>Doug, this is a very undynamic analysis of changes in local service,
>ignoring the massive lowering of costs due to technological advance that had
>preceded "deregulation." Try your numbers not for a few years in the late
>70s but over the post-war period and you will get much more dramatic
>results.
Sorry, but the CPI local telephone subindex begins only in Dec 77. If there were earlier numbers, I'd certainly have used them
> And your numbers ignore the additional costs slapped onto
>consumers beyond nominal phone service - increased installation costs,
>increased maintenance charges, increased charged for connection to long
>distance in many cases, and so on. But most of all, you miss the massive
>decline in quality of service which is tied into the massive losses for
>workers in the process.
If the BLS was doing the numbers right, all but the fate of the workers should be incorporated in the index. Quality declines are the major reason the airfare subindex of the CPI has risen at twice the rate of the overall CPI since dereg.
> "Deregulation" led to massive layoffs among the Baby
>Bells which has decreased quality and service for all consumers. Folks may
>not have seen all their bills increase, but what they are getting is of much
>lower quality due to the massive cuts in funding for local service in favor
>of big business customers of long distance.
This is way way overstated. Verizon doesn't provide dreamily wonderful service, but it's not all that bad.
But the issue isn't the quality of local phone service - it's whether Mike Milken deserved to go to jail. I don't think so, apart from the fact that after the revo, all capitalists should go to jail.
>The fact is that junk bonds strengthened the power of investor-capitalists
>at the expense of other actors in the economy in controlling enterprises.
>Not that other actors - creditors and managers - were always friendly to
>workers interests, but they were more likely to cut deals to workers
>advantage than investors who were much more likely to be in a zero-sum
>struggle over the wage-profit split. It is no coincidence that the rise of
>junk bonds and takeovers in the 1980s coincided with massive union busting.
And Milken is solely responsible for this? Names like Volcker and Reagan count for nothing? Many kinds of union busting is perfectly legal in the U.S.
>The point is not theory and pension fund activists were usually not in a
>position on their own to leverage massive takeovers and then betray implicit
>contracts with long-time employees. Far more interesting than Jensen in
>analyzing corporate control of enterprises is John Coffee of NYU, who has
>argued for analyzing firms as a coalition of interests - creditors,
>managers, investors, workers, etc. - who negotiate continually with
>different partners and who have to maintain some credibility for long-term
>commitments if they are repeat players in such negotiations.
Well no kidding. I've actually read Coffee and a lot of the corporate governance literature. I don't know that he's "more interesting" than Jensen - Jensen's quite a character. Jensen's picture of capitalism as something that should be run for shareholders, everyone else be hanged, looks a lot like the way the U.S. is run these days. Coffee's stakeholder system sounds like a relic of our Galbraithian past.
>Coffes's analysis of the 1980s as a time of massive repudiation of implicit
>contracting in the marketplace is a far more compelling analysis than the
>bland econo-speak of Jensen and others who have such a narrow analysis of
>what a firm is as an entity. And it explains far better the lived
>experience of workers and unions as suffering due to Milken and the junk
>bond driven takeover period. They saw his actions and the results as
>criminal destruction of their own lives. Were they all just deluded?
You're confusing what is with what might be better. And you still haven't argued that Milken - or Jensen - really violated any laws.
>This experience in Vegas was duplicated across the country in the 1980s.
>Yes, Milken was not the only player but he was a heck of an important one
>and just because his ass was fried and others got away is no reason to cry a
>tear for him. I'm all for analysis that says he is only a symbol of a much
>bigger problem in capitalism, but his crimes were real in the lives of
>millions of workers across the country.
Milken did time, but the shareholder revolution went on to ever-greater triumphs. But if harming workers were a crime, millions of managers and bankers should be in jail. They're not, and won't be. Why single out Mike?
Doug