Tuesday, November 22, 2011

Another Example Of The 1% Gig

When Pfizer cut its research budget this year and laid off 1,100 employees, it was not because the company needed to save money.

In fact, the drug maker had so much cash left over, it decided to buy back an additional $5 billion worth of stock on top of the $4 billion already earmarked for repurchases in 2011 and beyond.

The moves, announced on the same day, might seem at odds with each other, but they represent an increasingly common pattern among American corporations, which are sitting on record amounts of cash but insist that growth opportunities are hard to find.


There has been a steady drumbeat of other companies laying off workers even as they have disclosed plans to buy back more stock. On June 23, Campbell Soup said it would buy back $1 billion in stock; five days later it announced plans to eliminate 770 jobs. Hewlett-Packard announced a $10 billion stock repurchase in July, and jettisoned 500 jobs in September after it discontinued its TouchPad and smartphone product lines.

Read more here. So, if you are wondering why the Occupy movement is so concentrated on the 1%, stories like this should jog your brain a bit. It also helps identify certain products not to buy anymore, like Campbell's soup! Spending one billion dollars in stock buy backs for its shareholders and officers, at the expense of 770 real people who no longer have a job with that company, now there's a grand American gesture, and a lesson in how the rich stay rich.

And, in another bit of irony, the law firm that became famous over Halloween for their office party (the firm specialized in foreclosures, and the theme of the office party was, well, being homeless after you lost your house in foreclosure) had to close their doors thanks to all the fun publicity!

A law firm that had become a lightning rod in the controversy over mortgage-foreclosure practices has shut down, costing 89 employees their jobs.

The Steven J. Baum P.C. law firm, which has offices in Amherst, N.Y., and Westbury, N.Y., has filed papers with government agencies notifying them that it plans to close. It made the filings under a federal law requiring employers to provide notice before mass layoffs.


...the firm’s fortunes worsened this month after The New York Times published photos of a Halloween party at the Baum firm showing employees wearing costumes mocking people who had lost their homes.

After those photos surfaced, the mortgage giants Freddie Mac and Fannie Mae cut off the Baum firm, forbidding servicers of their mortgages from using Mr. Baum and his colleagues. That effectively served as the firm’s death knell.

For more pictures, see here.

And you wonder why the 99% are angry? You still think this class war thing is non-existent? What mentality has to prevail such that a firm that makes its living out of kicking people off their property, hosts a party whose theme is to mock the very people they've made homeless? Apparently, in an email to the guy at the NYT that broke the story, Mr. Baum himself had this to say:

“Mr. Nocera — You have destroyed everything and everyone related to Steven J. Baum PC,” said the letter. “It took 40 years to build this firm and three weeks to tear down.”


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