tag:blogger.com,1999:blog-1899606766246433608.post6563829887822634461..comments2023-11-08T12:09:20.020-05:00Comments on Prove Me Wrong: Colbert, Romney, and Ha-Joon ChangJonhttp://www.blogger.com/profile/10530680372103907969noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-1899606766246433608.post-41496409236316346272011-07-24T09:25:43.832-04:002011-07-24T09:25:43.832-04:00Two anecdotes for you. A friend of mine was a wel...Two anecdotes for you. A friend of mine was a welder at Ford. One day he tells me that an employee was high on the job and was fired. But he was union, so he was back working shortly afterwards. This friend was kind of a fan of the union, but thought that was crazy.<br /><br />As much as I'm a fan of unions it's true they come with costly abuses. I have another family friend at GM. He's a master mechanic. Fixes all their stuff. He is like the worst caricature of a union worker you would ever meet. Totally feels entitled. He took a "layoff" that included unemployment, plus compensation from GM and this meant he was making like 80 or 90% of his pay. Got like 2 months off. Soon as he went back he took his regularly scheduled 2 week vacation to Florida. Drove me crazy. And I was a right winger then.<br /><br />But the other thing this guy said was that the state of the plant where he worked was shocking. He was the one that kept the equipment working, so he knew it better than anybody. He'd tell management that the equipment was so old it barely functioned anymore. The failures of the equipment were constant. He'd say that it just needed to be replaced. They'd say no. Get some duct tape and glue and keep it going (I'm exaggerating, but this was the mentality).<br /><br />Of course it's just a story, but the thing is Wall St doesn't necessarily care of workers are over paid. I mean, reduce it if you can to increase profits. But if your hands are tied that's fine. We need profits in any case. So cut capital expenditures. Let's go for short term profits and dividends.<br /><br />The short vs long term horizons of stockholders/employees is one of contrast. You're right that ultimately I'm not as concerned with the long term health of my employer as I am in my own self interest. But I'm MORE interested in the long term health of the company than Wall St because I'm not as mobile as they are.Jonhttps://www.blogger.com/profile/10530680372103907969noreply@blogger.comtag:blogger.com,1999:blog-1899606766246433608.post-88846437623062602802011-07-24T00:56:48.726-04:002011-07-24T00:56:48.726-04:00GM's problems were unions and bad luck. Becaus...GM's problems were unions and bad luck. Because unions artificially increase labor costs so much relative to their competitors, GM was kinda pushed into the large SUV market. <br /><br />This made sense: they needed a product with higher profit margins - to compensate for the overpaid employees. They were doing okay for a while. Then gas prices skyrocketed. Harming GM and others in the same situation.<br /><br />Small cars have much tighter profit margins. Very difficult to compete in that arena...but they are trying nonetheless, but still getting crushed by their competition.<br /><br />Oh and, the same criticisms you give about stockholders can also be said about workers - they can have the same short term gain. Of course they are less mobile - but stockholders too can suffer from bad timing.HispanicPundithttps://www.blogger.com/profile/10220166238164432290noreply@blogger.com