Ok, I've finished reading the book by Peter Barnes, and I really think he's on to something.
First, the website link:
http://onthecommons.org/
This is a collaborative website between Peter are a few other authors on similar subjects, all focused on getting people's attention to the commons and our need to safeguard it and protect it.
The site is a project of the Tomales Bay Institute, a search for which came up with a whole bunch of interesting links, especially this one! I'll have to check those out a bit later.
Ok, back to the book. The core concept is that we need to establish property rights for the commons, and put trusts on par with corporations that would balance the needs of future generations and all life on earth with the corporation's need for profits. He cites the Alaska Permanent Fund as an example, and suggests that similar funds could be set up in other states, at a national level, and even global for something like the ocean.
I'm hoping that the book will be translated into Spanish so the new leaders in Latin America can try out the ideas down there.
Thursday, November 30, 2006
Friday, November 17, 2006
Community Investment Trust
I'm almost done with Peter's book, but I just had something come to mind that I need to get down.
A Community Investment Trust would be a way to start building what I'm foreseeing as the future. The Trust would be open for people to invest in, and part of the interest would go to a charity of their choice within the community. The principle would always grow, and the more people that invested, the better.
A Community Investment Trust would be a way to start building what I'm foreseeing as the future. The Trust would be open for people to invest in, and part of the interest would go to a charity of their choice within the community. The principle would always grow, and the more people that invested, the better.
Tuesday, November 14, 2006
Capitalism 3.0
There's a new book out by Peter Barnes, "Capitalism 3.0". Peter is the co-founder of Working Assets, and his thesis is that we need to upgrade our economic operating system to incorporate the concept of the commons. Just started reading it, but it sounds really good.
Find it here.
I'll post a review when I'm done with the book. And if anyone has contact information for Peter, please let me know.
Find it here.
I'll post a review when I'm done with the book. And if anyone has contact information for Peter, please let me know.
Sunday, November 05, 2006
Donation Certificates II
This is an idea that I've been working on for a while. The core concept is that we should be building our civilization on a foundation of wealth instead of a foundation of debt.
The idea behind Capitalism is that capital is made available by people who have it to those that need it. That usually comes with a price. That price is interest rates. If you borrow money from a bank, they will charge you interest on that debt. If you have money in the bank, they pay you an interest on that wealth, because they can offer that money to other people in the form of loans. That is the basic concept behind banking.
There's nothing wrong with that, except that the people who have money are getting more benefit than the people actually using that money to improve our lives. The current system of borrow and spend, then pay back with interest does only one thing. It consolidates the wealth of our economy into the hands of those with the money.
That means it consolidates the power into the hands of those with money. And that's against everything that the United States stands for.
I believe that our growing economy should be the funding source for our charities while at the same time providing a steadily growing source of financial security for our future. Social Security was never meant to be a savings program. It's an insurance program for those who need a boost. If we don't need it, we should leave it to those people who do.
If you open a high yield savings account, you can get interest on that money. Let's use 4% for our examples. My idea is to split that return in half. 2% would build the balance of the account, and 2% would go to a charity or cause that you support. That's the core concept.
A charity could sell bonds and handle the account. You would buy the bonds, and they would put the money into an account earning 4%, and each month when the bank paid interest on the account, half of that interest would be available to the charity to fund their programs. So, if you buy $100.00 worth of bonds, at the end of the year you will have $102, with $2 going to the charity. Doesn't sound like much? What if you buy $1,000 worth. At the end of the year, you will have $1,020, and $20 will go to fund the charity. $20 per year is a standard annual membership fee for many non-profit organizations. Get some friends to also buy some bonds, and the account balance goes up. And with many banks, the higher the balance, the higher the interest rate they will be willing to pay, because it means that they have more money to lend out at 10% to people buying homes or financing a business venture.
President Eisenhower said it this way:
What the President was leaving out was the fact that investment in infrastructure, be it a school, a power plant, a highway or a hospital, provides the community with value for years or decades into the future, but spending it on a bomb means that as soon as that bomb explodes, that money is gone. And since there is no purpose to building a bomb except for it to explode, even building the bomb is a waste of the money when compared to other potential uses. And it must be said that the money goes to the military contractors.
I'm not saying that we should not have a military. I'm saying that we should understand the true cost of what we are putting our money towards. If it is still worth that cost, so be it.
In finance, a similar principle can be cited. Every dollar that goes directly to a charity goes to do good work. But the money once given is gone. With our economy building the way it is, there is a better way. With Donation Savings accounts and Non-Profit Bonds, the main advantage to the donor is that the amount of money never goes down. Nobody loses money. It's an investment that always grows and never loses value.
