5 ms·

Elizabeth Warren unveils bold new plan to reshape American capitalism

35 points by deegles 8y ago

bgorman 8y ago
This bill seems like it forces socialism/command economy on all companies valued greater than 1 billion dollars. It is amazing something like this came from a United States senator. The worst thing about stuff like this is that is socialism is hard to dispell in sound bites. Unfortunately millennials do not remember the Soviet Union.
- craftyguy 8y ago
  > Unfortunately millennials do not remember the Soviet Union. You don't have to 'remember' something in order to understand its impact. In fact, having the hindsight of history may be more beneficial to understanding something than living in the moment and having your experiences impacted by your emotions at the time. An individual's memory is also not very reliable, so there's that too. That said, this new plan sounds extremely heavy handed.
- spamizbad 8y ago
  > Unfortunately millennials do not remember the Soviet Union. Unless there's a sustained period of economic prosperity similar to what followed WWII, socialism will continue to gain support among Millennials. Most of the warnings around socialism sound similar to those we've heard about illegal drugs: "I smoked one weed and it ruined my life" = "I put in modest regulation and now it's the Soviet Union" Edit: Specifically, unless Millennials experience some measure of sustained economic growth and stability, derived from capitalism, socialism will likely continue to rise in popularity. Capitalism is in need of a better argument than "If you think free markets are bad, wait till you see communism!"
  - justboxing 8y ago
    > "I smoked one weed and it ruined my life" "one bud" or "one blunt" or "one roll" not "one weed".
    - spamizbad 8y ago
      ... that was the joke.
      - justboxing 8y ago
        Oops. Guess the joke's on me now ROFL.
  - ethbro 8y ago
    > Unless there's a sustained period of economic prosperity similar to what followed WWII Economic prosperity isn't the most unique feature post-WWII: severely flattened income inequality is. I.e. the top 10% going from ~45% income share in 1937 to ~33% from 1942-77.
    - spamizbad 8y ago
      Sorry, i should be more specific: "Unless a majority of Millennials begin to experience a measure of sustained economic prosperity..."
      - ethbro 8y ago
        Functionally equivalent. I was just cart / horsing to include a possible cause vs an effect.
- scroot 8y ago
  This is nothing like a command economy.
- tribesman 8y ago
  If something like this really happens, then all FDI holders will suck money out of the US and dollar will decline and no longer will be world's currency. So, this is very unlikely.
  - cannonedhamster 8y ago
    The dollar is already losing the battle to maintain its status as the world's currency. The current administration policy of hostility towards our European allies has increased flight from the dollar. China's ascendancy will continue that flight until the inevitable US/China/Russia war.
- dragonwriter 8y ago
  > This bill seems like it forces socialism/command economy on all companies valued greater than 1 billion dollars In that it gives some voice to workers in direction of firms, it could kinda-sorta be seen as a kind of socialism, but since the firms actual decisions are made internally and not by an external central planner, it's not anything like a command economy. > The worst thing about stuff like this is that is socialism is hard to dispell in sound bites. I dunno, the American Right usually does a good enough job (even against things that aren't socialism) with just “socialism” repeated over and over as the soundbite, with no additional substance. That might be changing over time in a demonstration of the “little boy who cried wolf” effect, though. > Unfortunately millennials do not remember the Soviet Union I'm not a millennial, and I quite clearly recall that the Soviet Union was not exactly known for large private joint stock companies with a minority voice for workers in choosing directors. So, I can see that not remembering the USSR is a problem here, though not in the way you seem to be concerned about.
- notacoward 8y ago
  > This bill seems like it forces socialism/command economy on all companies valued greater than 1 billion dollars That's an absolute caricature of what the bill does. It doesn't mandate what products or services companies can provide, how they charge for those services, what deals they make, etc. There's none of the fine-grained control that a real command economy would entail. All it does is change the operative definition of fiduciary duty to include people besides shareholders who are affected by a company's actions. There are both moral and practical justifications for this. The moral justification is that it's unfair to give corporations every advantage given to real flesh-and-blood people, while also preserving their natural advantages - immortality, immunity to imprisonment for crimes, and most pertinently limitation of liability. The natural state of the market does not include limited liability. In order for the state to extend that favor to corporations (by extension to their principals and shareholders) there must be some compelling benefit to the people the state represents, otherwise it's not a deal but a steal. Historically, when corporations were first created, it was on the basis of a charter spelling out the nature of that benefit and holding them accountable for its realization (e.g. to build a road, bridge, or canal). That brings us to the practical justification. The lack of such charters has empirically been very bad for the middle class, for the environment, for political stability, etc. In short, the grantors of these favors - the people behind the government that defines and enforces civil law - are not getting their money's worth. They're giving and not getting, even more so when the benefits can flow overseas while the costs stay here. Once government starts doing favors for corporations without expecting anything back, what you have is neither democracy nor capitalism but oligarchy. Since you made the mistake of mentioning the Soviet Union, all I need do is point to its successor state for an example. It's a bad deal, and it's bad policy. Enforceable limited charters are long overdue for a comeback. P.S. I'm no millennial. I'm a very early GenX if you must know. What that means is that I've had time to study this stuff at more than a superficial level, so your well-poisoning is entirely off target.
