(M)an: Dude! The Sahir Ludhianvi of America won the Nobel Prize in Literature yesterday!
(D)ude: Man! Bob Dylan! You know, Bob Dylan and Sahir Ludhianvi both stood on similar ground in terms of their perspectives. Sahir Ludhianvi was the poet-lyricist who was loved by liberal movie industry directors, the outstanding Yash Chopra and Guru Dutt. Chopra and Dutt were revolutionary in their stance concerning the great divide politically constructed by corrupt politicians between Pakistan and India. Multicultured and sophisticated, a lot of the people in Indo-Pak during these three brilliant men’s lives shared a desire for peaceful resolutions to conflicts, which continue to this day due to imbeciles like the genocidal Narendra Modi and the BJP in India and retired playboy cricketeer-corrupt philanthropist Imran Khan in Pakistan.
M: Dude! Americans need to go out and register to vote and then cast their ballots for Hillary Clinton and Tim Kaine in this year’s presidential race. We cannot afford American imbeciles like Donald Trump and the Congressional Republicans to take control of the White House and remain the Majority Party inside the United States Congress any longer. As Hillary Clinton and Tim Kaine clearly dissect the congressional Republicans’ obstructionism and sequester in their master blueprint for getting the American economy working for all Americans and not just Wall Street charlatans and heisters like Donald Trump and Mike Pence, we cannot afford to collapse into the mess that got US into the Great Recession at the end of George Walker Bush’s presidency, beginning with the following from Clinton and Kaine’s book entitled, rightfully so, Stronger Together and available at bookstores and online as well. This is how they start off in the direction of Democratic compassion favoring the American people’s best interests over corporate interests that congressional Republicans represent so ruthlessly, on page 4,
First, too many of our representatives in Washington are in the grips of a failed economic theory called trickle-down economics. It has been proven wrong again and again. But there are still people in Congress who insist on cutting taxes for the wealthy instead of investing in our future.
They careen from one self-inflicted crisis to another — shutting down the government, threatening to default on our national debt, refusing to make the commonsense investments that used to have broad bipartisan support, like rebuilding our roads, bridges, railways, airports, water systems and electric grid, or investing in better education from early childhood through high school and college.
And yes, too many special interests and too many lobbyists have stood in the way of progress while protecting the perks of the privileged few.
D: Man! You know, before people dismiss the Clinton and Kaine thoroughly documented paperback text blueprint for our future, they need to be reassured that Clinton and Kaine’s research and insights are being embraced all over the world.
M: Dude! How do you do that? How do you reassure?
D: Man! Very easily!
M: Dude! How so?
D: Man! There are two extraordinary academics who will be joining Bob Dylan at the December 10, 2016, reception in Sweden where this year’s laureates will be formally awarded their Nobel Prizes.
M: Dude! And who are they?
D: Man! This year’s Nobel Prize in Economics recipients, Oliver Hart and Bengt Holmstrom.
M: Dude! How do they validate or confirm what Hillary Clinton and Tim Kaine layout in their book Stronger Together: A Blueprint for America’s Future?
D: Man! If you continue reading where you left off in the Clinton and Kaine book a brief moment ago, you will find Clinton and Kaine making the exact same argument that Harvard’s Oliver Hart and MIT’s Bengt Holmstrom have confirmed with their exhaustive multidisciplinary research incorporating over two decades worth of cutting edge insight. So acutely current in relevancy to the going-ons in the private and public sectors within the United States, Hart and Holmstrom’s work is very easily broken down into simple terms by the Associated Press’s Paul Riseman and Karl Ritter.
M: Dude! Sure. Let’s see, page 4… all right! According to Clinton and Kaine,
It’s not just Washington.
Too many corporations have embraced policies that favor hedge funds and other big shareholders and top management at the expense of their workers, communities, and even their long-term value.
While corporate profits are at near-record highs, paychecks for most people have barely budged. Income and wealth inequality in America today has reached levels not seen since the 1920s. Corporate executives are making millions while working families are barely scraping by. The very richest Americans — the top one-tenth of 1 percent — now have nearly as much wealth as the bottom 90 percent. More than four out of ten children born into the lowest-income families never climb out of poverty. Leaders in Washington let Wall Street take big risks with unregulated financial activities, skewed our tax code toward the wealthy, failed to enforce trade rules, and undermined workers’ rights.
