I highly doubt it. How?
She’s unveiling a bill to make corporate governance great again.
You mean like the capricious and burdensome regulatory millstone around the necks of business that caused the Obama years to suck so much?
Elizabeth Warren has a big idea that challenges how the Democratic Party thinks about solving the problem of inequality.
Let’s be clear on this. Inequality is part of capitalism. You can’t get rid of it as long as there are differences in people. A person’s income is (usually) tied to the economic value they provide for society. Those with more talent or skill or drive create more value and make more money.
I would have liked to get a $4 million signing bonus out of high school like Lebron James, but I am not into sports and didn’t have the skill he does. I could be resentful that he has made over $200 million bouncing a ball, but instead I focus on the things that I can do to improve my skills and make myself more valuable to society.
I’ve seen the bottom end of the income curve. These are the people at McDonald’s who can’t make exact change without a the cash register. There is a reason they are only worth $8/hour. It has something do with needed pictures on the register buttons and how easily they are replaced with a touch screen.
I get it, what I said sounds cruel. But what is the other side of the coin? It’s taking the people who do work and contribute and demand that they support not just themselves, but everyone who is lazy or unwilling to improve themselves. That is worse. That turns the hard worker in to a slave of the indolent.
Back to the article.
Instead of advocating for expensive new social programs like free college or health care, she’s introducing a bill Wednesday, the Accountable Capitalism Act, that would redistribute trillions of dollars from rich executives and shareholders to the middle class — without costing a dime.
Impossible. I have no better way to say it. Impossible.
Warren’s plan starts from the premise that corporations that claim the legal rights of personhood should be legally required to accept the moral obligations of personhood.
So we’re regulating morality now? Tell me dear Liberals, what moral standards of personhood are we using here? In California they allow people to shit in the streets but condemn the middle class for complaining about it. Just how moral is that?
Traditionally, she writes in a companion op-ed for the Wall Street Journal, “corporations sought to succeed in the marketplace, but they also recognized their obligations to employees, customers and the community.” In recent decades they stopped, in favor of a singular devotion to enriching shareholders. And that’s what Warren wants to change.
Shareholders are investors. They make it possible for companies to grow. If you de-prioritize the shareholders, they won’t invest. Shareholder needs to stop being used as a dehumanized dirty word. I am a shareholder. I have a retirement account that is invested and someone somewhere is doing their best to make my money grow for me.
That said, if you want to help employees and companies, I’m all for policies that set aside stock for employees so that employees have partial ownership. Employee-owners generally have better performance, are more dedicated, and have higher job satisfaction.
You want good policy, create a tax incentive for companies to provide stock to employees.
The new energy on the left is all about making government bigger and bolder, an ideal driven by a burgeoning movement toward democratic socialism. It’s inspired likely 2020 Democratic contenders to draw battle lines around how far they’d go to change the role of government in American life.
So Vox want’s to save capitalism with socialism.
Warren supports expanding many of the programs in play, and she’s voted to do so. But the rollout of her bill suggests that as she weighs whether to get into the presidential race, she’ll focus on how to prioritize workers in the American economic system while leaving businesses as the primary driver of it.
Warren wants to eliminate the huge financial incentives that entice CEOs to flush cash out to shareholders rather than reinvest in businesses. She wants to curb corporations’ political activities. And for the biggest corporations, she’s proposing a dramatic step that would ensure workers and not just shareholders get a voice on big strategic decisions.
Pretty sure shareholders who get high payouts will continue to invest in that business. That’s the idea, to encourage investment.
Warren hopes this will spur a return to greater corporate responsibility, and bring back some other aspects of the more egalitarian era of American capitalism post-World War II — more business investment, more meaningful career ladders for workers, more financial stability, and higher pay.
Equally a good idea: we could bomb most of the rest of the world back into post-WWII poverty and destitution. We didn’t have to worry about the Chinese making cheap goods competing with American workers when 50 Million of them were being starved to death by Mao.
