The heart of the Accountable Capitalism Act is a requirement that companies with more than $1 billion in revenue obtain a corporate charter at the federal level, rather than basing themselves in the most loosely regulated state they can find. (Sorry, Delaware.)
This new charter is meant to address an epidemic of bad corporate behavior, especially the tendency of top executives to value profits over wider well-being. It would obligate executives to consider the interests of all corporate stakeholders — including employees, customers and communities — not just shareholders. It would require that at least 40 percent of company board members be elected by employees, an idea known as co-determination. The bill also contains provisions curbing stock buybacks, which tend to benefit only shareholders, and unilateral political expenditures.
.. it’s a distinct break from the neoliberal capitalism of the recent Democratic Party.
In the 1980s, Milton Friedman enshrined the idea of shareholder value maximization, which told businesses that their sole purpose was to maximize profit for their owners. Rather than pushing back against this obviously selfish, wealth-favoring theory, Democrats got on board. Sure, this framing might need a tweak here, a bit of regulation there, or the carrot of a tax break or two. But super-efficient big businesses would keep the broader economy chugging along for everyone — self-interest would mean we’d all win.
.. some 80 percent of stock market value is owned by 10 percent of the population, little of that benefit trickles down to the rest.
.. All that said, the Accountable Capitalism Act still relies on a fundamental belief that capitalism is good, even as a new generation of Democrats wants to upend that system altogether. On the left, winner-take-all competition — which Warren professes to “love,” by the way — is more and more seen as the root of our country’s ills, not something to preserve. A new wave of socialist candidates are loudly making that case.
.. But Warren isn’t out to get capitalism. She’s out to save it. The senator clearly believes that markets can create wealth.
Supreme Court Pick Has Often Favored Employers in Labor Cases
Brett Kavanaugh sided with SeaWorld in case involving trainer’s death, as well as employer who didn’t want to bargain with union that included undocumented immigrants
A federal appeals-court panel split in 2014 over a case involving a grisly theme-park death, ruling 2-1 that the Labor Department was on sound footing when it sanctioned SeaWorld Entertainment Inc. for safety violations after a trainer was attacked by a killer whale.
The two judges upholding the sanction said that while whale-training is a dangerous occupation, SeaWorld could have taken steps to reduce the hazard. One of those judges was Merrick Garland, the Obama Supreme Court nominee whom Senate Republicans declined to consider after Justice Antonin Scalia died in 2016.
In dissent was Judge Brett Kavanaugh, President Donald Trump’s current nominee for the high court. Judge Kavanaugh said the case raised the question of “when should we as a society paternalistically decide” whether people who choose to work in risky sports and entertainment fields “must be protected from themselves.”
Trump May Kill the Global Recovery
In a sharp departure from this time last year, the global economy is now being buffeted by growing concerns over US President Donald Trump’s trade war, fragile emerging markets, a slowdown in Europe, and other risks. It is safe to say that the period of low volatility and synchronized global growth is behind us.
.. In 2017, the world economy was undergoing a synchronized expansion, with growth accelerating in both advanced economies and emerging markets. Moreover, despite stronger growth, inflation was tame – if not falling – even in economies like the United States, where goods and labor markets were tightening... Stronger growth with inflation still below target allowed unconventional monetary policies either to remain in full force, as in the eurozone and Japan, or to be rolled back very gradually.. Markets gave US President Donald Trump the benefit of the doubt during his first year in office; and investors celebrated his tax cuts and deregulatory policies. Many commentators even argued that the decade of the “new mediocre” and “secular stagnation” was giving way to a new “goldilocks” phase of steady, stronger growth... Though the world economy is still experiencing a lukewarm expansion, growth is no longer synchronized. Economic growth in the eurozone, the United Kingdom, Japan, and a number of fragile emerging markets is slowing... while the US and Chinese economies are still expanding, the former is being driven by unsustainable fiscal stimulus...with the US economy near full employment, fiscal-stimulus policies, together with rising oil and commodity prices, are stoking domestic inflation... the US Federal Reserve must raise interest rates faster than expected, while also unwinding its balance sheet... the prospect of higher inflation has led even the European Central Bank to consider gradually ending unconventional monetary policies, implying less monetary accommodation at the global level. The combination of a stronger dollar, higher interest rates, and less liquidity does not bode well for emerging markets... Despite strong corporate earnings – which have been goosed by the US tax cuts – US and global equity markets have drifted sideways in recent months... The danger now is that a negative feedback loop between economies and markets will take hold. The slowdown in some economies could lead to even tighter financial conditions in equity, bond, and credit markets, which could further limit growth... Since 2010, economic slowdowns, risk-off episodes, and market corrections have heightened the risks of stag-deflation (slow growth and low inflation); but major central banks came to the rescue with unconventional monetary policies as both growth and inflation were falling... These risks include the negative supply shock that could come from a trade war; higher oil prices, owing to politically motivated supply constraints; and inflationary domestic policies in the US... this time the Fed and other central banks are starting or continuing to tighten monetary policies, and, with inflation rising, cannot come to the markets’ rescue this time.Another big difference in 2018 is that Trump’s policies are creating further uncertainty. In addition to
- launching a trade war, Trump is also
- actively undermining the global economic and geostrategic order that the US created after World War II.
