’s resources and it is just a form of welfare for the wealthy.  And I’ll explain why I see it this way.

Once upon a time, before Wall Street existed, a ‘shareholder’ purchased shares in a venture.  Usually a ship.  Often for a particular voyage.  The money went to help outfit the ship for the journey and to purchasing cargo.  The ship returned and sold the cargo for a profit and the money went to the shareholders.  It was a one time shot sort of thing.  If you were happy with the results you had the opportunity to invest in the next trip. 

Later on, if a private business needed an influx of money, the owner could break it up into shares, keeping a majority to keep control, and selling the rest.  People could then buy into the company, producing the cash flow needed at that time, and the company would pay returns out.  Kind of like repaying a loan. Only for longer.

Now days, you buy shares of stock and you are putting a small amount of money into a company.  It seems to have very little to do with needing a quick influx of money.  You then get your ‘share’ which kind of makes you a mini-owner in the company.  Now you sit back and get returns on your shares.  So the company has to keep paying the shareholders back.  Eventually, far in excess of the money they put into the company.  The shareholders want profit course.  As they want more and more money, the company has to focus more on paying people who do nothing for the company and just sit around with hands held out saying, “Give me, Give me, Give me.”  This is money that doesn’t really ever go back into the company unless a shareholder decides to buy another share.  And they only do that so they can get higher returns.

I don’t see any real difference between share holders and people on welfare other than share holders start out with the money to buy the shares in the first place.  Then they want to get lots more money back without having to do anything. 

This is why I like to call it welfare for the wealthy.  This is why our economic model is starting to fail.  There is only so much money in the world and it keeps getting tied up at the highest levels.  Trickle down economics doesn’t exist because not enough trickles down.  As more money gets tied up in share holders’ banks or in other ‘investments’, there is less money to put back into businesses.  Therefore, cost of living wage increases do not match the actual early inflation levels so most people are getting poorer and poorer. 

I know this is a bit of an oversimplification of the flaws of our economic system.  But I still think it is a valid viewpoint and I still think ‘shareholders’ are the biggest leach on our economy and they are just people looking for a return for doing nothing.

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