In yesterday’s New York Times, Nicholas Kristof provided Occupy Wall Street participants with three suggestions for specific demands they could make: 1) impose a financial transactions tax, 2) close the “carried interest” and “founders’ stock” loopholes and 3) move ahead with Basel III capital requirements and adopt the Volcker Rule.
I’m interested in other, very specific, suggestions for demands progressives could make in other areas:
How about 100% tax-payer funded elections, state, local, and federal? Y’know, get the money out of politics and all that? That seems like the sort of thing they’d get enthused about.
I’m confused. Do you want to expand this specific protest to cover those other areas? Because that’s exactly what Kristof is criticizing them for doing already.
If you want a laundry list of progressive causes, then this is going to be a ridiculously broad and messy debate.
There is only one thing that can be done that would be effective. Revoke corporate personhood. Right now corporations enjoy almost all the rights of personhood with none of the liabilities. You can’t jail a corporation, you can’t punch it in the nose. There was one law in the past decade which made corporations sit up and take notice, and it was kind of a bullshit one. Sarbanes-Oxley increased paperwork, but it didn’t remove the ability of a corporation to do bad shit. What it did was impose criminal penalties on book-cookers. The business world has already evolved in response to this regulation and things like the subpoena of internal documents from the tobacco companies, mortgage firms, et al. Plausible Deniability is the new norm.
Corporate Persons can treat real persons like numbers and there can be no meaningful retaliation. Corporations were invented to limit liability of stockholders, and it has eventually divorced itself from any true liability. Any fines or penalties are simply passed on to the consumer. Consumers have no bargaining positions, and the few weapons a consumer had, such as the class action suit, are also being rendered ineffective(although class actions were hijacked by legal firms looking for fat payouts long ago, they still were a deterrent to some types of corporate misbehavior).
Immune to lawsuits? Sure.
Unable to own property? No.
Shouldn’t pay taxes? Sure.
A lawsuit that currently would be directed at Widgets Inc. would be better directed at Lizzy Smith, the CEO of Widgets, Inc. If she doesn’t like that, let her, like doctors and teachers and other professionals, take out liability insurance.
Taxes that are currently paid by Widgets, Inc. would instead be paid by Lizzy Smith and all other shareholders, as capital gains are treated as income like income earned via wages.
Corporations could own property jointly. They could earn profit and owe money. They could go bankrupt or go public. But I’d be very happy limiting their effect to issues of ownership, and leaving everything else up to the individuals involved.
For that matter, political donations made by Widgets, Inc. (and, of course, by the Union of Affiliated Widgetmakers) could no longer occur: Lizzy (and each widgetmaker) could make whatever donations they saw fit as individuals.
Granted, this is a half-baked proposal, and I’m perfectly open to criticism of it. However, my underlying principle is that in most cases we should revert responsibility to the individual human making the decision, and not allow faeries, martians, ghosts, corporations, or other pretend beings to clog up our courts.
Indictment of the top people at the banks, top politicians from the prez down to the Senators and congresscritters sitting on the financial committees who all take lobbying checks from the banks, and the revolving door people – ex-bankers who become lobbyists who become regulators or Treasury or Fed employees or economic advisors to the prez and then back to the banks again – on RICO charges.
And when they get convicted, similar sentences to the other organised crime bosses. And no country club prisons, they should serve their terms in proper federal pens so they get to meet lots of nice new people.
What law do you think they broke? Because if there’s clear evidence that they broke a law, then great. But a major part of the problem seems to me to be the fact that such awful behavior was legal.
Immune to Lawsuits. Yes. They’re effectively immune to lawsuits now because all that happens is someone gets a judgment against corporation X and all they do is pass it on to the consumers. The individuals who made the decision to engage in the behavior which got them the adverse judgment may or may not be punished through internal channels within the corporation, but if so it’s hardly society levying the consequences of the action. All the corporation being sued instead of the individual decision makers does is give an “I was only following orders” defense to bad actors. Just as a Marine can’t hide behind an illegal order to mow down civilians, corporate decision makers shouldn’t hide behind their mandate to increase shareholder value.
A side effect of stripping the ability of a corporation to be sued is they can’t sue either. Corporations have used lawsuits and the threat thereof, to squash competition and create the mutually assured destruction nonsense we now see in the IP patents space.
Unable to own property. Well, I think this should be available to corporations. I can’t see why they shouldn’t be able to buy a building or own a computer their employees will use. The ultimate title of these assets belongs to the shareholders though and when assets are sold the profits should be distributed to the owners, i.e. the shareholders.
