There is a persistent fantasy which claims that an economy can live off of Investments; that there is some means to gain ascendency over the economic hazards, and one can one day wind up living off the Profits of the labor of Others. It is a nice dream, even though it is propagated by minion paper salesmen, who show up for a 60-hour per Week job some five days a Week. I also like those 75-year-old Types who propound the dream of retiring when you are Forty. You know the Ones, who are sitting at their desks while making the prediction. Michael J. Roberts explains the situation better than I can, in an more coherent manner. The only real difference in our opinion may his faded adherence to the image of the dream. I, on the other hand, recognize that the greater the population field under study, the more uniform the statistical results will become; and eventual success in investment will eventually link to success in enterprise management, and statistically, no Investor will attain a long-term advantage over his Peers–One has to be In on the building of those Companies to make Money out of them.
Now comes the qualification placed upon the above Statement. You could start out by reading this article, if you have half a day with no meaningful expenditure of Time planned. It contains the basic argument that the managers should get the available Cash–not Investors. Only there is one difficulty with this position. The managers are utilizing other peoples’ funds, and cannot portray any observable Return to the usage of those funds. Management would claim this is to be the Risk of investment, but managers have taken to hiding total Cash reserve revelations, completed Pay packages for managers, and all Reward programs for Management. Where is that exact Point where business management is left, and fraud entered the Picture? It is clear that We are reduced to a behavioral environment where both Sides are partially Right, and obviously somewhat Wrong.
My solution would be passage of a simple law: No Profits distributions can be made until an average annual Return of 4% has been paid to Stockholders as Dividends, until 75% of those Profits have been expended. Federal Reserve banks will be detailed with supervision of the necessary documentation, and possess automatic Search Warrant capacity in pursuit of verification of all claims of Profits distribution; they entailed with this pursuit because of their capacity to pursue financial streams. The federal law should also state that any distribution not meeting such Standards are automatically subject to revocation and recall of all funds. This simply means that Managers are told that their bonuses are not their bonuses until the Government says that they have earned them. Am I loved, or am I loved! lgl