Jack Welch himself [CEO of GE’s enormous rise in value, after seeing it plummet in the years after his departure] came to be one of the strongest critics of shareholder value. On March 12, 2009, he gave an interview with Francesco Guerrera of the Financial Times and said, “On the face of it, shareholder value is the dumbest idea in the world. Shareholder value is a result, not a strategy… your main constituencies are your employees, your customers and your products. Managers and investors should not set share price increases as their overarching goal… Short-term profits should be allied with an increase in the long-term value of a company.”
What’s creepy is how much of what’s wrong with the US was born in a very short period of the early 1970’s. Milton Friedman proposing shareholder value is king, Arthur Laffer sketching his curve “proving” supply side works on a napkin for Rumsfeld and Cheney, and the last 2 helping to create the Neocon movement.
