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This proposal would effectively make the federal government the Executive Chairman of a board. It's too radical and won't go anywhere, even with Democrats. It r

This proposal would effectively make the federal government the Executive Chairman of a board. It's too radical and won't go anywhere, even with Democrats. It reads like establishing progressive bona fides.

k__ 8y ago
We have something like this in Germany with VW. The prime minister of Lower Saxony is also part of the board. No share holder can vote more than 20% even if they own more. Only the prime minister can vote 20,2%
- darawk 8y ago
  And despite the fact that the, supposed, point of these sorts of systems is to stop "short term thinking", VW still opted to cheat emissions standards to get ahead.
  - k__ 8y ago
    Don't know if the share holders are to blame here or if they also lied to them
  - forapurpose 8y ago
    What is the point? That no system works perfectly?
    - darawk 8y ago
      That the shining example of this system failed at the exact thing it was supposed to be better at.
      - forapurpose 8y ago
        > the exact thing it was supposed to be better at. The entire system of corporate governance is designed to be honest in emissions tests? There are many goals in corporate governance, with integrity (if that's what the parent is referring to) being only one of them, and one failure at one company on one item (emissions testing) under one of the goals tells us nothing about the system's effectiveness. The standard isn't perfection, of course, but performance relative to alternatives. Germany is known to be relatively corruption-free with excellent corporate governance. But are there better systems you can suggest? Ways to improve it?
        darawk 8y ago
        Shareholder capitalism.
        forapurpose 8y ago
        Companies under shareholder capitalism also have integrity failures. What evidence do we have that it's a superior system?
        darawk 8y ago
        The level of productivity and innovation in economies that deploy it vs. those that do not. It is not an accident that all major tech companies are in the US and China (started in China's special economic zones).
        forapurpose 8y ago
        Can you provide some evidence? Germany, the country being discussed, is exceptionally productive, as is Japan and other countries with a wide variety of corporate governance. China's economy is large, but not very productive compared to advanced economies. Also, can you provide evidence that connects the governance model with productivity? Finally, if by productivity you mean income, I think it raises other issues: Productivity for who? It would be expected that governance models which favor shareholders generate more benefits for shareholders, and those which favor workers or other stakeholders would generate more benefits for them. It's circular to say: 1) the definition of productivity is shareholder income, 2) systems that favor shareholders are therefore more productive.
        darawk 8y ago
        > Can you provide some evidence? Germany, the country being discussed, is exceptionally productive, as is Japan and other countries with a wide variety of corporate governance. Japan is actually exceptionally not productive. The Japanese people have a reputation for industriousness, but their businesses are actually managed quite poorly. You can see this in their GDP (per capita) growth. Let's look at some plots: https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?end=2017&locations=JP-US-DE-CN&start=1960&view=chart https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?end=2017... These are all the countries we're talking about. Japan's GDP has been flat for a couple of decades now. Since the mid-90s, when they misinterpreted their credit expansion as evidence of their success and over-leveraged themselves buying foreign assets they couldn't afford. Germany has been more responsible, but you can see quite clearly that their productivity growth has been spiky, unstable, and plateauing for the last few years. Yes, overall their GDP per capita is quite high, as is Japan's, but I would attribute that more to a cultural bent towards work ethic and education, to generate consistent growth takes innovation, and innovation requires more than an educated populace and work ethic. It requires a friendly regulatory environment and an incentive structure that rewards people for innovating. On the other hand, look at the US and China. Those are almost impossibly smooth curves. Ya, China is still much lower in absolute terms, but their growth is steady and substantial (notably, since the introduction of capitalist reforms). China is still very much a mixed economy, but you have to look at what they regulate, and how. The Chinese government doesn't regulate their labor market very much, and they certainly don't attempt to impose any sort of co-determination with workers. They want Chinese companies to align themselves with the interest of China as a country (which generally means censorship, and sometimes arbitrarily telling them to stay out of or get into certain markets). But they don't try to tip the scales in favor of labor over capital, at least not in terms of decision making about the businesses themselves. Now, this is all a fine narrative i've constructed, but it's really quite difficult to prove something like this. There's lots of confounding variables, and lots of stuff going on. China and the US both have much larger populations, for