Wednesday, February 4, 2015
Staples Merger With Office Depot: So Long Sherman Anti-Trust Act
As a child I became aware of monopolies as the steel industry "consolidated" in the 50's then faded away. Then there was the famous court room battles over breaking up MaBell. More taxpayers money gone to waste. There were small phone companies everywhere and what about GTE? They were also a competitor.
The result of this trial was that AT&T became a long distance carrier and there were now seven baby bells, each, I might add, a monopoly in its market.Within a year there were five, all merged with blessings of the very same government who tried to break them apart. In a few years we were back to, you guessed it, AT&T bigger and stronger than ever.
Why have laws if they are going to fail us? With the bankruptcy of Radio Shack imminent, we will have one company, Best Buy, to sell us electronic stuff. Do you think there are any great deals there? Not really when you are the only game in town. Do the items on the floor even work? They are certainly not the Apple Store. I know more than the "Sales Associates."
Now with office supply stores Staples and Office Depot set to merge, again with the governments blessing (who says you need to live in a Communist state when your government embraces the same tactics?) where does that leave me? Staples has already closed my nearest store as had Office Depot. Both stores were incredibly poorly run. In fact I hated to even go to them. Lights flickered, there were more customers than employees, the list could go on and on. Yet my choices are also now very limited. A short trip will now be miles to a store that has no incentive to save me money. Be sure to take a paper and pencil so you can write down the item and see if its cheaper on Amazon or Sam's Club. I also want and need to see the product before I buy. Now that option will be severely limited or delayed.
I think the time as come for a national discussion on corporate pay and profit. Sen. Ted Cruz is very wrong. These companies didn't do well legally. The CEO's are not that much smarter than you and me. They hire lawyers who spend their lives looking for loopholes. Maybe there will be a library of findings similar to the Talmud trying to wiggle out of American corporate laws. NO man or woman deserves a multimillion paycheck especially when they lose money for the company. I believe in Japan the CEO can only make a salary 10 times what the lowest paid employee makes each year. They are highly valued and respected. However, when things go badly, they resign so the company can move on. Sounds good to me.
We as a nation have a trifecta of greed that needs to be discussed:
1. What is a proper CEO's salary? When is he let go when things go bad? Forget the "golden handshake." Be happy they don't sue you for the losses! Lets look at upper management salaries as well. Most of GM's management should have been fired for the debacle there yet continued to make handsome salaries with bonuses to this day.
2. Laws current and coming up. Are they fair? Do they promote competition? Most do not and favor the very companies they are meant to regulate.
3. Let's kick out the analysts. Companies that have thrived (with the exception of Apple) have gone private and don't have to listen to the sharks. Its not their money or even company, what right do they have to tell others? We can thank Harvard for this but there is starting to be a turnaround in this concept. Read about Warren Buffet. Greed is not necessarily good. Companies and their stock holders certainly have a right to a "fair" dividend. The board of directors and upper management need to fall in the same payout schedules as anyone else. Corrupt officers need to be jailed and not in some cushy prison either. Let them rot with the hardcore. They think they are less bad than a robber? Think again. The same mentality guides them both. Something for nothing.
If you feel like I do, write your Congressman and Senator about this merger. Demand to know how it is to your benefit. I think in much closer inspection the only people benefiting are the companies corporate officers themselves NOT their customers or employees.
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