A thought on profit
There is a big difference between "losing sales" and "being unprofitable". I can't manage to feel sorry for companies that, to be blunt, aren't making as much money as they could if they were monopolistic and able to charge whatever the hell they feel like for the stuff they sell. How much money does a company need to make?
Dickens once said: Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
Let's face it - if a company is making profits, it's making profits. Do you need to make as much money as you possible can - even to laying off your employees? Even to making seniors choose between meds and good food, or the lower third of the population between medical insurance and a place to live?
Wall Street needs to understand that the love of money is the root of, if not all evil, a great deal of social agony. I'm not saying corporations shouldn't be profitable. But why isn't profitable enough?
Labels: politics
2 Comments:
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At 11:01 AM, May 03, 2007
Barry Leiba had this to say...
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At 3:29 PM, May 03, 2007
The Ridger, FCD had this to say...
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<-- Older Post ^ Home Newer Post -->I mostly agree (I certainly agree with the spirit of what you're saying), but there are two "well..."s:
1. There is a question of degree. Most of us want to gain more than sixpence, regardless of Dickens's commentary. If a company makes $150 million in profit, down from $250 million last year, then, yes, it's hard to feel sorry for them, sort of like it's hard to feel sorry for the guy whose second Ferrari is acting up. And I know that that's really what you're going after here. For smaller companies, with lesser profits, this year's profits are often making up for startup losses, or are a buffer for possible losses in future.
2. I'm not defending this, just stating it: We're usually not talking, here, about Jane taking home the profits from her bakery. There are many, many more people (shareholders) expecting to have their cut of the profits. When one looks at it as earnings per share, it's not quite the same.
Now, whether (2) is the model we should be encouraging or not is a separate debate, and, sure, the vast majority of shares in most companies are held by a few shareholders, so the fact is that when profits drop, Barry winds up with a not-very-good stock, but the guy who has 650,000 shares is still raking in some tidy income.
You're right - I'm not talking about Mom & Pop. For one thing, they don't make billions in "extra profit", nor do they lay off their employees to give their shareholders a little jazz in the quarterly statement. Nor does Wall Street chide them for reporting less profit than anticipated.
But I do not see where the primary objective of a company should be to enrich the shareholders at the expense of the customers and - more importantly - the workforce. That this is the way things are, I acknowledge; but I dream of a world where enough profit would be, well, enough.
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