Taxes are the easy one. Tax transfers of wealth and gains. Corporations could become coops which are all owned by their shareholders/employees and the profits go to the shareholders/employees. This is what they were originally. The idea of a corporation having a huge amount of cash in the bank but the only benefit a shareholder ever gets is when they sell out, instead of being rewarded for their wise current investment makes no sense. Employees who may currently be contributing work to a company which is growing fantastically can still be screwed out of sharing in that prosperity because management can just accrue the gains to the corporation, skimming nice bonuses, instead of the theoretical owners of the equity being generated or the individuals creating the value getting it. Corporations shouldn’t be taxed, the transactions they engage in should. This is really pretty close to what they are now and is the easiest thing to reform.
The current situation divorces the owner/shareholder from the decision making and from having any type of either accountability or action in the corporation. The only time they pay attention at all is when they want to sell their stake. They have no real input into corporate decisions, and since their stock doesn’t generate a revenue stream, they have no incentive to pay attention to what the management of the corporation is doing as long as the price keeps going up. This absentee ownership has left corporations in the hands of a handful of senior executives who are driven by quarterly goals and without any input from the shareholders beyond “make sure I can sell for more than I bought for.”
I agree that Occupy Wall Street should keep a very tight focus, rather than expanding to embrace “all things progressive.” Abuse by financial corporations has been a very big problem in America for decades now, and appropriate corrective actions have not yet been taken. Stay focused on that.
On the question of corporate personhood, I think corporations are important to the modern world, and I would not advocate the strong measures mentioned by others. The one big “personal right” of corporations that is a big mistake is free speech, or particularly their ability to influence elections with money. The 1st Amendment grants free speech to people and it is absurd to extend this to corporations just because some lawyers like the term “legalistic person.”
Some other recommendations:
[ul][li] Pursue antitrust. “Too big to fail” is “too big to exist privately.”[/li][li] Make corporations more responsive to long-term shareholder interest.[/li][li] Give priority to public interest. (I’ve been amazed in recent SDMB threads by Dopers who have a religious belief in public-be-damned laissez-faire contract sanctity, especially amazing now with clearcut problems in view).[/li][li] Apply simple common-sense enforcement, not complex regulations.[/li][/ul]
On the last point in the list, I’ve been very disappointed by the high-paperwork burden regulations passed after recent crises. Financial mishaps at Wall St., Enron, AIG, etc. were not caused by inadequate paperwork, but by willful frauds. A lot more executives should have been sent to prison.
Balderdash. To cite just one example, the securities companies encouraged their customers to buy stocks that the companies themselves were betting against. That’s criminal fraud, plain and simple.
There’s also something to be said for Doug Henwood’s proposal for a single demand:
“These gangsters have too much money. They wrecked the economy, got bailed out, and are back to business as usual. We need jobs, schools, health care, and clean energy. Let’s take their money to pay for them.”
But that’s probably not going to go over well with most of the country.
This. It’s been alleged that investment managers in places like Goldman Sachs were recommending mortgaged backed securities as sound financial instruments to pension fund managers, etc., at the exact same time they were using CDOs to bet that those same mortgage-backed securities would fail. Now while the firm has a right to buy whatever financial instruments it likes, it can’t RECOMMEND products to it’s customers as sound purchases while making financial bets that indicate a VERY different opinion of them. That’s fraud. They KNEW those mortgage backed securities were unsound, yet the recommended them to their customers.
And a lot of banks made loans they never should have because they knew they could bundle them into those mortgage-backed securities and get them off their books.
It was gross mismanagement, fraud and total failure to meet professional and legal obligations on a MASSIVE scale, and the failure of the Obama Administration to prosecute even a SINGLE firm or person for it speaks VOLUMES about how thoroughly bought they are. Of course, the Republicans are even MORE bought. Fact is, Washington has been bought, wholesale, by the financial industry.
This tells the financial industry experts that they can do whatever they like and not get prosecuted for it. Coupled with Washington’s curious inability/disinterest with regard to closing the regulatory loopholes that made CDOs possible, what does that tell us about the likelihood of the repeat of the CDO scam/collapse? We really NEED to put some financial execs in jail, for our own safety.
I have been doing alot of thinking since this protest began. I kept seeing people mention ONE demand. I realized, that’s impossible. These people in power for decades, have been helped by the government and media for decades to bring us to where we now are. One demand isn’t going to cut it unless the one demand is FIX IT ALL AND MAKE IT LIKE IT’S SUPPOSED TO BE. The more one thinks about it, the more a person realizes all our systems are corrupt and need to change.
To what-another corrupt system run by new people? Out with the old boss, in with the new boss? The system as it now stands was created by human beings and is run by human beings, and nothing I’ve seen so far shows me that protesters have a viable and stable system in mind to replace the one we’ve got.