Art of the "rent seeking" Deal

[funinspace]

I thought this was an interesting article that might explain at least part of Trump’s worldview, at least in the economic realm. I might even prefer John McCain's macroeconomic comprehension to Trump's if this analysis is accurate to Trump's thinking. The author does a good job of describing “rent seeking” and its distortions of transactions/deals. And he even took a look at Trump's campaign site...
http://www.nytimes.com/2016/03/20/m...mp-doesnt-understand-about-the-deal.html?_r=1

Manhattan real estate development is about as far as it is possible to get, within the United States, from that Econ 101 notion of mutually beneficial transactions. This is not a marketplace characterized by competition and dynamism; instead, Manhattan real estate looks an awful lot more like a Middle Eastern rentier economy.
<snip>
In recent weeks, hearing Trump talk, I’ve realized that his economic worldview is entirely coherent. It makes sense. He is not just a rent-seeker himself; his whole worldview is based on a rent-seeking vision of the economy, in which there’s a fixed amount of wealth that can only be redistributed, never grow. It is a world*view that makes perfect sense for the son of a New York real estate tycoon who grew up to be one, too. Everything he has gotten — as he proudly brags — came from cutting deals. Accepting the notion of a zero-sum world, he set out to grab more than his share. And his policies would push the American economy to conform with that worldview.
<snip>
But this descent into a rentier economy would only accelerate with a mentality like Trump’s in the White House. The native-born population of the United States is aging rapidly; without immigrants the nation would quickly face a disastrous level of debt. Middle-class workers may be struggling now in a changing economy, but a clampdown on global trade would only make that worse. Any health care reform that revolved around the president’s ability to ‘‘deal’’ would inherently be one more prone to corruption. In a rentier state, every ambitious person knows that the way to become rich and powerful is to grab the sources of wealth and hold onto them, by force if necessary. It’s no accident that, around the world, rentier states tend to be run by unelected dictators — the ultimate dealmakers in chief.

 

[JonA]

How do you tell the difference between rent and genuine profit when the owner is the same as the improver?

 

[laughing dog]

Technically in economics, "rent" is the part of a payment (or income) that is over and above what it takes to use or obtain the resource. One way to view it is as the difference between the actual price and the minimum acceptable price to the owner.

Now, how easy that is to estimate or obtain in the real world is a different matter.

 

[RavenSky]

The term "rentier" means "a person living on income from property or investments" - a perfect description of Trump. Basically, a person who does not actually create or produce anything, does not actually contribute anything to an economy - ironically, the complete opposite of an Ayn Rand's "Capitalist"

In this context, I'd say Mitt Romney is a form of rentier, too.

 

[Axulus]

The term "rentier" means "a person living on income from property or investments" - a perfect description of Trump. Basically, a person who does not actually create or produce anything, does not actually contribute anything to an economy - ironically, the complete opposite of an Ayn Rand's "Capitalist"

In this context, I'd say Mitt Romney is a form of rentier, too.

Except that private equity has been demonstrated to improve the economy on multiple metrics from multiple studies, so Mitt Romney would seem to fail your own definition. Either that or you are a private equity denialist. I wouldn't feel bad about that though, it seems to be a requirement these days to be a member of the left akin to global warming denial on the right.

 

[barbos]

The term "rentier" means "a person living on income from property or investments" - a perfect description of Trump. Basically, a person who does not actually create or produce anything, does not actually contribute anything to an economy - ironically, the complete opposite of an Ayn Rand's "Capitalist"

In this context, I'd say Mitt Romney is a form of rentier, too.

Except that private equity has been demonstrated to improve the economy on multiple metrics from multiple studies, so Mitt Romney would seem to fail your own definition. Either that or you are a private equity denialist. I wouldn't feel bad about that though, it seems to be a requirement these days to be a member of the left akin to global warming denial on the right.

I wonder if there are studies which show HFT (High Frequency Trading), gambling, tobacco industry improve economy too.

 

[untermensche]

Trump is a con man and his "fortune" is a house of cards.

It is only in insane upside down economies based on the dreams of avarice that creatures like him can thrive.

 

[Will Wiley]

The term "rentier" means "a person living on income from property or investments" - a perfect description of Trump. Basically, a person who does not actually create or produce anything, does not actually contribute anything to an economy - ironically, the complete opposite of an Ayn Rand's "Capitalist"

In this context, I'd say Mitt Romney is a form of rentier, too.