instance. China does have some labor regulations that I would consider draconian and a drag on productivity (you have to give 30 days of notice to fire someone, you can only fire people for certain legally specified reasons, and you have to pay severance). But in my view at least, that's a substantially smaller drag than something like work councils, but it's important to state that it is really hard to prove these things. A possibly better measure of productivity is something called 'Total Factor Productivity'. Which sort of says: take the stuff your country produced, subtract the stuff it bought and the difference is your total factor productivity, i.e. how much value is your labor force adding to stuff. Here are the plots for the countries in question: https://fred.stlouisfed.org/graph/?g=lbGq https://fred.stlouisfed.org/graph/?g=lbGq In this chart, actually China isn't even growing. Only the US is. This might be due to weakness of their currency, but i'm not sure. It's complicated. In summary, I think growth is super important, it really does lift people out of poverty, and I think these sorts of regulations will stifle it. When people look at say, Jeff Bezos being worth 160 billion, they think: How is that fair? We should take some of that money and give it to the poor and needy. But most of these attempts to do that aren't going to end up taking Bezos's money and giving it to anyone. They're just going to delete it from the world. The operation isn't a move, it's an erase.
dragonwriter 8y ago
> This proposal would effectively make the federal government the Executive Chairman of a board. No, it would make the federal government the public chartering authority of large corps, which was a role states have had and used to take more seriously than they do now. > It's too radical and won't go anywhere, even with Democrats It's true that the neoliberal wing of the party that has been dominant since the early 1990s won't like to much, but the neoliberal wing recently has seen a number of incumbent office holders go down to primary challengers from the progressive wing. The neoliberal wing’s support in the Democratic electorate isn't nearly as strong as their current strength in office would suggest, and some of them are no doubt starting to realize that. > It reads like establishing progressive bona fides. Whatever else it is, it's definitely part of both setting g the ground for platform debates and establishing personal position leading in to 2020.
- golemotron 8y ago
  > No, it would make the federal government the public chartering authority of large corps, which was a role states have had and used to take more seriously than they do now. What would make that Constitutional? It's not an enumerated power.
  - ballenarosada 8y ago
    The commerce clause?
forapurpose 8y ago
> This proposal would effectively make the federal government the Executive Chairman of a board. How? There is nothing in the proposal that puts a government entity on the board. Corporations are already subject to the law and regulations, of course, so changing rules doesn't effectively change the role of government.
- billbrown 8y ago
  Oh, yes, there's nothing as blatant as putting a government representative on the board. The government representative just oversees the proper constitution of the board, decides whether the board is acting to "general public benefit," and decide whether the members are exercising good business judgement. And, I guarantee, the Office of United States Corporations will be able to change the corporation's charter and direction via guidance, regulation, and oversight without the board's assent (or consent). "Executive Chairman" is just the closest role I could come up with, but it's more like dictator or decider. Its "vote" is the only one that matters. (I'm sure there'll be some sort of administrative law court with the DoC that'll serve as appeal but it's got the same problems that all ALCs face.)
  - forapurpose 8y ago
    Government, through the legal system and regulation, already has that authority. We all live and operate under the law; there are many things businesses (and individuals) can't do and and others they must do. I still don't see what distinguishes these rules from existing rules in that respect. > I guarantee, the Office of United States Corporations will be able to change the corporation's charter and direction via guidance, regulation, and oversight without the board's assent (or consent). Could you provide a substantial basis for this prediction?
    - billbrown 8y ago
      > Government, through the legal system and regulation, already has that authority. We all live and operate under the law; there are many things businesses (and individuals) can't do and and others they must do. I still don't see what distinguishes these rules from existing rules in that respect. If it already has that authority, then what is this law that Warren is proposing? My understanding is that it's a whole new sort of authority. Although there is a pending law in California that gives it the power to regulate board constitution, government is not currently able to do what the act allows. Or are you saying that there are laws that govern corporations therefore the government can do anything arbitrarily? If so, that's not really how things work. > Could you provide a substantial basis for this prediction? I suspect that I couldn't offer anything that you would accept. "General public benefit" is the one that most obviously suggests future malleability à la the "general welfare" clause of the Constitution.