A survey of corporate executives found that more than half would hold off making a successful long-term investment if it meant missing a target in the next quarterly earnings report. In another recent survey, more than 60 percent said that pressure to provide short-term returns has increased over the previous five years.
We also know that publicly held companies facing pressure from shareholders are less likely to invest in growth opportunities than their privately held counterparts. American business needs to break free from the tyranny of today’s earnings report so they can do what they do best: innovate, invest, and build tomorrow’s prosperity.
What if an activist hedge fund had persuaded AT&T to maximize cash flow and close Bell Labs before the transistor or the laser was invented there?
What if Xerox had decided that its Palo Alto research park wasn’t doing enough to boost share prices in the short term? A young Steve Jobs would never have visited and the personal computer revolution might not have happened.
What if Congressional budget cuts had shut down DARPA — the Defense Advanced Research Projects Agency — before it developed the early Internet?
The kind of “quarterly capitalism” that dominates today is neither legally required nor economically sound. It’s bad for business, bad for wages, and bad for our economy. And fixing it — by rewriting the rules so companies treat workers as assets to be invested in rather than costs to be cut, and finally making sure the wealthy, Wall Street, and big corporations pay their fair share of taxes — will be good for everyone.
D: Man! Riseman and Ritter of the Associated Press summed up the two decades long pursuits in contract theory by Oliver Hart and Bengt Holmstrom in easy to understand language. As Riseman and Ritter explained with fluidity and ease on October 10, 2016,
Let insiders easily cash in stock options, as Enron did, and you risk seeing executives abandon a failing company. Encourage contractors to sacrifice quality to cut costs and you might cause problems like those that led the U.S. Justice Department to phase out privately run prisons.
Designing contracts is a tricky business. For their groundbreaking work on how to make contracts fairer and more effective, Oliver Hart of Harvard University and Bengt Holmstrom of the Massachusetts Institute of Technology won the 2016 Nobel prize for economics Monday. They will share the 8 million kronor ($930,000) award for their contributions to contract theory.
For decades, the two men have studied practical problems involving the countless kinds of contracts that underlie modern commerce: How should companies pay their executives? What types of tasks should government agencies outsource to private contractors? How best to write an auto insurance policy to protect drivers from financial loss without lulling them into carelessness?
Pay packages, Holmstrom's work suggests, are best tailored to avoid either punishing or rewarding CEOs for happenings beyond their control.
"You don't want to reward the CEO because the S&P 500 (stock index) has gone up 20 percent," said Patrick Bolton of Columbia University Business School, who studied under Hart and has written a textbook on the economics of contracts. "You want to reward the CEO when his company outperforms the S&P."
Likewise, companies fare best when they establish pay packages that incentivize executives to prioritize the long term as much as the short term, to avoid focusing too much on quarterly profit expectations.
"These kinds of insights into how we should design contracts are very important because we don't want to give the wrong incentives to people," said Tomas Sjostrom, a member of the Nobel committee. "We don't want to reward them for things that they were not responsible for. We want to reward the right thing."
M: Dude! I was in a car accident the other day. Remember? I called the police department and they informed us that unless there were bodily injuries sustained by either of the drivers and passengers in the cars, they could not afford to dispatch police officers to the scene of the accident.
D: Man! No! That’s terrible! What happened at the scene of the accident?
M: Dude! I had to call my car insurance company to fill in the role of arbiter that the police officer or officers would have been assigned if Texas had not been in such a financial mess after substantially cutting the police force. The roads are sinking because of neglect throughout Texas. Like Wal-Mart, the locally elected officials are totally focused on quick fixes rather than long-term investments in infrastructure. The pavements around residential neighborhoods are also sinking and blacktop bitumen is being used, as at Wal-Mart, to repair the damages. And the quick fixes need to be readdressed days later as the blacktop bitumen too wears off.
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