The rise of the corporate colossus is a giant problem • Hacker News Board

Re: The rise of the corporate colossus is a giant problem

#51

Post by hx87 » Thu, Sep 15, 2016, 7:39 PM UTC

sharemywin wrote: post #31

nonameface wrote: post #29

Earlier quoted context omitted.

That is a direct quote from the article. The article states $36B as well, not $360B. "None of this helps the image of big business. Paying tax seems to be unavoidable for individuals but optional for firms. Rules are unbending for citizens, and up for negotiation when it comes to companies. Nor do profits translate into jobs as once they did. In 1990 the top three carmakers in Detroit had a market capitalisation of $…

I look it up Ford, GM had sales over 100B that year. assuming maybe Toyota as the 3rd.

Market cap tends to be much lower than revenue for capital-intensive industries. Factories, machine tools, and steel cost a lot of money, after all.

Re: The rise of the corporate colossus is a giant problem

#52

Post by rayiner » Thu, Sep 15, 2016, 7:40 PM UTC

BurningFrog wrote: post #38

rayiner wrote: post #30

Earlier quoted context omitted.

The problem with the libertarian explanation is that it contradicts the actual facts. The "age of the Regulatory" state started in the 1930's. It has been in decline for decades--with major sectors of the economy being deregulated in the 1980's and 1990's. In the 1950's and 1960's, regulatory agencies often had the power to directly exclude potential competition and set prices for goods. They have a fraction of those…

> It has been in decline for decades I don't have time to put together a great convincing case, so I'll just say that this is very different from my view. Some high level regulations have been removed, sure, but meanwhile almost every corner of life now has regulations and regulators that have to be obeyed and asked for permission. It would be nice to have some kind of objective measure(s) of the overall level of sta…

I would guess your view derives from the fact that the parts of the regulatory state that have grown since the 1970's have more direct effects on individuals and small businesses: environmental, workplace safety, anti-discrimination, anti-money laundering. But there isn't much money in gaming those. The big-money sectors of the economy: telecommunications, transportation, manufacturing, and finance have been deregulated. And software has become a big-money sector of the economy and has remained almost completely unregulated.

I handle appeals in regulatory cases, so I have occasion to research historical regulatory treatment of different areas. It's really eye-opening to go read ICC, FCC, or FERC opinions from the 1940s and 1950s and compare them to ones from today. Agencies back then had vast powers: they could deny entry of a competitor into a market if they felt it would harm the revenues of incumbents. If you were an air carrier, you had to publish your prices, and if the agency did not like them it could impose prices on you. Those agencies are a shell of their former selves. Agencies used to have to power to structure industries top-down as they saw fit. Today, they might have thousands of pages more regulations covering various minutia, but nobody is going to build a "corporate colossus" lobbying to influence agency treatment of minutia.

Re: The rise of the corporate colossus is a giant problem

#53

Post by hx87 » Thu, Sep 15, 2016, 7:45 PM UTC

BurningFrog wrote: post #38

rayiner wrote: post #30

Earlier quoted context omitted.

The problem with the libertarian explanation is that it contradicts the actual facts. The "age of the Regulatory" state started in the 1930's. It has been in decline for decades--with major sectors of the economy being deregulated in the 1980's and 1990's. In the 1950's and 1960's, regulatory agencies often had the power to directly exclude potential competition and set prices for goods. They have a fraction of those…

> It has been in decline for decades I don't have time to put together a great convincing case, so I'll just say that this is very different from my view. Some high level regulations have been removed, sure, but meanwhile almost every corner of life now has regulations and regulators that have to be obeyed and asked for permission. It would be nice to have some kind of objective measure(s) of the overall level of sta…

It's probably safe to say that business-level regulation has fallen while product-level regulation has risen.

Re: The rise of the corporate colossus is a giant problem

#54

Post by _delirium » Thu, Sep 15, 2016, 7:48 PM UTC

DanBC wrote: post #15

jessaustin wrote: post #13

Earlier quoted context omitted.

Because Apple didn't pay the tax it owed to Ireland, Ireland should pay something? To whom, Apple? What could justify that?

Ireland set the tax rate that Apple complied with. Ireland is accused of providing a state funding to Apple by setting that low rate. (I didn't downvote you).

This isn't specific to Apple or Ireland (or even taxes) fwiw. Ordering the company to pay back the subsidy is a normal part of the remedy for subsidies found to violate EU anti-subsidy regulations. The intent is to make it ineffective for a country to pay out subsidies, because they will in the end not have the intended effect, as the company won't get to keep the money. If the remedy were a fine levied on the subsidizing state, but without required repayment, illegal subsidies would have their intended effect of actually subsidizing the target firm (they'd just become more expensive, because the fine would become part of the cost of the subsidy).

For example, when Real Madrid was found to have been unlawfully subsidized by a local Spanish government earlier this year (they were given €18.4m as compensation for a land transfer that fell through), they were ordered to repay the €18.4m [1].

[1] http://www.bbc.co.uk/news/world-europe-36706262

Re: The rise of the corporate colossus is a giant problem

#55

Post by pmoriarty » Thu, Sep 15, 2016, 7:49 PM UTC

jackcosgrove wrote: post #32

throwaway729 wrote: post #21

Earlier quoted context omitted.

