Elizabeth Warren has a plan to save capitalism

[Chris]

And I have a bridge for sale.

Elizabeth Warren has a plan to save capitalism

Elizabeth Warren has a big idea that challenges how the Democratic Party thinks about solving the problem of inequality.

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.


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....

One, it's still redistribution.

Two, do these social obligations extend to everyone to where everyone must be a contributing member of society? Somehow, I doubt it.

Just lipstick on a redistribution pig.

[nathanbforrest45]

This is like the argument that FDR supported socialist causes in order to save capitalism. They never learn do they? They just keep repeating the same bankrupt ideas over and over.

[texan]

They think they are onto something by doing this........................


They are not, when this gets exposed in general elections (I mean presidential type things) it will end.

[nathanbforrest45]

They think they are onto something by doing this........................


They are not, when this gets exposed in general elections (I mean presidential type things) it will end.

Who is going to expose them? Certainly not the media.

[Mister D]

And I have a bridge for sale.

Elizabeth Warren has a plan to save capitalism




One, it's still redistribution.

Two, do these social obligations extend to everyone to where everyone must be a contributing member of society? Somehow, I doubt it.

Just lipstick on a redistribution pig.

Moral obligations...the unmitigated gall

[Chris]

Moral obligations...the unmitigated gall

The gall is imposing that on only some and not all citizens the way it used to work in more holistic times.

[Mister D]

The gall is imposing that on only some and not all citizens the way it used to work in more holistic times.

I was thinking more about the left's relativistic stance on morality. I bet all of our "morality is relative" crowd would be quick to agree with Pocahontas.

[Chris]

I was thinking more about the left's relativistic stance on morality. I bet all of our "morality is relative" crowd would be quick to agree with Pocahontas.

That too. I mean, for a liberal to suddenly embrace morality is surprising.

Then again she's embracing it only relativistically, only some people must be moral.

[Chris]

Some more details on Warren's plan...

Elizabeth Warren Plans To Destroy Capitalism By Pretending To ‘Save’ It

...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....

[Chris]

A letter on it..

Scary. Deeply, Truly Scary

Here’s a letter to the Wall Street Journal:

Elizabeth Warren’s “Companies Shouldn’t Be Accountable Only to Shareholders” (August 15) is one of the most frightening displays of economic ignorance and intellectual arrogance that I’ve ever read from a high U.S. government official. Never mind that Sen. Warren mistakenly asserts that worker pay in the U.S. hasn’t kept pace with worker productivity. (Four years ago in these pages Liya Palagashivili and I offered evidence that directly contradicts Sen. Warren’s assertion.) And also forget that this former law professor, in her designs to radically remake the way in which corporations are governed, gives no evidence of familiarity with even the rudiments of corporate finance.

In effect, Sen. Warren’s aim is to confiscate a large chunk of the property of equity owners (those whose economic welfare is most directly tied to the quality of corporate decision-making) and transfer it to a largely nebulous set of “stakeholders” (those who, having directly risked nothing of their own on the performance of corporations, will nevertheless get a say in how corporations are run simply because politicians, bureaucrats, and judges declare them – according to what criteria we do not know – to be “stakeholders”).

Or maybe not. I above describe stakeholders as largely nebulous because, in fact, one group of them is quite clear – namely, existing employees. Perhaps the practical effect of Sen. Warren’s proposal would not be the widespread stakeholder management of her dreams but, instead, worker management. Corporations would be run overwhelmingly for the benefit of existing workers. Pay would outstrip worker productivity – which itself would fall. Payrolls would bloat. Efficiency-enhancing innovation would disappear. And economic competition would become anemic as companies are run less and less to produce goods and services that appeal to consumers and more and more to produce security and sinecures that appeal to workers.

Either way – whether corporations would be run for a broad set of “stakeholders” or only for workers – Sen. Warren’s planned confiscation of owners’ equity would turn what is now a Niagara of job-creating and prosperity-enhancing investment funds into a mere puddle, as stagnant as it is puny. We would then bid adieu to American prosperity.

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030