.. the Trump administration’s modest growth-boosting policies are already behind us, the effects of policies that could hamper growth have yet to be fully felt. Trump’s favored fiscal and trade policies will crowd out private investment, reduce foreign direct investment in the US, and produce larger external deficits.
- His draconian approach to immigration will diminish the supply of labor needed to support an aging society.
- His environmental policies will make it harder for the US to compete in the green economy of the future.
- And his bullying of the private sector will make firms hesitant to hire or invest in the US.
.. Even if the US economy exceeds potential growth over the next year, the effects of fiscal stimulus will fade by the second half of 2019, and the Fed will overshoot its long-term equilibrium policy rate as it tries to control inflation; thus,
achieving a soft landing will become harder.
.. By then, and with protectionism rising, frothy global markets will probably have become even bumpier, owing to the serious risk of a growth stall – or even a downturn – in 2020.
.. With the era of low volatility now behind us, it would seem that the current risk-off era is here to stay.
How Dark Money, Gerrymandering And Democratic Complacency Altered Wisconsin Politics
.. Six years before Trump’s win, the state’s voters elected conservative populist Scott Walker governor. With the help of a Republican-controlled legislature, Walker waged an unprecedented assault on public employee unions in the state and later signed a right to work bill, which undermined private-sector unions.
.. he would go along to these small towns and speak to people about this danger of corporate influence on their lives.
DAVIES: And how far into the 20th century did this sort of progressive trend hold in Wisconsin? And I note that Senator Joe McCarthy – probably the most notorious anti-communist of the century – came from that state.
.. he undertook a pretty radical approach to dealing with public employee unions. What did he propose to do?
KAUFMAN: Well, he proposed to all but strip them of collective bargaining rights, which is their ability to speak as a collective voice around wages, benefits and other workplace concerns, workplace safety, basically, reducing their ability to act as a collective voice. He exempted the police and fire department unions. Some would say that cynically because some of these unions supported him.
.. Tim Cullen, a moderate Democratic state senator – he said, the one thing that was non-negotiable was the automatic dues checkoff.
.. He stoked resentment against the public workers. It was clear in his inaugural address in 2011. He said the public employees can no longer be the haves, and the taxpayers can no longer be the have nots. Privately, he even went further.
There’s a famous recording of him speaking to a billionaire donor where she says when will we become a completely red state? When will we become a right-to-work state? She conflated the two. And he answered, you know, have you seen what we’re going to do with the public employees? And then he went on. He said, you know, because you use divide and conquer. What he meant by that was he was going to first attack the public employees. And then several years later, he instituted a right-to-work law against the private sector employees. Now you have a state that went from 14 percent union density when he was elected to 8 percent.
.. in 2016, the presidential election arrives in Wisconsin, as it does in the rest of the country. The Democratic primary – Bernie Sanders beats Hillary Clinton by 13 points. Why did Hillary Clinton have trouble connecting to Democratic voters in Wisconsin?
.. she has never been a close ally of labor. Wisconsin progressives were deeply wounded by the attacks on labor. She was a former corporate board member of Walmart, a notoriously anti-union company. And she also supported for many, many years free trade agreements, like NAFTA and the China’s membership into the World Trade Organization, that have really impacted the industrial Midwest in such a profound way. People are aware that you can drive by a factory, and they’ll say, oh, this factory moved to Mexico and then went on to Vietnam. They are very keenly aware. Other factors played a role – automation and so on – but these agreements really impacted particularly the industrial Midwest – Michigan, Wisconsin, Ohio.
DAVIES: And particularly unionized workers, I think.
.. I think people forget that Donald Trump’s message during the campaign – he also twinned his message of resentment – racial resentment – with a defense of the welfare state. You can look at his speeches. He staged five huge rallies in Wisconsin. He almost always mentioned, we’ve got to protect Social Security and Medicare, and he railed against these free trade agreements. So there was a different kind of Republican message that resonated with a certain sector of the population enough to put him over the top, coupled with Hillary Clinton’s noncampaigning and non-effort in these places, and it really impacted the race.
.. There was frankly a weak Democratic opposition to his message, and there was a stoking of resentment in a time of economic insecurity. That is very powerful. And they weren’t – people weren’t being offered an alternative – a very compelling one anyway.
.. Another example is gerrymandering. In 2012 election, Wisconsin Democrats won an aggregate of almost 200,000 more votes than the Republicans, and yet they lost seats. That…
DAVIES: You’re talking about in the state legislature.
KAUFMAN: In the state legislature in the assembly, and that leads to demoralizing (laughter) of your party. I mean, it’s hard to get candidates to run when they know they’re going to be defeated if the district is just so heavily drawn to favor the Republicans where – and the Democratic seats are – you know, they’ll routinely win more than 70 percent of the vote. So they pack them in. And that case was, you know, brought to the U.S. Supreme Court. It’s the first partisan gerrymandering case to go to the Supreme Court in more than three decades because the federal court agreed with the plaintiffs – the Democrats – that their rights had been denied because it was so extreme.