Except that private equity has been demonstrated to improve the economy on multiple metrics from multiple studies, so Mitt Romney would seem to fail your own definition. Either that or you are a private equity denialist. I wouldn't feel bad about that though, it seems to be a requirement these days to be a member of the left akin to global warming denial on the right.

When you say "private equity" what do you mean...do yiou mean Private Equity...or private equity?

 

[Tigers!]

The term "rentier" means "a person living on income from property or investments" - a perfect description of Trump. Basically, a person who does not actually create or produce anything, does not actually contribute anything to an economy - ironically, the complete opposite of an Ayn Rand's "Capitalist"

In this context, I'd say Mitt Romney is a form of rentier, too.

Your definition of rentier would also capture those who have spend all their lives in politics or in academia.

 

[SimpleDon]

The term "rentier" means "a person living on income from property or investments" - a perfect description of Trump. Basically, a person who does not actually create or produce anything, does not actually contribute anything to an economy - ironically, the complete opposite of an Ayn Rand's "Capitalist"

In this context, I'd say Mitt Romney is a form of rentier, too.

Except that private equity has been demonstrated to improve the economy on multiple metrics from multiple studies, so Mitt Romney would seem to fail your own definition. Either that or you are a private equity denialist. I wouldn't feel bad about that though, it seems to be a requirement these days to be a member of the left akin to global warming denial on the right.

You are correct, private equity is a modern adaption of the principles of creative destruction. It breaks up companies who are not making the best use of their assets.

It is possible that Raven is correct about Romney today if he is no longer actively involved in private equity but instead is living off of his investments, which would make him a rentier. He claimed to be out of active involvement in private equity in 2012.

 

[SimpleDon]

The term "rentier" means "a person living on income from property or investments" - a perfect description of Trump. Basically, a person who does not actually create or produce anything, does not actually contribute anything to an economy - ironically, the complete opposite of an Ayn Rand's "Capitalist"

In this context, I'd say Mitt Romney is a form of rentier, too.

Your definition of rentier would also capture those who have spend all their lives in politics or in academia.

Rentiers are passive investors and people who are part of the necessary mechanism of capitalism who don't contribute to the economy but who claim a part of the wealth created by others, bankers, stock brokers, agents, lobbyists, etc. In my business we called them 2%'ers. Their behavior is called "rent seeking."

Adam Smith's The Wealth of Nations wasn't so much an ode to the glory of capitalism and the free market as it was a warning that the rentiers could choke off the capitalist economy if they weren't controlled and contained and that the rentiers have to be closely watched because they are constantly devising new methods of imposing their rents. He proposed using the government to control and to limit the rent seeking.

 

[laughing dog]

The term "rentier" means "a person living on income from property or investments" - a perfect description of Trump. Basically, a person who does not actually create or produce anything, does not actually contribute anything to an economy - ironically, the complete opposite of an Ayn Rand's "Capitalist"

In this context, I'd say Mitt Romney is a form of rentier, too.

Except that private equity has been demonstrated to improve the economy on multiple metrics from multiple studies, so Mitt Romney would seem to fail your own definition. Either that or you are a private equity denialist. I wouldn't feel bad about that though, it seems to be a requirement these days to be a member of the left akin to global warming denial on the right.

You are employing faulty logic. Even if private equity as a general tool improves the economy, it does not follow that any specific private equity firm improved the economy.

 

[funinspace]

http://www.econlib.org/library/Enc/RentSeeking.html

“Rent seeking” is one of the most important insights in the last fifty years of economics and, unfortunately, one of the most inappropriately labeled. Gordon Tullock originated the idea in 1967, and Anne Krueger introduced the label in 1974. The idea is simple but powerful. People are said to seek rents when they try to obtain benefits for themselves through the political arena. They typically do so by getting a subsidy for a good they produce or for being in a particular class of people, by getting a tariff on a good they produce, or by getting a special regulation that hampers their competitors.

http://www.frbsf.org/economic-research/files/NTJ-business-lower-tax-rates.pdf

The standard model of strategic tax competition assumes that government policymakers are perfectly benevolent. We depart from this assumption by allowing for the possibility that policymakers are influenced by the rent-seeking (lobbying) behavior of businesses.

 

[Horatio Parker]

An interview with Michael Hudson:

The financial sector today is decoupled from industrialization. Its main interface with industry is to provide credit to corporate raiders. Their objective is asset stripping, They use earnings to repay financial backers (usually junk-bond holders), not to increase production. The effect is to suck income from the company and from the economy to pay financial elites.

