Elizabeth Warren’s New Proposal for “Accountable Capitalism” is Ludicrous
Massachusetts Senator Elizabeth Warren now proposes that the government has the right to tell corporations how to run their businesses, elect corporate boards, and make political contributions.
Massachusetts Senator Elizabeth Warren recently declared herself to be “capitalist to my bones.” The remarks infuriated many fellow travelers on the progressive left who have been on the rise lately in the wake of Bernie Sanders’ wildly successful 2016 primary campaign in which he won 43% of the vote. They left many political commentators scratching their heads.
Warren is almost certainly mounting a presidential campaign in 2020. She faces smooth sailing in her 2018 reelection bid in Massachusetts, and has emerged as one of the leading voices on the progressive left. Sanders and Warren, however, occupy the same space. If they both run in 2020, they will be shooting each other in the foot.
Warren is probably astute enough to realize that, even with Sanders taking nearly half of Democratic primary voters, and having the support of the increasingly radical activist base of the Democratic Party, a self-avowed “democratic socialist” candidate facing any Republican in November 2020 would almost certainly be crucified.
Even the perpetually negligent and incompetent mainstream media would likely get in on the action. It’s hard to believe that the nation’s major newspapers, editorial boards, television stations, radio stations, and magazines would sit back and give a socialist candidate a pass. That would be ludicrously irresponsible on their part, and would undoubtedly provoke a backlash on the part of independent and moderate voters, the vast majority of whom remain skeptical of socialism.
It is impossible to know what is in Elizabeth Warren’s heart. Perhaps she really is a capitalist, although her actions and policy proposals certainly do not seem to back such a contention.
What appears most likely is that Warren realizes that outside of some very “blue” districts and states, proclaiming oneself a socialist is still political suicide in the United States. Thus, she must take her democratic socialist ideology and repackage it. Rebrand it. Reshape it. Make it palatable to a wider audience.
Demagogues throughout history have needed a public enemy to blame for society’s ills. Convince the masses that this enemy is to blame for their problems. Claim that you are the one who has the only solution to neutralize this enemy. Propose legislation to that effect.
Enter Elizabeth Warren and the “Capitalism Accountability Act.”
It sounds delightful, doesn’t it? Too much capitalism has ruined America and threatened working class people. Unregulated and unchecked capitalism is the problem.
For Warren and Sanders, corporations aren’t there to provide goods and services in a free market economy: they are there to screw over the little guy. And they must be stopped.
Their political influence is the greatest clear and present danger to the American public, so it’s time to put corporations under government control.
Under the terms of the legislation, among other things:
1: Company directors would be explicitly instructed to consider the interests of all relevant stakeholders — shareholders, but also customers, employees, and the communities in which the company operates — when making decisions.
2: 40 percent of the directors would be elected by the company’s workforce, with the other 60 percent elected by shareholders.
3: Corporate executives would be required to hold on to shares of stock granted to them for at least five years after they were received and at least three years after a share buyback.
4: Corporate political activity would require the specific authorization of both 75 percent of shareholders and 75 percent of board members.
1: Call me crazy, but I was under the impression that corporations already take into account the interest of their customers, employees, and the communities in which they operate. To fail to do this would be economic suicide. If a company is abusing or neglecting its customers, it will lose their business. Why do we need Elizabeth Warren’s legislation to tell companies to do this?
2: What right does the government have to tell a company how they elect their board of directors? If Warren wants to take over corporate boardrooms from Seattle to Miami, and Boston to Los Angeles, then perhaps she should find a better paying line of work than serving in the United States Senate. She can then buy shares in the companies she wants to reform, and elect new directors on the corporate boards. She certainly does not have a right to tell investors in companies who should compose their corporate boards. That is fundamentally an attack on private property rights.
3: On this point, Warren supporters could at least articulate a clear rationale here: Corporate executives should have a longterm vested interest in a company. In the event of access to “insider information” they should not be able to sell their shares ahead of those who don’t have access to such information.
Even if this piece of the legislation was a good idea, from whence does Warren derive the justification for her power to do this? If she really believes in such restrictions on executive stock sales, she should sit down with major Fortune 500 companies to pitch them on the idea, and get the ball rolling voluntarily, not through government coercion.
4: Setting such a threshold at 75% is nothing more than a thinly veiled attempt to end all corporate political activity. Getting three fourths of a corporate board and a company’s shareholders to agree on anything is a tall order. Doing so in a political context, would be damn near impossible. This is a backdoor to ending the Citizens United Supreme Court ruling which ruled that political campaign contributions are protected under the First Amendment.
Ultimately, Warren’s “Corporate Accountability Act” is a far cry from Stalinism or Maoism. It’s just bad legislation with no Constitutional justification. And that is par for the course on today’s “progressive” left.
People who invest in companies should determine how those companies are run, what executives do with their stock, and the specifics of corporate political activity; not the government.