This is not going to replace direct donations. Many charities have budgets of a million dollars or more. To get that from a 4% Interest rate would take an account balance of $50 million dollars. While this might not be impossible for someone like Bill Gates, it's still a heck of a lot of money. And in order to be comfortable with that amount of money "just sitting in the bank" will take a major adjustment in our attitudes about money and a better cultural understanding of the entire monetary system.
However, considering the money that we raise for nationwide political campaigns, $50 each from one million people doesn't seem that impossible anymore.
Please download my PowerPoint presentation and send me feedback. You can also view the presentation on this website.
Please send me feedback. I need help to get this off the ground.
And to those who are reading this wondering why I'm working on this 2 days before V-Day, I've actually been working on it for months. I just finally had the time to put it together and post it.
The idea behind Capitalism is that capital is made available by people who have it to those that need it. That usually comes with a price. That price is interest rates. If you borrow money from a bank, they will charge you interest on that debt. If you have money in the bank, they pay you an interest on that wealth, because they can offer that money to other people in the form of loans. That is the basic concept behind banking.
There's nothing wrong with that, except that the people who have money are getting more benefit than the people actually using that money to improve our lives. The current system of borrow and spend, then pay back with interest does only one thing. It consolidates the wealth of our economy into the hands of those with the money.
That means it consolidates the power into the hands of those with money. And that's against everything that the United States stands for.
I believe that our growing economy should be the funding source for our charities while at the same time providing a steadily growing source of financial security for our future. Social Security was never meant to be a savings program. It's an insurance program for those who need a boost. If we don't need it, we should leave it to those people who do.
If you open a high yield savings account, you can get interest on that money. Let's use 4% for our examples. My idea is to split that return in half. 2% would build the balance of the account, and 2% would go to a charity or cause that you support. That's the core concept.
A charity could sell bonds and handle the account. You would buy the bonds, and they would put the money into an account earning 4%, and each month when the bank paid interest on the account, half of that interest would be available to the charity to fund their programs. So, if you buy $100.00 worth of bonds, at the end of the year you will have $102, with $2 going to the charity. Doesn't sound like much? What if you buy $1,000 worth. At the end of the year, you will have $1,020, and $20 will go to fund the charity. $20 per year is a standard annual membership fee for many non-profit organizations. Get some friends to also buy some bonds, and the account balance goes up. And with many banks, the higher the balance, the higher the interest rate they will be willing to pay, because it means that they have more money to lend out at 10% to people buying homes or financing a business venture.
President Eisenhower said it this way:
Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed.
This world in arms is not spending money alone.
It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children.
The cost of one modern heavy bomber is this: a modern brick school in more than 30 cities.
It is two electric power plants, each serving a town of 60,000 population.
It is two fine, fully equipped hospitals.
It is some 50 miles of concrete highway.
We pay for a single fighter with a half million bushels of wheat.
We pay for a single destroyer with new homes that could have housed more than 8,000 people.
This, I repeat, is the best way of life to be found on the road the world has been taking.
This is not a way of life at all, in any true sense. Under the cloud of threatening war, it is humanity hanging from a cross of iron.
What the President was leaving out was the fact that investment in infrastructure, be it a school, a power plant, a highway or a hospital, provides the community with value for years or decades into the future, but spending it on a bomb means that as soon as that bomb explodes, that money is gone. And since there is no purpose to building a bomb except for it to explode, even building the bomb is a waste of the money when compared to other potential uses. And it must be said that the money goes to the military contractors.
I'm not saying that we should not have a military. I'm saying that we should understand the true cost of what we are putting our money towards. If it is still worth that cost, so be it.
In finance, a similar principle can be cited. Every dollar that goes directly to a charity goes to do good work. But the money once given is gone. With our economy building the way it is, there is a better way. With Donation Savings accounts and Non-Profit Bonds, the main advantage to the donor is that the amount of money never goes down. Nobody loses money. It's an investment that always grows and never loses value.
This is not going to replace direct donations. Many charities have budgets of a million dollars or more. To get that from a 4% Interest rate would take an account balance of $50 million dollars. While this might not be impossible for someone like Bill Gates, it's still a heck of a lot of money. And in order to be comfortable with that amount of money "just sitting in the bank" will take a major adjustment in our attitudes about money and a better cultural understanding of the entire monetary system.