These elites play the role today that landlords played under feudalism. They levy interest and financial fees that are like a tax, to support what the classical economists called “unproductive activity.” That is what I mean by “parasitic.”

If loans are not used to finance production and increase the economic surplus, then interest has to be paid out of other income. It is what economists call a zero-sum activity. Such interest is a “transfer payment,” because it that does not play a directly productive function. Credit may be a precondition for production to take place, but it is not a factor of production as such.

The situation is most notorious in the international sphere, especially in loans to governments that already are running trade and balance-of-payments deficits. Power tends to pass into the hands of lenders, so they lose control – and become less democratic.

http://www.nakedcapitalism.com/2016...conomy-and-the-coming-financial-cold-war.html

 

[SimpleDon]

How do you tell the difference between rent and genuine profit when the owner is the same as the improver?

Almost the entire theoretical push of neoclassical economics has been to prove what is called a regular production function. A function that establishes that profits are to the capital investment like wages are to the labor. (I should say a mathematically regular production function that includes a role for capital investment as an input required to produce an output, for the semantic warriors among us.)

This is the holy grail of neoclassical economics, proof that investment earns its way as at least an equal if not a superior to labor in the production of products for consumption.

They have so far failed. Like most of neoclassical economics failures all that they had to do was to look at the real world and they would have understood that what they they were after is impossible.

A business can run forever without earning a profit. It can't run for a single day without labor.

Profit is the residual, the amount of money that is left over after all of the bills are paid. There is no magical function that forces a profit out of a revenue stream.

All that is required to invest to start a business is the possibility of making a profit.

 

[SimpleDon]

An interview with Michael Hudson:

The financial sector today is decoupled from industrialization. Its main interface with industry is to provide credit to corporate raiders. Their objective is asset stripping, They use earnings to repay financial backers (usually junk-bond holders), not to increase production. The effect is to suck income from the company and from the economy to pay financial elites.

These elites play the role today that landlords played under feudalism. They levy interest and financial fees that are like a tax, to support what the classical economists called “unproductive activity.” That is what I mean by “parasitic.”

If loans are not used to finance production and increase the economic surplus, then interest has to be paid out of other income. It is what economists call a zero-sum activity. Such interest is a “transfer payment,” because it that does not play a directly productive function. Credit may be a precondition for production to take place, but it is not a factor of production as such.

The situation is most notorious in the international sphere, especially in loans to governments that already are running trade and balance-of-payments deficits. Power tends to pass into the hands of lenders, so they lose control – and become less democratic.

http://www.nakedcapitalism.com/2016...conomy-and-the-coming-financial-cold-war.html

Without a doubt the largest number of rent seekers are in the financial sector and among the "investor class."

The stock market, for example, was an important part of the capitalist system two hundred years ago. It was the primary source of investment for large scale businesses, both for start ups and for businesses wishing to expand.

But, and this will be news to mainstream neoclassical economists so don't tell them, a lot has changed in the last two hundred years in the economy.

Existing corporations don't use the stock market as a source of investment capital any more and haven't for a hundred years. And likewise start up companies don't go to the stock market to raise their initial investment.

Existing companies retain earnings, profits, to fund expansions, new factories, research and development of new products or new processes to produce existing products more efficiently. If not from retained earnings then the corporation will borrow the money by issuing bonds or as a last resort taking out a loan from a bank.


No one in the stock market has the expertise to properly evaluate an idea for a modern start up company.

I looked into the numbers for these questions in another thread with Loren. In 2015 the total amount of IPOs offered in the year in American stock market was 80 billion dollars. This is a lot of money, for sure, but it pales in comparison to a single day's trading in the stock markets, much less compared to the entire year's trading. And IPOs are not for start ups, they are for private companies going public when the private owners want to cash out of the business. SEOs, secondary stock (equity) offerings are so rare that I couldn't find any estimate of them, only a statement that they are at least two orders of magnitude less than the amount IPOs.

Loren believes that the Venture Capitalists funds are an example of the stock market providing investment capital for start up companies. While VC funds are separate from the stock markets the markets do provide liquidity for the VC funds. But this is through the IPOs already covered here. And VC funds provide investment to only about 1% of all of the businesses started in a year.

So the stock market no longer provides any meaningful amount of investment capital to industry.