jbob2000 8y ago
As much as I like what Elizabeth Warren says and stands for, it seems that she has absolutely no power to get anything done. So much so, that whenever I see her name in a headline, I know to avoid the article because it's all fluff and nothing will come of it.
- bmm6o 8y ago
  Passing legislation now is not the reason she is proposing this. By the time the Democrats have the votes to even make passing this a possibility, it will no longer be a new idea and won't seem to radical.
  - jbob2000 8y ago
    That’s a huge list of assumptions. I’m really surprised I’m getting downvotes for this. The bill she proposes simultaneously pisses off big business and the right wing. There is absolutely no way this legislation is getting through, it’s just pandering for the media.
    - bryanlarsen 8y ago
      This is essentially a discussion piece / proposal for the 2020 Democratic election platform.
    - bmm6o 8y ago
      I'm not sure what "huge list of assumptions" you are referring to, merely the idea that she knows this can't pass today? I think putting these ideas out there in concrete form is a fine approach. If she wanted to "pander to the media" she could have just come up with a slogan with nothing behind it. An actual proposal that can be debated is the opposite of pandering to the media. "Repeal and Replace" as the entirety of your proposal is pandering to the media.
  - dragonwriter 8y ago
    > Passing legislation now is not the reason she is proposing this Now, sure. After the midterms... Maybe a different story (at least in terms of getting it to President's desk), depending on how they turn out. Sure, not all of it will survive the process, but if the only substantive restriction that accompanied the charter was the political spending rule, Democrats would love to put Trump in the position where he'd have to either sign or veto that.
news_to_me 8y ago
A couple things stood out to me in this article: > "The private market will reward those that take care of their stakeholders" (Kevin Kelly) One of Warren's main points is that this is visibly not true: "Real wages have stagnated even as productivity has continued to rise" > “What she’s talking about is freezing the economy as it is, keeping things as they are." (Steve Forbes) Unsubstantiated. I'd like to see an explanation of how this could be true. I'd really like to see these conservative-corporate types actually defend their positions sometime without resorting to "socialism is bad!" or "the economy will falter!", which are just bogeyman arguments.
- smacktoward 8y ago
  > > “What she’s talking about is freezing the economy as it is, keeping things as they are." (Steve Forbes) Give him some credit though, it takes real nerve to argue against big changes by saying they wouldn't change anything!
- belltaco 8y ago
  I guess stakeholders in the Kevin quote refers to shareholders rather than employees or public interest. No wonder they want to kill the EPA.
benjohnson 8y ago
She should go ahead and see how it worrks. Nothing stopping her from starting her own company that voluntarily follows her rules. However, the fact that it seems like she want to force others to follow her rules rather than embark on her own creation tells me that she understands there some flaws in her idea.
- news_to_me 8y ago
  I guess you don't have a great grasp on the concept of government, then.
thatswrong0 8y ago
$1 billion in revenue seems like an odd choice. If you have low margins and large numbers of sales, you could easily be hitting $1 billion in annual revenue with, say, ~500 employees. And your profits might not even be that high. Why not set it to $X of profit? Or $X profit per employee? Anyway, I see no co-sponsors, so the purpose of this is probably to just be a talking point during the 2020 primaries.
- 394549 8y ago
  > Why not set it to $X of profit? Probably because management can deliberately reduce profit, and realize shareholder gains in other ways. Amazon famously had very small profits over a long period of time because it reinvested all of its revenues back into its business: https://qz.com/987559/charted-amazons-amzn-profitless-path-to-world-domination-over-the-past-20-years/ https://qz.com/987559/charted-amazons-amzn-profitless-path-t... https://qz.com/1196256/it-took-amazon-amzn-14-years-to-make-as-much-net-profit-as-it-did-in-the-fourth-quarter-of-2017/ https://qz.com/1196256/it-took-amazon-amzn-14-years-to-make-...
  - thatswrong0 8y ago
    > Amazon famously had very small profits over a long period of time because it reinvested all of its revenues back into its business That's very different from deliberately reducing profit for the sake of the shareholders though. Making capital investments for the sake of growing a company.. should be desired, no?
    - news_to_me 8y ago
      It's hard to legislate that distinction without getting messy, though. Hollywood, for example, is famous for the tax hoops they jump through to make it look like blockbusters lose money so they can avoid taxes.
      - thatswrong0 8y ago
        From a top Quora answer: > Hollywood accounting isn't about avoiding taxes, studios still pay taxes on revenue whether a film makes a dollar or a billion dollars. > What hollywood accounting does is shift costs around to avoid paying royalties and avoid contractual obligations of profit sharing. I really don't think dealing with profit vs. revenue would be messy at all.
ilove_banh_mi 8y ago
What is the principle behind the $1 billion revenue cut-off? why not simply regulate all corporations with more than N employees, say 10 employees?
- news_to_me 8y ago
  I haven't read the legislation, but I assume the intent is to target companies with an outsized influence on the economy. It makes sense to me that the institutions that have the most influence on society should be somewhat under society's control.
shiburizu 8y ago
Wasn't the whole problem with a lot of utility/service providers people hate nowadays that they have government charters that mandate their dominance in the field?
- dragonwriter 8y ago
  This isn't a government monopoly, it's more like a license.
Justsignedup 8y ago
Wait, she's positioning to be the 2020 candidate? I mean I'd vote for her in a heartbeat, but I thought she explicitly stated she didn't want it. But I guess great leaders don't want leadership, leadership is requested of them.
dang 8y ago
Discussed at https://news.ycombinator.com/item?id=17766031 https://news.ycombinator.com/item?id=17766031

