The Corpus Callosum

Simple Way To Make Many People Rich

On 26 January 2008, major employers in the USA announced 60,000 jobs
would be lost.  The market responded positively, as it often
does.  The S&P 500 gained 0.56%. 

Clearly the best thing that businesses could do would be to fire
everyone.  A quick Google search indicates that there are about
150 million jobs in the USA.  If everyone lost their jobs, the
S&P should gain 1,400%. 

At that point, anyone with just $35,000 in a retirement fund could
retire tomorrow with a half-million dollars, assuming their fund did as
well as the S&P 500. 

Oh, but if nobody were working, that half-million dollars would not do
any good.  No jobs = no products. 

Never mind.

Comments

  1. #1 Janne
    January 27, 2009

    “Oh, but if nobody were working, that half-million dollars would not do any good. No jobs = no products.”

    Imports.

  2. #2 Art
    January 27, 2009

    As related by a MBA friend of mine some executives will put the cherry on top of a string of improvements in quarterly profits by firing a good part of the staff and either selling outright or selling and leasing back the physical assets the company owns. You can really pump up profits for a short time by doing this. Freed from the cost of labor, production, maintenance, upkeep, accounting and flush with funds from selling everything that can be sold profits take off. Just before they crash.

    Timed with issuing more stock, a few friendly major media reports on how profitable the company is, public announcements of expansions and rumors of the company being bought out at favorable terms and people will be singing your praises. Pay raises all round for the executive staff keeps everyone positive, upbeat and buoyant. Everyone upbeat and things looking up few will bother to look under the hood.

    Do it well enough and the entire executive staff gets really big quarterly bonuses. Trick is to make sure the bonuses are not given in stock, or at least stock you can’t dump before your gutting of the firm becomes known.

    Pump it up, dump your stocks, use your golden parachute to bail out and create distance so you don’t get hit by any shrapnel or blame when the company craters. When people seek to assign blame for the company going down in flames cite, burdensome regulations, union interference and wider economic forces that were beyond your control.

    If anyone blames you you can feel real bad about it and cry into you Dom while your yachting your way across the Mediterranean with a siliconed bimbo under each arm.

  3. #3 Joseph j7uy5
    January 27, 2009

    Art: this is what they call “innovation,” which is a code for stealing in a way that you are unlikely to get caught.

    Janne: someone has to unload the ships, load the trucks and rail cars, transport the goods, run the stores, etc. But you have a point: the USA is not all there is to the economy.

  4. #4 Janne
    January 27, 2009

    “Janne: someone has to unload the ships, load the trucks and rail cars, transport the goods, run the stores, etc.”

    H-1b visas.

    OK, i’m being facetious here. Sorry.

  5. #5 opony
    February 5, 2009

    I agree.It’s not good idea