Ignoring the impossibility of this passing, is this a good idea?
I have some sympathy for the ideas, especially the first three. Regarding the 4th one, I have to wonder what happens if a large corporation’s charter is revoked. Does the government take possession of its assets? Do its assets get sold off and the stockholders paid off? Either option seems open to gaming, by either the government or the stockholders.
The first one has some merit in its goal but it’s lacking detail. The second is absurd. The third is the wrong solution to the problem, just ban corporations from making most types of political spending. The fourth is fine, the corporation would be reorganized.
The fourth one is sort-of what happened to Arthur Andersen (the major accounting firm) after it failed to notice fraud going on at Enron. It was convicted of obstruction of justice for shredding documents (later the conviction was overturned on appeal) and since the SEC won’t accept audits from convicted felons, the company shut down.
I think Sen Warren is thinking about cases like Wells Fargo, or the banks that blew up the economy in 2008 but seemed to suffer no penalty for doing so.
You think this would work for McDonalds and their huge ever changing employee base? I don’t think the kind of relationship between employees and businesses justify this rule. If there were more obligations between the parties there could be a way to make it work.
I don’t know whether I’m being cynical or naive, here, but: if the whole point of that second one is that the workers are supposed to call the shots when it comes to, say, 40% of the board, then aren’t a lot of 60-40 votes in store?
Just, like, tons of 60-40 votes: a long shadow of 60-40 votes o’er the land, as far as the eye can see; picture an ex-con with “60” tattooed on the knuckles of one fist, and “40” on the other, only ever bothering to throw punches with one hand…
I agree that the second is absurd. It would be like giving the plumber who fixes your pipes decision-making authority over your house and budget.
The employees have bargaining power in that they work for the company if the company makes it worthwhile for them. Giving them additional ownership-type rights, at the expense of the shareholders who invest the money and ultimately pay their salaries, is absurd.
Which are the customers? Do I, for instance, get to vote on whether or not a Hollywood studio gets a charter or not? Do I have to produce a ticket stub to prove I am a customer?
Does “workers” include “foreign workers”? Do the Chinese get to vote on whether or not to locate a new corporate headquarters in Seattle vs. Beijing?
What happens if the charter is not granted? Does the company have to shut down? Can they just not do business until they get the charter?
How are those kinds of elections handled - do the workers get one vote apiece, and the shareholders one vote apiece, or are the shareholders’ votes weighted by how much of the company they own? I’d like to hear the justification that says a janitor should have as much voice as the board chair or the founder of the company.
Maybe this could be applied more broadly - to unions, for instance.
Is this like the RICO act? Is this just for federal crimes, or for state crimes as well?
I wonder if Ms. Warren has completely thought this thru.
I think the combination might tip the balance a little too far in the workers’ favour if they get a union and the ability to vote for board members who would promise to grant anything the union demands. At that point, the employees may as well set up a cooperative.
FWIW, I don’t think it’s just about how well the economy is doing. If you seize control from the shareholders and give it to the workers, who can then reorient the company’s goals from return on investment for the investors (with the workers relying on supply-and-demand to set their wages) towards directing output to the workers, that’s bad in and of itself, regardless of how it impacts the economy.
But I don’t know how that plays out in Germany.
[FTR, I agree that the current system really screws the workers, but I would like to see some alternative that doesn’t involve screwing the shareholders either. The ones who need the tables turned on them are the upper-level management fat cats.]
Maybe 40% is too high. Maybe it ought to be 30%. Or some other value. But if we can agree at least to consider that workers might ought to have some stake in the company’s big decisions, then working out the exact % is relatively easy.