Gvien the forum we're on, it's worth pointing out that today's white collar laborers are capturing one or two orders of magnitude less of the value they're creating than the blue collar workers of 1990's detroit. 360 billion* divided by 1.2 million = 300000 "per employee". Typical salary to 40,000ish-100,00ish range for laborers/engineers. The disparity in those numbers isn't so bad at all. Conversely, 1 trillion div…

Not only that, but in US salaried status is routinely used to avoid paying overtime, when overtime is a tacit requirement of many jobs.

This is a great point. Comparisons should really take in to account salary per real hour worked, not just salary per year.

Re: The rise of the corporate colossus is a giant problem

#56

Post by pipio21 » Thu, Sep 15, 2016, 7:49 PM UTC

Blame "too big to fail" and negative interest rates.

When big banks had problems, the solution was to make even bigger banks and giving them free money in order to look good.

They take savers money with negative interest rates and give it free to big banks and companies like Google, Microsoft or Deutsche Bank.

Given that if you(as a person or small company) ask a bank for money you will have to pay 20% interest rates or so, this is a tremendous advantage for them.

Big companies have free money because they can ask for a loan and give back later less that what they took after inflation!!!

This means big companies could buy the competition instead of competing with them , like facebook with wassapp, with stock, being cheaper than having their overvalued stock go down with competition.

It also means big companies could buy their own stock in the market and pump up their value, making the stock acquisition cheaper and increasing board bonus(from stock owners) look reasonable.

Central banks and politicians are obliterating middle class and business owners. This is a terrible thing because History teach us this always happens before a (violent)revolution.

Re: The rise of the corporate colossus is a giant problem

#57

Post by rogerbinns » Thu, Sep 15, 2016, 7:49 PM UTC

sharemywin wrote: post #35

throwaway729 wrote: post #21

Earlier quoted context omitted.

Gvien the forum we're on, it's worth pointing out that today's white collar laborers are capturing one or two orders of magnitude less of the value they're creating than the blue collar workers of 1990's detroit. 360 billion* divided by 1.2 million = 300000 "per employee". Typical salary to 40,000ish-100,00ish range for laborers/engineers. The disparity in those numbers isn't so bad at all. Conversely, 1 trillion div…

Funny cause amazon is closer to the 330K per employee mark. Wonder why their P/E is so high? Assuming it took all of walmart's sales it would only get 4 times bigger then now. how much profit can it extract?

I'll bite. How about for every incremental $1 in ecommerce spending, Amazon gets about 50 cents? And (roughly speaking) many new startups start out and grow on AWS providing new revenue as well as valuable intelligence.

http://www.marketwatch.com/story/amazon-will-account-for-mor...

https://stratechery.com/2016/the-amazon-tax/

Re: The rise of the corporate colossus is a giant problem

#58

Post by pmoriarty » Thu, Sep 15, 2016, 7:52 PM UTC

Animats wrote: post #46

IsaacL wrote: post #16

Earlier quoted context omitted.

Sarbanes-Oxley probably played a role as well. Successful startups now chase acquisition over IPO, which leads to the creation of huge empires (Apple, Google, Amazon, Microsoft) and few medium-sized players.

No, that's because the overvalued market caps wouldn't fly in an IPO. If Uber went public, they'd have to disclose real numbers, which probably indicate they're unprofitable. They're only worth $68 billion when the market doesn't have to pay out $68 billion. It's today's very low interest rates that fuel "private equity", which is usually debt at some level.

How much investment is actually done based on such fundamental analysis?

Re: The rise of the corporate colossus is a giant problem

#59

Post by pmoriarty » Thu, Sep 15, 2016, 7:56 PM UTC

BurningFrog wrote: post #38

rayiner wrote: post #30

Earlier quoted context omitted.

The problem with the libertarian explanation is that it contradicts the actual facts. The "age of the Regulatory" state started in the 1930's. It has been in decline for decades--with major sectors of the economy being deregulated in the 1980's and 1990's. In the 1950's and 1960's, regulatory agencies often had the power to directly exclude potential competition and set prices for goods. They have a fraction of those…

> It has been in decline for decades I don't have time to put together a great convincing case, so I'll just say that this is very different from my view. Some high level regulations have been removed, sure, but meanwhile almost every corner of life now has regulations and regulators that have to be obeyed and asked for permission. It would be nice to have some kind of objective measure(s) of the overall level of sta…

"almost every corner of life now has regulations and regulators that have to be obeyed and asked for permission"

If you honestly believe that about the US, you should visit Germany.

Re: The rise of the corporate colossus is a giant problem

#60

Post by arca_vorago » Thu, Sep 15, 2016, 8:01 PM UTC

throwaway729 wrote: post #21

sharemywin wrote: post #8

In 1990 the top three carmakers in Detroit had a market capitalisation of $36 billion and 1.2m employees. In 2014 the top three firms in Silicon Valley, with a market capitalisation of over $1 trillion, had only 137,000 employees.

Gvien the forum we're on, it's worth pointing out that today's white collar laborers are capturing one or two orders of magnitude less of the value they're creating than the blue collar workers of 1990's detroit. 360 billion* divided by 1.2 million = 300000 "per employee". Typical salary to 40,000ish-100,00ish range for laborers/engineers. The disparity in those numbers isn't so bad at all. Conversely, 1 trillion div…

"today's white collar laborers are capturing one or two orders of magnitude less of the value they're creating than the blue collar workers of 1990's detroit."

Which is why the problems associated are much more about the macro-economy than they are about silicon valley. The middle class is being gutted before our very eyes while the elite gobble up more and more of the "created value" through the power of technology.