35 points by deegles 8y ago

This bill seems like it forces socialism/command economy on all companies valued greater than 1 billion dollars. It is amazing something like this came from a United States senator. The worst thing about stuff like this is that is socialism is hard to dispell in sound bites. Unfortunately millennials do not remember the Soviet Union.

craftyguy 8y ago
> Unfortunately millennials do not remember the Soviet Union. You don't have to 'remember' something in order to understand its impact. In fact, having the hindsight of history may be more beneficial to understanding something than living in the moment and having your experiences impacted by your emotions at the time. An individual's memory is also not very reliable, so there's that too. That said, this new plan sounds extremely heavy handed.
spamizbad 8y ago
> Unfortunately millennials do not remember the Soviet Union. Unless there's a sustained period of economic prosperity similar to what followed WWII, socialism will continue to gain support among Millennials. Most of the warnings around socialism sound similar to those we've heard about illegal drugs: "I smoked one weed and it ruined my life" = "I put in modest regulation and now it's the Soviet Union" Edit: Specifically, unless Millennials experience some measure of sustained economic growth and stability, derived from capitalism, socialism will likely continue to rise in popularity. Capitalism is in need of a better argument than "If you think free markets are bad, wait till you see communism!"
- justboxing 8y ago
  > "I smoked one weed and it ruined my life" "one bud" or "one blunt" or "one roll" not "one weed".
  - spamizbad 8y ago
    ... that was the joke.
    - justboxing 8y ago
      Oops. Guess the joke's on me now ROFL.
- ethbro 8y ago
  > Unless there's a sustained period of economic prosperity similar to what followed WWII Economic prosperity isn't the most unique feature post-WWII: severely flattened income inequality is. I.e. the top 10% going from ~45% income share in 1937 to ~33% from 1942-77.
  - spamizbad 8y ago
    Sorry, i should be more specific: "Unless a majority of Millennials begin to experience a measure of sustained economic prosperity..."
    - ethbro 8y ago
      Functionally equivalent. I was just cart / horsing to include a possible cause vs an effect.
scroot 8y ago
This is nothing like a command economy.
tribesman 8y ago
If something like this really happens, then all FDI holders will suck money out of the US and dollar will decline and no longer will be world's currency. So, this is very unlikely.
- cannonedhamster 8y ago
  The dollar is already losing the battle to maintain its status as the world's currency. The current administration policy of hostility towards our European allies has increased flight from the dollar. China's ascendancy will continue that flight until the inevitable US/China/Russia war.
dragonwriter 8y ago
> This bill seems like it forces socialism/command economy on all companies valued greater than 1 billion dollars In that it gives some voice to workers in direction of firms, it could kinda-sorta be seen as a kind of socialism, but since the firms actual decisions are made internally and not by an external central planner, it's not anything like a command economy. > The worst thing about stuff like this is that is socialism is hard to dispell in sound bites. I dunno, the American Right usually does a good enough job (even against things that aren't socialism) with just “socialism” repeated over and over as the soundbite, with no additional substance. That might be changing over time in a demonstration of the “little boy who cried wolf” effect, though. > Unfortunately millennials do not remember the Soviet Union I'm not a millennial, and I quite clearly recall that the Soviet Union was not exactly known for large private joint stock companies with a minority voice for workers in choosing directors. So, I can see that not remembering the USSR is a problem here, though not in the way you seem to be concerned about.
notacoward 8y ago
