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LONGER UNEMPLOYMENT LINES HELP WALL STREET'S BOTTOM LINE

When the Fogtown Door Knob Company announced the layoff of 18,000 workers, there was no joy in Fogtown, but Wall Street was elated.

John Allen, the door-knob specialist at Gobble and Gobble Securities, told me, "This is a step in the right direction, and Wall Street is very pleased with the action that Fogtown has taken to get its financial house in order. Of course, there's a lot more to be done. Fogtown still has 980 people on its payroll, and we will not be convinced that management is serious until all of those employees go, too.""But if they have nobody working at the plant, they won't be able to make doorknobs."

"It doesn't matter. We have to think of the stockholders. Their interests must be served, even if it means chopping the payroll into sawdust."

I then asked an embarrassing question. "Does Wall Street ever lose any sleep over the people who are laid off in a cost-cutting drive?"

John said, "We're not insensitive to the plight of workers being sent home. But we're coming at the issue from a different viewpoint. We want to know what it's going to cost the company to fire all its employees. If the settlement is too expensive, Wall Street will react negatively. But if it's in the layoff ballpark, we'll recommend a buy for Fogtown stock. When a company purges the bottom line, how are the investors protected?"

"Suppose Fogtown Door Knobs is unable to fulfill its orders with a limited number of employees?"

"Then it will have to produce them in Mexico. Wall Street never objects to manufacturing a product abroad as long as the dividends are increased over the previous quarter."

"By the way, who are all these investors?"

"Look, we service billion-dollar pension funds that depend on us to produce income."

"Are these large pension funds bothered when thousands of people are laid off?"

"There's no connection between the two. Wall Street was the first to discover that in today's capitalist world, a person does not need workers to make lots of money."

"Doesn't Fogtown need salaried people to buy the doorknobs it makes?"

"We don't need people any more. Everything is bought by computer."