k__ 8y ago

We have something like this in Germany with VW. The prime minister of Lower Saxony is also part of the board. No share holder can vote more than 20% even if they own more. Only the prime minister can vote 20,2%

darawk 8y ago
And despite the fact that the, supposed, point of these sorts of systems is to stop "short term thinking", VW still opted to cheat emissions standards to get ahead.
- k__ 8y ago
  Don't know if the share holders are to blame here or if they also lied to them
- forapurpose 8y ago
  What is the point? That no system works perfectly?
  - darawk 8y ago
    That the shining example of this system failed at the exact thing it was supposed to be better at.
    - forapurpose 8y ago
      > the exact thing it was supposed to be better at. The entire system of corporate governance is designed to be honest in emissions tests? There are many goals in corporate governance, with integrity (if that's what the parent is referring to) being only one of them, and one failure at one company on one item (emissions testing) under one of the goals tells us nothing about the system's effectiveness. The standard isn't perfection, of course, but performance relative to alternatives. Germany is known to be relatively corruption-free with excellent corporate governance. But are there better systems you can suggest? Ways to improve it?
      - darawk 8y ago
        Shareholder capitalism.
        forapurpose 8y ago
        Companies under shareholder capitalism also have integrity failures. What evidence do we have that it's a superior system?
        darawk 8y ago
        The level of productivity and innovation in economies that deploy it vs. those that do not. It is not an accident that all major tech companies are in the US and China (started in China's special economic zones).
        forapurpose 8y ago
        Can you provide some evidence? Germany, the country being discussed, is exceptionally productive, as is Japan and other countries with a wide variety of corporate governance. China's economy is large, but not very productive compared to advanced economies. Also, can you provide evidence that connects the governance model with productivity? Finally, if by productivity you mean income, I think it raises other issues: Productivity for who? It would be expected that governance models which favor shareholders generate more benefits for shareholders, and those which favor workers or other stakeholders would generate more benefits for them. It's circular to say: 1) the definition of productivity is shareholder income, 2) systems that favor shareholders are therefore more productive.
        darawk 8y ago
        > Can you provide some evidence? Germany, the country being discussed, is exceptionally productive, as is Japan and other countries with a wide variety of corporate governance. Japan is actually exceptionally not productive. The Japanese people have a reputation for industriousness, but their businesses are actually managed quite poorly. You can see this in their GDP (per capita) growth. Let's look at some plots: https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?end=2017&locations=JP-US-DE-CN&start=1960&view=chart https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?end=2017... These are all the countries we're talking about. Japan's GDP has been flat for a couple of decades now. Since the mid-90s, when they misinterpreted their credit expansion as evidence of their success and over-leveraged themselves buying foreign assets they couldn't afford. Germany has been more responsible, but you can see quite clearly that their productivity growth has been spiky, unstable, and plateauing for the last few years. Yes, overall their GDP per capita is quite high, as is Japan's, but I would attribute that more to a cultural bent towards work ethic and education, to generate consistent growth takes innovation, and innovation requires more than an educated populace and work ethic. It requires a friendly regulatory environment and an incentive structure that rewards people for innovating. On the other hand, look at the US and China. Those are almost impossibly smooth curves. Ya, China is still much lower in absolute terms, but their growth is steady and substantial (notably, since the introduction of capitalist reforms). China is still very much a mixed economy, but you have to look at what they regulate, and how. The Chinese government doesn't regulate their labor market very much, and they certainly don't attempt to impose any sort of co-determination with workers. They want Chinese companies to align themselves with the interest of China as a country (which generally means censorship, and sometimes arbitrarily telling them to stay out of or get into certain markets). But they don't try to tip the scales in favor of labor over capital, at least not in terms of decision making about the businesses themselves. Now, this is all a fine narrative i've constructed, but it's really quite difficult to prove something like this. There's lots of confounding variables, and lots of stuff going on. China and the US both have much larger populations, for instance. China does have some labor regulations that I would consider draconian and a drag on productivity (you have to give 30 days of notice to fire someone, you can only fire people for certain legally specified reasons, and you have to pay severance). But in my view at least, that's a substantially smaller drag than something like work councils, but it's important to state that it is really hard to prove these things. A possibly better measure of productivity is something called 'Total Factor Productivity'. Which sort of says: take the stuff your country produced, subtract the stuff it bought and the difference is your total factor productivity, i.e. how much value is your labor force adding to stuff. Here are the plots for the countries in question: https://fred.stlouisfed.org/graph/?g=lbGq https://fred.stlouisfed.org/graph/?g=lbGq In this chart, actually China isn't even growing. Only the US is. This might be due to weakness of their currency, but i'm not sure. It's complicated. In summary, I think growth is super important, it really does lift people out of poverty, and I think these sorts of regulations will stifle it. When people look at say, Jeff Bezos being worth 160 billion, they think: How is that fair? We should take some of that money and give it to the poor and needy. But most of these attempts to do that aren't going to end up taking Bezos's money and giving it to anyone. They're just going to delete it from the world. The operation isn't a move, it's an erase.