> This bill seems like it forces socialism/command economy on all companies valued greater than 1 billion dollars That's an absolute caricature of what the bill does. It doesn't mandate what products or services companies can provide, how they charge for those services, what deals they make, etc. There's none of the fine-grained control that a real command economy would entail. All it does is change the operative definition of fiduciary duty to include people besides shareholders who are affected by a company's actions. There are both moral and practical justifications for this. The moral justification is that it's unfair to give corporations every advantage given to real flesh-and-blood people, while also preserving their natural advantages - immortality, immunity to imprisonment for crimes, and most pertinently limitation of liability. The natural state of the market does not include limited liability. In order for the state to extend that favor to corporations (by extension to their principals and shareholders) there must be some compelling benefit to the people the state represents, otherwise it's not a deal but a steal. Historically, when corporations were first created, it was on the basis of a charter spelling out the nature of that benefit and holding them accountable for its realization (e.g. to build a road, bridge, or canal). That brings us to the practical justification. The lack of such charters has empirically been very bad for the middle class, for the environment, for political stability, etc. In short, the grantors of these favors - the people behind the government that defines and enforces civil law - are not getting their money's worth. They're giving and not getting, even more so when the benefits can flow overseas while the costs stay here. Once government starts doing favors for corporations without expecting anything back, what you have is neither democracy nor capitalism but oligarchy. Since you made the mistake of mentioning the Soviet Union, all I need do is point to its successor state for an example. It's a bad deal, and it's bad policy. Enforceable limited charters are long overdue for a comeback. P.S. I'm no millennial. I'm a very early GenX if you must know. What that means is that I've had time to study this stuff at more than a superficial level, so your well-poisoning is entirely off target.

jbob2000 8y ago

As much as I like what Elizabeth Warren says and stands for, it seems that she has absolutely no power to get anything done. So much so, that whenever I see her name in a headline, I know to avoid the article because it's all fluff and nothing will come of it.

bmm6o 8y ago
Passing legislation now is not the reason she is proposing this. By the time the Democrats have the votes to even make passing this a possibility, it will no longer be a new idea and won't seem to radical.
- jbob2000 8y ago
  That’s a huge list of assumptions. I’m really surprised I’m getting downvotes for this. The bill she proposes simultaneously pisses off big business and the right wing. There is absolutely no way this legislation is getting through, it’s just pandering for the media.
  - bryanlarsen 8y ago
    This is essentially a discussion piece / proposal for the 2020 Democratic election platform.
  - bmm6o 8y ago
    I'm not sure what "huge list of assumptions" you are referring to, merely the idea that she knows this can't pass today? I think putting these ideas out there in concrete form is a fine approach. If she wanted to "pander to the media" she could have just come up with a slogan with nothing behind it. An actual proposal that can be debated is the opposite of pandering to the media. "Repeal and Replace" as the entirety of your proposal is pandering to the media.
- dragonwriter 8y ago
  > Passing legislation now is not the reason she is proposing this Now, sure. After the midterms... Maybe a different story (at least in terms of getting it to President's desk), depending on how they turn out. Sure, not all of it will survive the process, but if the only substantive restriction that accompanied the charter was the political spending rule, Democrats would love to put Trump in the position where he'd have to either sign or veto that.

