...Warren's "Accountable Capitalism Act" would require that corporations that earn more than $1 billion in revenue a year (note "revenue," not "profits") would need a federal "charter" in order to operate. This charter would obligate these companies to consider all "stakeholders," not just shareholders, when making decisions. The bill would also require these corporations to permit employees to elect 40 percent of the company's board of directors; a super majority of 75 percent of directors and shareholders would have to approve political donations. (Gee, I wonder if somebody will propose something similar for unions?) Shareholders would be permitted to sue the company if they felt its actions were driven purely by profit and did not reflect the desires of its many "stakeholders."
...Warren explains that she wants to essentially force these companies to use the "benefit corporation" model, which prizes a set of values above just profits. She notes that successful companies like Kickstarter and Patagonia have embraced such a model, and that it's legal in several states.
So, stay with me here: If these types of business models are so successful in the American market, then why wouldn't corporations adopt such a model voluntarily? We shouldn't need a federal bill at all! And what about companies that are reinvesting? Amazon brings in billions in revenue annually, but has operated for most of its lifetime barely making a profit. ...
...Warren even complains in her commentary that "companies are setting themselves up to fail" by funneling earnings to shareholders rather than reinvesting them. Assuming this is true, what does this have to do with her? Let them fail. This is why there is a marketplace. Why keep a poorly managed company alive if it's not creating value and drawing customers?
But Warren isn't really concerned about businesses failing. She's worried about the ones that succeed despite operating in ways that she doesn't like. What she really wants to is put the federal government in a position of evaluating and approving how companies grow. She wants to substitute the decisions of people who run businesses with the prejudices and preferences of people who think like she does. And she wants to use the courts to enforce her ideas of how corporations should be managed.
...I brought up Amazon for a reason. Even though Amazon heavily reinvests in its own growth over profits it has constantly been getting crap over its low wages. Under Warren's bill, employees could essentially use the government to force Amazon to raise its wages. This would have benefited a certain number of employees, but it also would have done so at the expense of the company's growth. It would be creating fewer jobs. It would be smaller. There are some people who would see this as a good thing, but it could also result in a marketplace where people don't have the broad access to products and supplies that we have today. And that is not even getting into all the technology investments Amazon is responsible for that are making our lives better in any number of ways and will continue to do so in the future....