US Airlines after using up 95 % of their cashffow gave $45bn to shareholders in five years now pushing for massive Govt. bailout

The United States’ five largest airlines – which are pushing for a $50bn-plus bailout to help them survive the Covid-19 crisis – have handed out more than $45bn to shareholders and executives over the last five years, research by the Guardian has found.

Delta, American Airlines, United, Southwest and Alaska have spent $44.9bn on share repurchases and dividends in the last five years, according to Guardian research. In addition, nearly $750m has been paid out to executives over the same time period.

According to separate data compiled by Bloomberg, these five airlines have spent 96% of their free cashflow on buying back their own shares over the last decade.

According to the Guardian’s data, from public filings made to the Securities and Exchange Commission, Delta spent $13.6bn on share buybacks and dividends between 2015 and 2019. The firm paid out a further $208m to executives between 2014 and 2018, according to data released in proxy statements sent to investors. Pay figures for 2019 should be released ahead of Delta’s 2020 annual meeting.

Read more https://www.theguardian.com/business/2020/mar/18/america-airlines-bailout-shareholders-coronavirus

Capitalism: The World Needs This: "The Saner Approach to Capitalism" - by Robert Reich

The old ways do not work anymore

In recent weeks, the managers, employees, and customers of a New England chain of supermarkets called "Market Basket" have joined together to oppose the board of director's decision earlier in the year to oust the chain's popular chief executive, Arthur T. Demoulas.

Their demonstrations and boycotts have emptied most of the chain's seventy stores.

What was so special about Arthur T., as he's known? Mainly, his business model. He kept prices lower than his competitors, paid his employees more, and gave them and his managers more authority.

Late last year he offered customers an additional 4 percent discount, arguing they could use the money more than the shareholders.

In other words, Arthur T. viewed the company as a joint enterprise from which everyone should benefit, not just shareholders. Which is why the board fired him.

It's far from clear who will win this battle. But, interestingly, we're beginning to see the Arthur T. business model pop up all over the place.

Patagonia, a large apparel manufacturer based in Ventura, California, has organized itself as a "B-corporation." That's a for-profit company whose articles of incorporation require it to take into account the interests of workers, the community, and the environment, as well as shareholders.

The performance of B-corporations according to this measure is regularly reviewed and certified by a nonprofit entity called B Lab.

To date, over 500 companies in sixty industries have been certified as B-corporations, including the household products firm "Seventh Generation."

In addition, 27 states have passed laws allowing companies to incorporate as "benefit corporations." This gives directors legal protection to consider the interests of all stakeholders rather than just the shareholders who elected them.

We may be witnessing the beginning of a return to a form of capitalism that was taken for granted in America sixty years ago.

What changed? In the 1980s, corporate raiders began mounting unfriendly takeovers of companies that could deliver higher returns to their shareholders - if they abandoned their other stakeholders.

The raiders figured profits would be higher if the companies fought unions, cut workers' pay or fired them, automated as many jobs as possible or moved jobs abroad, shuttered factories, abandoned their communities, and squeezed their customers.

Although the law didn't require companies to maximize shareholder value, shareholders had the legal right to replace directors. The raiders pushed them to vote out directors who wouldn't make these changes and vote in directors who would (or else sell their shares to the raiders, who'd do the dirty work).

Since then, shareholder capitalism has replaced stakeholder capitalism. Corporate raiders have morphed into private equity managers, and unfriendly takeovers are rare. But it's now assumed corporations exist only to maximize shareholder returns.

Read more: Robert Reich: The World Needs This Saner Approach to Capitalism | Alternet

France: Anything's possible now in Europe - by Serge Halimi

Everything was becoming impossible. It was impossible to increase taxes because that would discourage “entrepreneurs”. It was impossible to protect a country against commercial dumping by low wage countries, as that would contravene free trade agreements. It was impossible to impose even the tiniest tax on financial transactions; most states would need to support it in advance. It was impossible to reduce VAT, as Brussels would have to agree to that.

On 16 March, everything changed. Those orthodox institutions, the European Central Bank (ECB), the International Monetary Fund, the Eurogroup and the German government led by Angela Merkel forced the reluctant Cyprus authorities to take a step which, had it been taken by Hugo Chávez, would have been deemed dictatorial, tyrannical, a blow to liberty, and would have prompted angry editorials.

The step? Automatic withdrawals from bank deposits. The rate of confiscation, initially set at 6.75% to 9.90%, was almost a thousand times as much as the Tobin tax that has been a hot topic for 15 years.

So in Europe, where there’s a will there’s a way. Provided of course that the right target is chosen: not shareholders, not creditors, but the holders of deposit accounts in debt-ridden banks. It is so much easier to rob a pensioner in Cyprus (on the pretext that the real target is a Russian mobster hiding in a tax haven) than it is to extract money from a German banker or a Greek armaments manufacturer or a multinational with dividends tucked away in Ireland, Switzerland or Luxembourg.

Angela Merkel, the IMF and the ECB are forever talking about the imperative need to restore creditors’ “confidence” and the impossibility of increasing public expenditure or renegotiating sovereign debts: the financial markets would come down on any deviation. But how much confidence is it possible to have in the single currency and the sacrosanct guarantee of bank deposits when customers of a European bank can wake up to find that part of their savings has disappeared overnight?

Note EU-Digest: the playing field in Europe has tipped in favor of a dishonest financial industry and accommodating governments, with the taxpayer footing the bill.  A major overhaul is required  urgently. European politicians also better start serving the people who voted for them rather than private sector lobby groups who have taken over Bruxelles.

Read more: Anything's possible now - Le Monde diplomatique - English edition

Stock Market: Facebook goes Public and IPO could come with surprise twist

is expected to file as early as Wednesday to sell stock on the open market in what will be the most talked-about initial public offering since Google in 2004, maybe since the go-go 1990s.

Around the nation, regular investors and IPO watchers are anticipating some kind of twist — perhaps a provision for the 800 million users of Facebook, a company that promotes itself as all about personal connections, to get in on the action. "Pandemonium is what I expect in terms of demand for this stock," says Scott Sweet, senior managing partner at IPO Boutique, an advisory firm. "I don't think Wall Street would want to anger Facebook users."

Facebook is expected to raise as much as $10 billion US, which will value the company at $75 billion to $100 billion, making it one of the largest IPOs. A stock usually starts trading three to four months after the filing.

The highly anticipated filing will reveal how much Facebook intends to raise from the stock market, what it plans to do with the money and details on its own financial performance and future growth prospects.

Note EU-Digest: To show gratitude to the Facebook membership for making Facebook what it is today and to turn these members into true loyal stakeholders in the company,  Mark Zuckerberg  should give each Facebook member one share in the company at a value of $1.00 and make the share certificate downloadable. He should also give Facebook members the opportunity to buy preferred stock in the company. Why not?  

For more: Facebook IPO could come with surprise twist - Business - CBC News