news_to_me 8y ago

A couple things stood out to me in this article: > "The private market will reward those that take care of their stakeholders" (Kevin Kelly) One of Warren's main points is that this is visibly not true: "Real wages have stagnated even as productivity has continued to rise" > “What she’s talking about is freezing the economy as it is, keeping things as they are." (Steve Forbes) Unsubstantiated. I'd like to see an explanation of how this could be true. I'd really like to see these conservative-corporate types actually defend their positions sometime without resorting to "socialism is bad!" or "the economy will falter!", which are just bogeyman arguments.

smacktoward 8y ago
> > “What she’s talking about is freezing the economy as it is, keeping things as they are." (Steve Forbes) Give him some credit though, it takes real nerve to argue against big changes by saying they wouldn't change anything!
belltaco 8y ago
I guess stakeholders in the Kevin quote refers to shareholders rather than employees or public interest. No wonder they want to kill the EPA.

benjohnson 8y ago

She should go ahead and see how it worrks. Nothing stopping her from starting her own company that voluntarily follows her rules. However, the fact that it seems like she want to force others to follow her rules rather than embark on her own creation tells me that she understands there some flaws in her idea.

news_to_me 8y ago
I guess you don't have a great grasp on the concept of government, then.

thatswrong0 8y ago

$1 billion in revenue seems like an odd choice. If you have low margins and large numbers of sales, you could easily be hitting $1 billion in annual revenue with, say, ~500 employees. And your profits might not even be that high. Why not set it to $X of profit? Or $X profit per employee? Anyway, I see no co-sponsors, so the purpose of this is probably to just be a talking point during the 2020 primaries.

394549 8y ago
> Why not set it to $X of profit? Probably because management can deliberately reduce profit, and realize shareholder gains in other ways. Amazon famously had very small profits over a long period of time because it reinvested all of its revenues back into its business: https://qz.com/987559/charted-amazons-amzn-profitless-path-to-world-domination-over-the-past-20-years/ https://qz.com/987559/charted-amazons-amzn-profitless-path-t... https://qz.com/1196256/it-took-amazon-amzn-14-years-to-make-as-much-net-profit-as-it-did-in-the-fourth-quarter-of-2017/ https://qz.com/1196256/it-took-amazon-amzn-14-years-to-make-...
- thatswrong0 8y ago
  > Amazon famously had very small profits over a long period of time because it reinvested all of its revenues back into its business That's very different from deliberately reducing profit for the sake of the shareholders though. Making capital investments for the sake of growing a company.. should be desired, no?
  - news_to_me 8y ago
    It's hard to legislate that distinction without getting messy, though. Hollywood, for example, is famous for the tax hoops they jump through to make it look like blockbusters lose money so they can avoid taxes.
    - thatswrong0 8y ago
      From a top Quora answer: > Hollywood accounting isn't about avoiding taxes, studios still pay taxes on revenue whether a film makes a dollar or a billion dollars. > What hollywood accounting does is shift costs around to avoid paying royalties and avoid contractual obligations of profit sharing. I really don't think dealing with profit vs. revenue would be messy at all.

ilove_banh_mi 8y ago

What is the principle behind the $1 billion revenue cut-off? why not simply regulate all corporations with more than N employees, say 10 employees?

news_to_me 8y ago
I haven't read the legislation, but I assume the intent is to target companies with an outsized influence on the economy. It makes sense to me that the institutions that have the most influence on society should be somewhat under society's control.

shiburizu 8y ago

Wasn't the whole problem with a lot of utility/service providers people hate nowadays that they have government charters that mandate their dominance in the field?

dragonwriter 8y ago
This isn't a government monopoly, it's more like a license.

Justsignedup 8y ago

Wait, she's positioning to be the 2020 candidate? I mean I'd vote for her in a heartbeat, but I thought she explicitly stated she didn't want it. But I guess great leaders don't want leadership, leadership is requested of them.

dang 8y ago

Discussed at https://news.ycombinator.com/item?id=17766031 https://news.ycombinator.com/item?id=17766031