However, considering the money that we raise for nationwide political campaigns, $50 each from one million people doesn't seem that impossible anymore.
Please download my PowerPoint presentation and send me feedback. You can also view the presentation on this website.
Please send me feedback. I need help to get this off the ground.
And to those who are reading this wondering why I'm working on this 2 days before V-Day, I've actually been working on it for months. I just finally had the time to put it together and post it.
Sunday, October 29, 2006
New presentation for Donation Certificates
I've finished putting together a basic presentation on my idea for Donation Certificates. You can view the slides here.
Please post comments here or send me emails. I'd like feedback on the idea, and help setting this up.
Please post comments here or send me emails. I'd like feedback on the idea, and help setting this up.
Sunday, September 24, 2006
Question "Socially Responsible Investing"
Got a post on the Northwest Progressive Community listserv.
I don't invest through mutual funds, mostly because I can't afford the minumum investment requirements for most of them. The only exception is within my 401K, but I don't have that many options there.
What I do instead is invest directly in stocks as a micro-investor. Sharebuilder.com makes that cheap and easy. There are other online investing companies as well, but sharebuilder has the lowest cost and lowest minimums. I currently have around $7,000 in their accounts.
I've always had a problem with socially responsible investing. My own reason is that it leaves the high-dividend, questionable ethics stocks in the hands of people who literally don't care about the environment, don't care about the middle class, and are willing to destroy the future in order to achieve immediate financial gains.
I strongly feel that we need to redistribute the wealth of our nation, and that a change like that must come from the bottom up. We have to put dividends into the hands of the people who will do something constructive and positive with the money, not just move it to offshore tax havens.
I can go on and on about this.
Here's an article that tells the story about SRI Funds.
http://www.organicconsumers.org/2006/article_2415.cfm
Learn more at Paul Hawken's group, the Natural Capital Institute
http://www.naturalcapital.org/
I don't invest through mutual funds, mostly because I can't afford the minumum investment requirements for most of them. The only exception is within my 401K, but I don't have that many options there.
What I do instead is invest directly in stocks as a micro-investor. Sharebuilder.com makes that cheap and easy. There are other online investing companies as well, but sharebuilder has the lowest cost and lowest minimums. I currently have around $7,000 in their accounts.
I've always had a problem with socially responsible investing. My own reason is that it leaves the high-dividend, questionable ethics stocks in the hands of people who literally don't care about the environment, don't care about the middle class, and are willing to destroy the future in order to achieve immediate financial gains.
I strongly feel that we need to redistribute the wealth of our nation, and that a change like that must come from the bottom up. We have to put dividends into the hands of the people who will do something constructive and positive with the money, not just move it to offshore tax havens.
I can go on and on about this.
Here's an article that tells the story about SRI Funds.
http://www.organicconsumers.org/2006/article_2415.cfm
Learn more at Paul Hawken's group, the Natural Capital Institute
http://www.naturalcapital.org/
Thursday, August 03, 2006
Let's fix the savings rate in this country
I've started sending out the following letter to Bank Presidents in Washington State.
Dear Bank President,
I am very concerned with the Savings Rate in the United States. I heard recently that the people of the US have had a negative savings rate for the past 15 months. I'm hoping that you can help me find a way to fix that, because I believe that it is damaging to our economy.
I also get calls every single day from charities asking for a donation, and most of them tell me that it is getting harder and harder for them to meet their budgets and keep their promises. But I don't make enough money myself to both save and help fund the charities that our communities depend on. So I'm looking for a way to do both at the same time. I am searching the banking industry in Washington State for a financial product that will meet my needs.
I would like to open a savings account where the interest paid each month would be split in half, with half going back toward the account balance and half being sent by the bank to a charity of my choice.
Do you have a product or service that would be close to what I am searching for? What kind of account balance would be necessary for you to be willing to justify the administrative costs?
If I can find a bank that would provide the service of setting up and managing an account of this nature, I would do everything possible to promote its growth in the banking service market.
Please contact me with any questions about this quest.
Chad Lupkes
Seattle, Washington
You can find the list of banks that I'm contacting here.
Dear Bank President,
I am very concerned with the Savings Rate in the United States. I heard recently that the people of the US have had a negative savings rate for the past 15 months. I'm hoping that you can help me find a way to fix that, because I believe that it is damaging to our economy.
I also get calls every single day from charities asking for a donation, and most of them tell me that it is getting harder and harder for them to meet their budgets and keep their promises. But I don't make enough money myself to both save and help fund the charities that our communities depend on. So I'm looking for a way to do both at the same time. I am searching the banking industry in Washington State for a financial product that will meet my needs.
