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19 February 2020

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blue peacock

Robert,

Thanks for making the point about increase in market power through consolidation. The very antithesis of a free competitive market. The consequences of this concentration in market power across many market segments manifests in many ways. Not the least the manipulation of stock prices through corporate stock buybacks that have hugely benefited incumbent managements to the detriment of the competitiveness of the underlying business. These mega-trends driven by government policy have financialized our economy, dismantled our industrial base and created as Jack here has previously noted "a symbiotic relationship between big business and big government".

IBM is a poster child here. The company has shrunk from $106 billion in revenues in 2012 to $77 billion in 2019, yet former CEO Ginni Rometty extracted $100 million in just stock-based compensation. She spent her time with financial engineering, completely leveraging the once pristine balance sheet saddling the company with over $61 billion of long term debt. Boeing and GE being other good examples of this trend.

This is the tale of corporate America over the past 40 years. Once renowned for its engineering talent and industrial prowess it became a wealth extraction machine for managements and Wall St while slowly impoverishing the working and middle classes. Trump and Bernie populism is one of the political ramifications.

Fred

Blue peacock,

You left out IBM's shift to using H1B visas and outsourcing of programming and other engineering tasks.

Deap

More government spying and wrong doing, setting up private citizens and there is that name again- CrowdStrike - from Sheryl Attkisson's website:

..."The Attkisson lawsuit claims that in March 2011, Defendants SHAWN HENRY, Shaun Bridges, Robert Clarke, and Ryan White, all of whom were government employees connected to a special multi-agency federal government task force based in Baltimore, Maryland, were ordered by Defendant Rosenstein to conduct home computer surveillance on Attkisson and other U.S. citizens.

SHAWN HENTRY was head of the FBI’s Washington Field Office. In 2012, Henry left the FBI and now is president of CROWDSTRIKE Services, a company that seeks to mitigate targeted online attacks on corporate and government networks globally...."

*(use of caps added)

eri

Thank you for sharing

confusedponderer

Fred,
re You left out IBM's shift to using H1B visas and outsourcing of programming and other engineering tasks.

Well, I work in a corporation which has it's HQ in New York, and likely embraced NY-ish businessing ideas.

One day I had an e-mail problem and called our IT and asked for help, coffee granted and for free. Their office was 10 rooms away. He took up a ticket and told me that I would be recalled soon. I told him he was kidding and should just come. No way.

An hour later I got that recall and the caller spoke english. I asked him where he sat and he told me in New Zealand or Australia as part of our corporation. He didn't help but made another ticket and told me I would be recalled again. Alas.

I was recalled again half an hour later by a man with obvious indian sing sang and accent. He helped me in 5 minutes. Point is, he was an external.

And that is the absurdity - colleagues of my own cororation, even if just 20 metres away and available, just make tickets and an external service provider is then allowed to fix things on my computer with access to our data?

Probable reason - likely even a drunken and stoned student with rotten grades is more expensive per hour than an indian service provider with a master degree.

A rather unpleasant middle manager once asked me what I thought of his splendid outsourcering of all printing and the like. I told him it was a rotten idea. He told me I just wouldn't understand - our publishing company wouldn't produce "books" but "content". I'm proud I didn't puke.

Fred

CP,

While an Indian service provider may be cheaper by the hour, how the service is set up and runs matters quite a bit. I've been on the receiving end of both good and horrendous service calls as well as witnessed millions in maldeployed inventory due to outsourcing the decision making.

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