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In reply to the discussion: In Case You Missed This... And You Should Not... 'Wall Street Wins Again' - Salon [View all]Sekhmets Daughter
(7,515 posts)It's really not that difficult to understand. Wall St screwed everyone, not least of all the retailers and it goes back decades. I'll try to explain. In 2009 HBO ran a documentary "Schmattas: Rags to Riches to Rags" It chronicled the NYC garment industry, which was once a thriving force to be reckoned with. They interviewed the owner of Russ Togs, before it went public. Russ Togs was the first manufacturer to come out with 'coordinated separates' which meant you could buy 4/5 garments and have 3 or 4 different outfits. I loved Russ Togs... In any case, like most successful businesses, when it came time to consider further expansion the Wall Streeters convinced them to "go public" with tales of huge IPOs and vast riches. So they went public and the owners went from wealthy to filthy rich. Okay. But eventually the investors want a healthy return on their money as well and the easiest way to squeeze out profits is to squeeze labor. In 1969, 95% of all clothing worn by Americans was manufactured by Americans, by 2009 that was down to 5% and still shrinking. But things got worse, eventually Russ Togs filed for bankruptcy in 1991. A downturn in retail that the company couldn't handle because it was always feeding the investor maw and didn't have the funds needed to plow into the business.
That story has been written about 1000s of companies, some end up loaded down with debt from private equity takeovers, only to end up in bankruptcy anyhow. Retailers are in the same bind. Investors always want dividends, ROI. Business schools, for 3 decades, have been preaching/teaching that investor equity is the be all and end of of any business. The retailers are between the rock of investors wanting ROI and shoppers wanting the best prices...and the the hard place of wages.
I don't see anyone in the wings with the political will nor the political power to change the basic dynamics of capitalism....and that's what t will take. That or a catastrophic collapse that makes this last one look like a picnic, or a revolution.