What it does do is to divert large amounts of money from the economy into the stock markets, an estimated one trillion dollars in 2015, in the form of dividends and stock buybacks, meant to boost the stock prices of the companies.

One trillion dollars that could been used for meaningful, real investment, for higher wages, or for the many underfunded but vital government services, education, research, infrastructure, etc.

Increasingly we have two separate economies. The economy of providing goods and services for consumption, the real economy that all of us depend on for our livelihood. And an economy whose products are nothing more than paper and promises. An economy whose main arena is little more than a huge casino, where one person's profits are another person's loss. Where growth, so-called capital gains, depends on a constant flow of money leeched from the real economy.

 

[Horatio Parker]

Fascinating to me were his insights regarding Adam Smith:

If you read Adam Smith and subsequent classical economists, you see that their main concern was to distinguish between productive and unproductive economic activity. They wanted to isolate unproductive rentier income, and unproductive spending and credit.

To do this, they developed the labor theory of value to distinguish value from price – with “economic rent” being the excess of price over socially necessary costs of production. They wanted to free industrial capitalism from the legacy of feudalism: tax-like ground rent paid to a hereditary landed aristocracy. They also opposed the monopolies that bondholders had insisted that governments create to sell off to pay the public debt. That was why the East India Company and the South Sea Company were created with their special privileges.

Smith and his followers are applauded as the founding fathers of “free market” economics. But they defined free markets in a diametrically opposite way from today’s self-proclaimed neoliberals. Smith and other classical economists urged markets free from economic rent.

These classical reformers realized that progressive taxation to stop favoring rentiers required a government strong enough to take on society’s most powerful and entrenched vested interests. The 19th-century drive for Parliamentary reform in Britain aimed at enabling the House of Commons to override the House of Lords and tax the landlords. (This rule finally passed in 1910 after a constitutional crisis.) Now there has been a fight by creditors to nullify democratic politics, most notoriously in Greece.

Today’s neoliberals define free markets as those free for rent-seekers and predatory bankers from government regulation and taxes.

No wonder the history of economic thought has been stripped away from the curriculum. Reading the great classical economists would show how the Enlightenment’s reform program has been inverted. The world is now racing down a road to the Counter-Enlightenment, a neo-rentier economy that is bringing economic growth to a halt.

 

[SimpleDon]

Fascinating to me were his insights regarding Adam Smith:

If you read Adam Smith and subsequent classical economists, you see that their main concern was to distinguish between productive and unproductive economic activity. They wanted to isolate unproductive rentier income, and unproductive spending and credit.

To do this, they developed the labor theory of value to distinguish value from price – with “economic rent” being the excess of price over socially necessary costs of production. They wanted to free industrial capitalism from the legacy of feudalism: tax-like ground rent paid to a hereditary landed aristocracy. They also opposed the monopolies that bondholders had insisted that governments create to sell off to pay the public debt. That was why the East India Company and the South Sea Company were created with their special privileges.

Smith and his followers are applauded as the founding fathers of “free market” economics. But they defined free markets in a diametrically opposite way from today’s self-proclaimed neoliberals. Smith and other classical economists urged markets free from economic rent.

These classical reformers realized that progressive taxation to stop favoring rentiers required a government strong enough to take on society’s most powerful and entrenched vested interests. The 19th-century drive for Parliamentary reform in Britain aimed at enabling the House of Commons to override the House of Lords and tax the landlords. (This rule finally passed in 1910 after a constitutional crisis.) Now there has been a fight by creditors to nullify democratic politics, most notoriously in Greece.

Today’s neoliberals define free markets as those free for rent-seekers and predatory bankers from government regulation and taxes.

No wonder the history of economic thought has been stripped away from the curriculum. Reading the great classical economists would show how the Enlightenment’s reform program has been inverted. The world is now racing down a road to the Counter-Enlightenment, a neo-rentier economy that is bringing economic growth to a halt.

The Wealth of Nations ... et al was aimed at Mercantilism, what we would call "crony capitalism" today. Smith wasn't saying that the government should be removed from the oversight of the economy, he was saying just the opposite, that the government has to take an adversarial role and to police, that is, regulate, the market and to stop being a partner with business, to stop sharing in their profits.

Among other misconceptions about Smith and his economics, the invisible hand wasn't referring to supply and demand setting prices, it was used to assert that there is no reason to fear free trade because citizens of a country will always buy the products made in their own country and not the like product that is imported. That this preference for the domestic product asserts itself as if guided by an invisible hand. Obviously he was wrong about this.

