Tuesday, June 26, 2012

The Truth about the Economy: In the 1980s, Greed WAS Good... Then We Went Overboard




Henry Blodget writes: The movie "Wall Street" was made in 1987, which means that it was likely written in the mid-1980s.

And guess what?  In the economy in which Gordon Gekko was operating--the economy of the early 1980s--Gordon Gekko was right.  Greed was good. U.S. corporations had become too much of a feeding trough for their senior executives--at the expense of their shareholders. The American economy did need to be kicked into shape. And the aggressive takeovers and restructurings and "greed" that emerged from that era were actually an effective way to do that.

But there's a time and place for everything.

And what was true in the early 1980s--that American companies had gotten fat, happy, and lazy--is no longer true. Three decades of ever-increasing shareholder "greed" have worked their magic, transforming the U.S. economy into a hyper-efficient, shareholder-rewarding money-machine.
Unfortunately, in that process, American companies have also come to neglect the most important engine in the U.S. economy: The tens of millions of "average employees" whose work allows companies to create value for their shareholders--and whose spending powers most of the American economy.

How important is the difference between then and now? Critically important….

Read more: http://www.businessinsider.com/economy-companies-wages-2012-6#ixzz1yuqWF8DB

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