Monday, January 23, 2012
Example of the Basic Flaw of Capitalism
TI says chip demand is improving; to close 2 factories (Reuters) -- "Texas Instruments Inc reported better-than-expected fourth-quarter chip sales as customers in a broad array of industries replenished depleted inventories. TI shares rose more than 3.4 percent in late trade on Monday... (TI) plans to close two factories -- one in Texas and another in Japan -- in the next 18 months to cut costs."
Let's go over that...
1) Better than expected 4Q sales = more profit taking for Investors
2) More profit means more investment in TI ("shares rose more than 3.4% on Monday)
3) Rising shares means TI will cut all necessary costs to ensure greater profitability so that Investors are continually pleased (closure of two factories)
4) Those 'cuts' are lost jobs- people's livelihoods. In the US where we are in a depression but no public official has the cajones to say it openly, and in Japan that is experiencing its economic miseries of their own.
End result-- Hundreds of people newly out of work and dependent on their respective governments to financially care for them, TI saves some money and Investors are happy bunnies
This is the basic flaw of Capitalism, an economic system that otherwise is better than all the rest.
~ When one loses their job because the corporation is losing money, its called "downsizing". And when one loses their job while the corporation is making profit, its called "restructuring". Given the choice I rather be downsized-- at least I know the entity causing me economic hardship is feeling it as well