dragonwriter 8y ago

> This proposal would effectively make the federal government the Executive Chairman of a board. No, it would make the federal government the public chartering authority of large corps, which was a role states have had and used to take more seriously than they do now. > It's too radical and won't go anywhere, even with Democrats It's true that the neoliberal wing of the party that has been dominant since the early 1990s won't like to much, but the neoliberal wing recently has seen a number of incumbent office holders go down to primary challengers from the progressive wing. The neoliberal wing’s support in the Democratic electorate isn't nearly as strong as their current strength in office would suggest, and some of them are no doubt starting to realize that. > It reads like establishing progressive bona fides. Whatever else it is, it's definitely part of both setting g the ground for platform debates and establishing personal position leading in to 2020.

golemotron 8y ago
> No, it would make the federal government the public chartering authority of large corps, which was a role states have had and used to take more seriously than they do now. What would make that Constitutional? It's not an enumerated power.
- ballenarosada 8y ago
  The commerce clause?

forapurpose 8y ago

> This proposal would effectively make the federal government the Executive Chairman of a board. How? There is nothing in the proposal that puts a government entity on the board. Corporations are already subject to the law and regulations, of course, so changing rules doesn't effectively change the role of government.

billbrown 8y ago
Oh, yes, there's nothing as blatant as putting a government representative on the board. The government representative just oversees the proper constitution of the board, decides whether the board is acting to "general public benefit," and decide whether the members are exercising good business judgement. And, I guarantee, the Office of United States Corporations will be able to change the corporation's charter and direction via guidance, regulation, and oversight without the board's assent (or consent). "Executive Chairman" is just the closest role I could come up with, but it's more like dictator or decider. Its "vote" is the only one that matters. (I'm sure there'll be some sort of administrative law court with the DoC that'll serve as appeal but it's got the same problems that all ALCs face.)
- forapurpose 8y ago
  Government, through the legal system and regulation, already has that authority. We all live and operate under the law; there are many things businesses (and individuals) can't do and and others they must do. I still don't see what distinguishes these rules from existing rules in that respect. > I guarantee, the Office of United States Corporations will be able to change the corporation's charter and direction via guidance, regulation, and oversight without the board's assent (or consent). Could you provide a substantial basis for this prediction?
  - billbrown 8y ago
    > Government, through the legal system and regulation, already has that authority. We all live and operate under the law; there are many things businesses (and individuals) can't do and and others they must do. I still don't see what distinguishes these rules from existing rules in that respect. If it already has that authority, then what is this law that Warren is proposing? My understanding is that it's a whole new sort of authority. Although there is a pending law in California that gives it the power to regulate board constitution, government is not currently able to do what the act allows. Or are you saying that there are laws that govern corporations therefore the government can do anything arbitrarily? If so, that's not really how things work. > Could you provide a substantial basis for this prediction? I suspect that I couldn't offer anything that you would accept. "General public benefit" is the one that most obviously suggests future malleability à la the "general welfare" clause of the Constitution.