Antonio Weiss, the Wall Street banker, has asked to withdraw his nomination to be the third-ranking official at the Treasury Department. This is a great moment, a bit of a surprise, a real show of populist--and Elizabethe Warren--power. Congratulations to all who fought it. This article from last month by David Dayen explains what the nomination is really about: The common theme around Weiss’ work is that he engages in deals that reward top executives, while rank-and-file workers get the shaft. CEOs like Motorola Mobility’s Sanjay Jha get huge golden parachute deals after getting purchased. Executives at the new companies make fortunes in bonuses and stock options. Those who produce the products get a pink slip. In addition, many of Weiss’ merger deals have led to monopolies, from AB InBev’s control of the beer market, to the 2007 deal between Nestlé, Gerber and Novartis Medical Nutrition, creating a company that sells 81 percent of the nation’s baby food. These monopolies drive down supplier prices in the same way Wal-Mart’s dominance of retail impoverishes the companies who sell them goods. It’s the opposite of what is supposed to enrich capitalism, the constant competition that creates benefits for consumers on both price and quality. The deals also exhibit the modern hallmark of corporate America: financial engineering. Decisions are made to satisfy shareholder clamoring for short-term profits rather than any long-term vision about building a quality business.
Posted on: Mon, 12 Jan 2015 22:33:42 +0000