Smith realized what every businessman knows that prices aren't set by supply and demand but are set based on the cost of production plus a markup to provide a profit. He believed that only the labor in the product gives it value, that any price above the labor value is rent. This includes profit.

He believed that the greatest threat to capitalism would come from the banks and the equity markets, not from the government. This is correct, as we have seen repeatedly.

And he opposed the very idea of a corporation, what was then called syndication, the selling of stock in a business to absentee owners. He thought that it would result in businesses that would be run by owners who don't understand the business and didn't know the customers and the employees. He didn't foresee the development of professional managers to run the businesses.

 

[Harry Bosch]

An interview with Michael Hudson:



http://www.nakedcapitalism.com/2016...conomy-and-the-coming-financial-cold-war.html

Without a doubt the largest number of rent seekers are in the financial sector and among the "investor class."

The stock market, for example, was an important part of the capitalist system two hundred years ago. It was the primary source of investment for large scale businesses, both for start ups and for businesses wishing to expand.

But, and this will be news to mainstream neoclassical economists so don't tell them, a lot has changed in the last two hundred years in the economy.

Existing corporations don't use the stock market as a source of investment capital any more and haven't for a hundred years. And likewise start up companies don't go to the stock market to raise their initial investment.

Existing companies retain earnings, profits, to fund expansions, new factories, research and development of new products or new processes to produce existing products more efficiently. If not from retained earnings then the corporation will borrow the money by issuing bonds or as a last resort taking out a loan from a bank.


No one in the stock market has the expertise to properly evaluate an idea for a modern start up company.

I looked into the numbers for these questions in another thread with Loren. In 2015 the total amount of IPOs offered in the year in American stock market was 80 billion dollars. This is a lot of money, for sure, but it pales in comparison to a single day's trading in the stock markets, much less compared to the entire year's trading. And IPOs are not for start ups, they are for private companies going public when the private owners want to cash out of the business. SEOs, secondary stock (equity) offerings are so rare that I couldn't find any estimate of them, only a statement that they are at least two orders of magnitude less than the amount IPOs.

Loren believes that the Venture Capitalists funds are an example of the stock market providing investment capital for start up companies. While VC funds are separate from the stock markets the markets do provide liquidity for the VC funds. But this is through the IPOs already covered here. And VC funds provide investment to only about 1% of all of the businesses started in a year.

So the stock market no longer provides any meaningful amount of investment capital to industry.

What it does do is to divert large amounts of money from the economy into the stock markets, an estimated one trillion dollars in 2015, in the form of dividends and stock buybacks, meant to boost the stock prices of the companies.

One trillion dollars that could been used for meaningful, real investment, for higher wages, or for the many underfunded but vital government services, education, research, infrastructure, etc.

Increasingly we have two separate economies. The economy of providing goods and services for consumption, the real economy that all of us depend on for our livelihood. And an economy whose products are nothing more than paper and promises. An economy whose main arena is little more than a huge casino, where one person's profits are another person's loss. Where growth, so-called capital gains, depends on a constant flow of money leeched from the real economy.

Wow, it's rare for me to disagree with you, but sure do here! Have you ever worked for a large corporation? The share price of a stock is the driving force for most publically traded companies. The reason is that most workers and managers usually own some shares. As the shareholder value goes up, the managers and workers in the corporation have higher stock portfolios. They become happier. When share prices are up, companies receive lower interest rates on their bank loans; they attract larger bank loans, it's easier to attract additional rounds of financing in order to expand and hire more workers. Higher share prices means that it's more difficult for a hostile takeover. In most cases, hostile takeovers means large layoffs coming. Generally, when a company's share price is increasing, it's more willing to hire more workers, pay workers more, expand their operations, invest in RnD and equipment, and etc. and etc. SP is extremely important for publically traded companies.

 

[SimpleDon]

I am going through my text editor's cache and finding a whole lot of responses that for one reason or another I didn't post. Usually, because they got too long and drifted off of the subject. For some reason this is a less compelling reason to me today. Possibly because it is a beautiful spring day and my hayfever is letting up.

Without a doubt the largest number of rent seekers are in the financial sector and among the "investor class."

The stock market, for example, was an important part of the capitalist system two hundred years ago. It was the primary source of investment for large scale businesses, both for start ups and for businesses wishing to expand.

But, and this will be news to mainstream neoclassical economists so don't tell them, a lot has changed in the last two hundred years in the economy.