I would like to open a savings account where the interest paid each month would be split in half, with half going back toward the account balance and half being sent by the bank to a charity of my choice.
Do you have a product or service that would be close to what I am searching for? What kind of account balance would be necessary for you to be willing to justify the administrative costs?
If I can find a bank that would provide the service of setting up and managing an account of this nature, I would do everything possible to promote its growth in the banking service market.
Please contact me with any questions about this quest.
Chad Lupkes
Seattle, Washington
You can find the list of banks that I'm contacting here.
Friday, July 28, 2006
SpaceDev Recommendations
After doing the research, I voted as follows:
Wednesday, June 21, 2006
$865MM IN CEO COMPENSATION WHILE SHAREHOLDERS SUFFER $640BN IN LOSSES
The Corporate Library study – Pay for Failure: The Compensation Committees Responsible – highlights 11 of the largest companies in the U.S. that combined high levels of CEO compensation and poor performance over the past five years.
Portland, Maine, March 31, 2006 – A newly released study by The Corporate Library ("TCL") of executive incentive compensation practices finds that the gap between pay and performance over the past five years is most pronounced at 11 of the largest U.S. companies. At the 11 companies in the study, Pay for Failure: The Compensation Committees Responsible, The Corporate Library found that compensation committees authorized a total of $865 million in pay to CEOs who presided over an aggregate loss of $640 billion in shareholder value. The 11 companies are some of the biggest household names in Corporate America. They are:
AT&T Inc. (T)
BellSouth Corporation (BLS)
Hewlett-Packard Company (HPQ)
Home Depot, Inc. (The) (HD)
Lucent Technologies Inc. (LU)
Merck & Co., Inc. (MRK)
Pfizer Inc. (PFE)
Safeway Inc. (SWY)
Time Warner Inc. (TWX)
Verizon Communications Inc. (VZ)
Wal-Mart Stores, Inc. (WMT)
Each of the 11 companies: received a high risk rating from The Corporate Library; paid their CEOs in excess of $15MM in the last two available fiscal years; had a negative return to stockholders over the last five years; and underperformed their peers over the same period. “Our research shows that the link between long-term value growth and long-term incentive awards is broken at too many companies – if it was ever forged properly in the first place,” says one of the report’s authors, TCL Senior Research Associate Paul Hodgson.
The study examines in detail the incentive policies at each of the 11 companies; finding high proportions of fixed pay, poorly chosen performance metrics, and rewards for below median performance. The report also looks at the make-up of the compensation committees at the companies, listing the members by name, along with their compensation. The report also gives examples of Pay for Success compensation.
The full report is available from www.thecorporatelibrary.com for $150.
About The Corporate Library, LLC
The Corporate Library, headquartered in Portland, ME, is the leading resource for independent corporate governance and compensation information and analysis of U.S. top corporations. Founded in 1999, it continues to be the authority on corporate governance matters, as evidenced by the frequency with which key media, business and government leaders seek its unique insight and objective perspectives. Additional information on The Corporate Library and its suite of online corporate governance data and analysis products can be found on its website at www.thecorporatelibrary.com.
Contact:
Melanie Whittier
Media Relations, The Corporate Library
mwhittier@thecorporatelibrary.com
207 874-6921
Portland, Maine, March 31, 2006 – A newly released study by The Corporate Library ("TCL") of executive incentive compensation practices finds that the gap between pay and performance over the past five years is most pronounced at 11 of the largest U.S. companies. At the 11 companies in the study, Pay for Failure: The Compensation Committees Responsible, The Corporate Library found that compensation committees authorized a total of $865 million in pay to CEOs who presided over an aggregate loss of $640 billion in shareholder value. The 11 companies are some of the biggest household names in Corporate America. They are:
AT&T Inc. (T)
BellSouth Corporation (BLS)
Hewlett-Packard Company (HPQ)
Home Depot, Inc. (The) (HD)
Lucent Technologies Inc. (LU)
Merck & Co., Inc. (MRK)
Pfizer Inc. (PFE)
Safeway Inc. (SWY)
Time Warner Inc. (TWX)
Verizon Communications Inc. (VZ)
Wal-Mart Stores, Inc. (WMT)
Each of the 11 companies: received a high risk rating from The Corporate Library; paid their CEOs in excess of $15MM in the last two available fiscal years; had a negative return to stockholders over the last five years; and underperformed their peers over the same period. “Our research shows that the link between long-term value growth and long-term incentive awards is broken at too many companies – if it was ever forged properly in the first place,” says one of the report’s authors, TCL Senior Research Associate Paul Hodgson.
