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> I'd even "scare them incorrupt" by threatening to nationalize the company if no sufficient corrective actions are implemented to stop being a net negative to

by tivert 2y ago

> I'd even "scare them incorrupt" by threatening to nationalize the company if no sufficient corrective actions are implemented to stop being a net negative to society. Now that's the way to discipline the shareholders, which is a different problem than disciplining the leaders. The "401k objection" is often used as cover by the defenders of those people, in a ploy to avoid accountability: "shares are held by all kinds of common people in their 401ks, and all you be doing is punishing those innocents!" My answer to that is to require public companies (with brokerages) to maintain a registry of the beneficial owners of their shares, then just nationalize the shares of the largest shareholders (as those are the people/organization with any real influence). As for predictable objections of "it's impossible to collect that info1!1" they're already 90% of the way there, because they already know where to mail proxy statements. I think you can get the rest of the way with extra reporting requirements and onerous penalties for non-compliance (e.g. forfeiting the shares after a suitable grace period or if there is evidence of evasion).

ryandrake 2y ago
That's always the excuse that gets trotted out whenever anyone even suggests punishing a corporation for wrongdoing: "Bbbbbut what about Middle Class Joe and Jane whose pensions and 401(k)s might go down slightly? Won't someone think of the 401(k) owners?" That and "Bbbbbut the jobs! If you punish a company, they'll have to fire people!" Those two combined are enough to scare the general public into allowing companies do whatever the hell they want. Maybe if regulators grew a sack and started absolutely deleting companies for wrongdoing, people would think twice before they invest in them or the various institutional funds that invest in them. Wishful thinking.
rolandog 2y ago
Hmm, I have to confess I need to give more thought and understand the consequences of what you're proposing. I do like the idea of selectively punishing the most responsible actors. Out of curiosity, if one were to "steelman" my proposal... If nationalization of companies were a consequence of public companies behaving badly, would it not pressure shareholders to divest from bad actors, rather than doubling down on those whose leaders lacking moral scruples? What I'm trying to ask is: wouldn't it result in a better (moderately regulated) "free market" if there were consequences to leaders and shareholders alike?

by tivert 2y ago

ryandrake 2y ago

That's always the excuse that gets trotted out whenever anyone even suggests punishing a corporation for wrongdoing: "Bbbbbut what about Middle Class Joe and Jane whose pensions and 401(k)s might go down slightly? Won't someone think of the 401(k) owners?" That and "Bbbbbut the jobs! If you punish a company, they'll have to fire people!" Those two combined are enough to scare the general public into allowing companies do whatever the hell they want. Maybe if regulators grew a sack and started absolutely deleting companies for wrongdoing, people would think twice before they invest in them or the various institutional funds that invest in them. Wishful thinking.

rolandog 2y ago

Hmm, I have to confess I need to give more thought and understand the consequences of what you're proposing. I do like the idea of selectively punishing the most responsible actors. Out of curiosity, if one were to "steelman" my proposal... If nationalization of companies were a consequence of public companies behaving badly, would it not pressure shareholders to divest from bad actors, rather than doubling down on those whose leaders lacking moral scruples? What I'm trying to ask is: wouldn't it result in a better (moderately regulated) "free market" if there were consequences to leaders and shareholders alike?