Existing corporations don't use the stock market as a source of investment capital any more and haven't for a hundred years. And likewise start up companies don't go to the stock market to raise their initial investment.

Existing companies retain earnings, profits, to fund expansions, new factories, research and development of new products or new processes to produce existing products more efficiently. If not from retained earnings then the corporation will borrow the money by issuing bonds or as a last resort taking out a loan from a bank.


No one in the stock market has the expertise to properly evaluate an idea for a modern start up company.

I looked into the numbers for these questions in another thread with Loren. In 2015 the total amount of IPOs offered in the year in American stock market was 80 billion dollars. This is a lot of money, for sure, but it pales in comparison to a single day's trading in the stock markets, much less compared to the entire year's trading. And IPOs are not for start ups, they are for private companies going public when the private owners want to cash out of the business. SEOs, secondary stock (equity) offerings are so rare that I couldn't find any estimate of them, only a statement that they are at least two orders of magnitude less than the amount IPOs.

Loren believes that the Venture Capitalists funds are an example of the stock market providing investment capital for start up companies. While VC funds are separate from the stock markets the markets do provide liquidity for the VC funds. But this is through the IPOs already covered here. And VC funds provide investment to only about 1% of all of the businesses started in a year.

So the stock market no longer provides any meaningful amount of investment capital to industry.

What it does do is to divert large amounts of money from the economy into the stock markets, an estimated one trillion dollars in 2015, in the form of dividends and stock buybacks, meant to boost the stock prices of the companies.

One trillion dollars that could been used for meaningful, real investment, for higher wages, or for the many underfunded but vital government services, education, research, infrastructure, etc.

Increasingly we have two separate economies. The economy of providing goods and services for consumption, the real economy that all of us depend on for our livelihood. And an economy whose products are nothing more than paper and promises. An economy whose main arena is little more than a huge casino, where one person's profits are another person's loss. Where growth, so-called capital gains, depends on a constant flow of money leeched from the real economy.

Wow, it's rare for me to disagree with you, but sure do here! Have you ever worked for a large corporation? The share price of a stock is the driving force for most publically traded companies. The reason is that most workers and managers usually own some shares. As the shareholder value goes up, the managers and workers in the corporation have higher stock portfolios. They become happier. When share prices are up, companies receive lower interest rates on their bank loans; they attract larger bank loans, it's easier to attract additional rounds of financing in order to expand and hire more workers. Higher share prices means that it's more difficult for a hostile takeover. In most cases, hostile takeovers means large layoffs coming. Generally, when a company's share price is increasing, it's more willing to hire more workers, pay workers more, expand their operations, invest in RnD and equipment, and etc. and etc. SP is extremely important for publically traded companies.

All of that is true, stockholders are happier when the Stock price is going up. But what is the cause and effect here. I say that the stock price increases because the company is successful. Not that the company enjoys any benefit from an increasing stock price. The stockholders earn the capital gains from an increasing stock price, not the company. In fact the company is expected to earn earnings in portion to its current stock price without enjoying any of the benefits.

In order for the company to benefit from higher stock price they would have to sell reserve stock, stock owned by the corporation. This is a non-dilutive secondary equity offering. Or they would have issue new stock and sell it. This is a dilutive secondary equity offering, because it would reduce the value of all of the company's stock.

I have just been thinking about this. I don't have any references for this. It seems to be the words that no one wants to utter. I certainly don't like this. I own a lot of stock and always felt that I was investing in the economy and in the nation. I don't like the thought that I am essentially doing nothing more than placing side bets on the performance of a company. But I don't see any other way that the company benefits from an increasing stock price.

I was a sub-C suite executive of a one billion euro a year German company. I had the title of director, one of many, but on the executive board of directors, not the supervisory board. In the US I probably would have been a vice president.

Now a German corporation is a little different than an American one. In Germany the stockholders are just considered to be on equal footing with the other stakeholders in the company, the employees and the social good of the nation. All executive decisions have to take the interests of all three into account equally.

So yes, I have worked for a large corporation. My only other job was in the military.

It occurred to me that there is another way that a company can profit from a high share price, if they buy another company with a stock swap. If they issue new stock or use reserve stock and swap it for the stock of the company that they are buying. But this isn't new job creating investment. The target company existed before the sale. You can say that the sale wouldn't be made unless it was mutually beneficial, but I would be willing to bet that overall the record of company buyouts is at best a wash.