Elizabeth Warren introduced the “Accountable Capitalism Act” which of course isn’t capitalism at all and seeks to put more restrictions and add more regulation. From her website:
- Requires very large American corporations to obtain a federal charter as a “United States corporation,” which obligates company directors to consider the interests of all corporate stakeholders: American corporations with more than $1 billion in annual revenue must obtain a federal charter from a newly formed Office of United States Corporations at the Department of Commerce. The new federal charter obligates company directors to consider the interests of all corporate stakeholders – including employees, customers, shareholders, and the communities in which the company operates. This approach is derived from the thriving benefit corporation model that 33 states and the District of Columbia have adopted and that companies like Patagonia, Danone North America, and Kickstarter have embraced with strong results.
- Empowers workers at United States corporations to elect at least 40% of Board members: Borrowing from the successful approach in Germany and other developed economies, a United States corporation must ensure that no fewer than 40% of its directors are selected by the corporation’s employees.
- Restricts the sales of company shares by the directors and officers of United States corporations: Top corporate executives are now compensated mostly in company equity, which gives them huge financial incentives to focus exclusively on shareholder returns. To ensure that they are focused on the long-term interests of all corporate stakeholders, the bill prohibits directors and officers of United States corporations from selling company shares within five years of receiving them or within three years of a company stock buyback.
- Prohibits United States corporations from making any political expenditures without the approval of 75% of its directors and shareholders: Drawing on a proposal from John Bogle, the founder of the investment company Vanguard, United States corporations must receive the approval of at least 75% of their shareholders and 75% of their directors before engaging in political expenditures. This ensures any political expenditures benefit all corporate stakeholders.
- Permits the federal government to revoke the charter of a United States corporation if the company has engaged in repeated and egregious illegal conduct: State Attorneys General are authorized to submit petitions to the Office of United States Corporations to revoke a United States corporation’s charter. If the Director of the Office finds that the corporation has a history of egregious and repeated illegal conduct and has failed to take meaningful steps to address its problems, she may grant the petition. The company’s charter would then be revoked a year later – giving the company time before its charter is revoked to make the case to Congress that it should retain its charter in the same or in a modified form.
What Elizabeth Warren wants to do here is create yet another government office to regulate corporations here in America, to centralize power over any corporation receiving greater than $1 billion in annual revenue. The wording is so opaque and up for interpretation. “The new federal charter obligates company directors to consider the interests of all corporate stakeholders – including employees, customers, shareholders, and the communities in which the company operates.” What does that even mean? Consider the interests? Isn’t that done by necessity already? If a customer is not happy with a product they will simply choose to buy elsewhere. An employee can leave companies if they so choose. With such wishy-washy rules who knows how an infraction can be interpreted and then like that your charter is removed. Meaning what? The company is done altogether? The government completely seizes it? That’s an awful lot of power for the government to have, and to control ALL industries.
This is yet another step closer to full blown communism. Centralizing power to control all industries is not a good thing. It has never worked. And there are much better ways to go about reforming the problems with corporations. I actually like some of the proposals in here, mainly the stock option clause and the political contribution bit. Those make sense and are a good way to control how a corporation operates without seizing the company outright. Further, what does she think will happen to business here if she actually passed this disaster? What would the incentive be for corporations to remain here?
Which leads to the next point, which is she probably knows this has zero chance of ever passing but will help her succeed in winning the hearts of the feral-extreme left. It’s virtue signaling, plain and simple. What politicians do best; blather on about x, y, and z and preaching about major reformations but knowing it’ll never happen. She claims she’s not running in 2020 but I don’t believe her for a second.
The best thing that could happen to this country would be to drastically reduce the size of government. De-centralization serves to stabilize a country. To use some terminology from NN Taleb large, centralized governments are inherently fragile. In order to reduce the chance of a major black swan event that could lead to total government collapse, reducing this central power is key. Name one industry that was ever run better and more efficiently when under increased government control. The education system has been a disaster since the government took control. What more is there to say about health care. Aerospace is another great example. How many times were we told it’s impossible to launch re-usable rockets? Now SpaceX launches rockets for a tenth of the cost they previously cost, after finally being given the chance to compete with the very limited private partners they allowed.