The conceit tying together Warren’s ideas is that if corporations are going to have the legal rights of persons, they should be expected to act like decent citizens who uphold their fair share of the social contract and not act like sociopaths whose sole obligation is profitability — as is currently conventional in American business thinking.
Warren wants to create an Office of United States Corporations inside the Department of Commerce and require any corporation with revenue over $1 billion — only a few thousand companies, but a large share of overall employment and economic activity — to obtain a federal charter of corporate citizenship.
So… nationalize corporate America with a smile. If you need a special federal carter to engage in business, you’ve been nationalized.
Also, bullshit to the $1 Billion in revenue being only a few thousand companies. Maybe over a Billion in profit, but I work for a company with a few hundred employees and we scratched $1 Billion in a good year.
The charter tells company directors to consider the interests of all relevant stakeholders — shareholders, but also customers, employees, and the communities in which the company operates — when making decisions. That could concretely shift the outcome of some shareholder lawsuits but is aimed more broadly at shifting American business culture out of its current shareholders-first framework and back toward something more like the broad ethic of social responsibility that took hold during WWII and continued for several decades.
Business executives, like everyone else, want to have good reputations and be regarded as good people but, when pressed about topics of social concern, frequently fall back on the idea that their first obligation is to do what’s right for shareholders. A new charter would remove that crutch, and leave executives accountable as human beings for the rights and wrongs of their own decisions.
How? How will this work? Tell me exactly. Which bureaucrat has the power to decided that Company A is not meeting its social obligations?
I’m going to skip through most of the middle of this article because it is a long one. The big take-aways are that the stock market is bad because of wealth inequality and the goverment needs a lot more power to micromanage business.
Once we get out of the weeds, we get back to the core of the Vox thesis:
What’s more, while the codetermination aspect of Warren’s proposal does draw inspiration from Germany, fundamentally, the pitch for the overall package is a lot closer to “Make America Great Again” than to “make America like Scandinavia.” The basic notion is that the American private sector used to operate in a better, more inclusive way before the rise of shareholder supremacy and with a couple of firm regulatory kicks we can get it to work that way again.
No it’s not. It mires business with the two worst things business that be mired in. First, goverment regulation. Second, giving low level employees high level decision making authority. I’ve seen what hourly people on the assembly line can do to screw up production. Some person making minimum wage takes violates SOP and takes a short cut and now we have to scrap out or rework half a day’s worth of products. Elevating these people to corporate decision level making is a terrible idea. I respect these people for what they do, but this is how you end up with suggestions in the corporate suggestion box that (this really happened) the CEO takes a pay cut and the vending machines in the break room are made free for workers.
My late grandfather, who was an old-line communist in his day, used to tell me with mixed admiration and regret that FDR had saved capitalism by entrenching institutions that guaranteed broadly shared prosperity. Those institutions, fundamentally, are what was undone in the shareholder value revolution.
I wouldn’t brag that I my family member was an old line communist. I’d hide that shame away and not talk about grandpa ever again.
It’s like that joke. One couple is talking to another they haven’t seen in a while.
Guy: “And how is daughter? She should be done with college about now?”
Dad: “Umm… she moved out to Nevada to be a stripper. Last we heard she’s going to be going to work for the Bunny Ranch.”
Mom: “No she’s not, why would you say that about your little girl?”
Dad: “Actually she got a degree in Women’s Studies and is now working for the Bernie Sanders campaign, but I was too embarrassed to say that.”
Warren’s bet is that at a time when the political right is increasingly not even bothering to pretend to offer economic solutions anymore, America can pull off the same trick a second time — offering the public not a huge new expansion of government programs, but a revival of the midcentury stakeholder capitalism that once built a middle class so prosperous that the idea of surging mass interest in socialism was unthinkable.
This is not a solution. This is “friendly” communism. This is the nationalization of industry through a license scheme instead of by force. Micromanaging corporations for economic redistribution is more communist than a high tax social welfare program.
Vox has come out against Democratic Socialism for “old line” Communism as though that is better.