The study examines in detail the incentive policies at each of the 11 companies; finding high proportions of fixed pay, poorly chosen performance metrics, and rewards for below median performance. The report also looks at the make-up of the compensation committees at the companies, listing the members by name, along with their compensation. The report also gives examples of Pay for Success compensation.
The full report is available from www.thecorporatelibrary.com for $150.
About The Corporate Library, LLC
The Corporate Library, headquartered in Portland, ME, is the leading resource for independent corporate governance and compensation information and analysis of U.S. top corporations. Founded in 1999, it continues to be the authority on corporate governance matters, as evidenced by the frequency with which key media, business and government leaders seek its unique insight and objective perspectives. Additional information on The Corporate Library and its suite of online corporate governance data and analysis products can be found on its website at www.thecorporatelibrary.com.
Contact:
Melanie Whittier
Media Relations, The Corporate Library
mwhittier@thecorporatelibrary.com
207 874-6921
Thursday, May 11, 2006
Reward Qwest!
When an elected official does something right, we reward them. If that official is a candidate, one way that we reward them is by sending donations their way.
Corporations are not the enemy by default. Abuse of power is the problem that progressives are fighting against. So, when a corporation does something right, they deserve a reward.
Qwest has consistently refused to turn over phone records to the NSA. Good on them! I think they need a reward, and the best reward they can get is for us to buy their stock. (NYSE:Q). Right now, the price is $6.42, and it's been depressed since 2001. Maybe this was a stock price based attack by the rest of the market, I don't know.
If you buy stock on a regular basis, consider sending a message to Qwest that we appreciate their resistance against the Bush administration.
--
Chad Lupkes
Democracy for Wall Street
Corporations are not the enemy by default. Abuse of power is the problem that progressives are fighting against. So, when a corporation does something right, they deserve a reward.
Qwest has consistently refused to turn over phone records to the NSA. Good on them! I think they need a reward, and the best reward they can get is for us to buy their stock. (NYSE:Q). Right now, the price is $6.42, and it's been depressed since 2001. Maybe this was a stock price based attack by the rest of the market, I don't know.
If you buy stock on a regular basis, consider sending a message to Qwest that we appreciate their resistance against the Bush administration.
--
Chad Lupkes
Democracy for Wall Street
Wednesday, May 10, 2006
Thoughts on changing institutions
Fundamentally, there are two ways to change an institution. You can choose to either make changes from the inside, or mandate changes from the outside. Situations determine which of these is more effective. For corporations, because they are chartered and under the control of the states, changes in the law to force changes from the outside may be more long term. Changing them from the inside usually requires maintaining our value system while moving up the ranks giving the illusions of their value system. It's something I considered, and decided against. The only other option for changing from the inside is becoming a majority shareholder and putting individuals on the Board of Directors that will put human needs first. But the Republican Congress have changed the federal laws managed by the SEC to deny shareholder resolutions and board candidates from even getting on the ballot.
Unlike a lot of people in my circles, I don't fundamentally object to the concept of wealth and power. What I object to is the abuse of that position of wealth and the abuse of power. Both of these should be scrutinized and perpetrators prosecuted to the fullest extent of the law. I don't care how much money someone makes, because money is a man-made illusion. I have no objection to capitalism, but it doesn't work for everyone. Any distribution system for goods and services should have as a mandate that everyone receive their basic needs. Like I said yesterday, when everyone has "enough" to survive, all of us will have more than we can possibly imagine. That's not Socialism in my opinion. Everything would still cost money, but we would recognize money for the illusion that it is. Life, Liberty and the pursuit of Happiness. That should be the goal. Right now we are on a quest for survival, security and the struggle for basic needs. How much better could we be doing if we really focused on our goals instead of our distractions?
Thursday, April 27, 2006
Project Update
Hi everyone,
Ok, I had my meeting with Sue Donaldson of the Washington Appleseed Foundation on April 18th, and we went over the PowerPoint presentation that I've developed so far.
Sue recommended that I get in touch with Homestreet Bank. And she was willing to make an introduction. She also suggested that I do some research on the Community Reinvestment Act.
Also, just found this article about shareholders taking their ownership seriously in the Puget Sound Business Journal. It's from 2004, and I'll try and find out what the status of the proposed SEC rule is.
Sunday, April 02, 2006
3M Recommendations
I just posted my 3M recommendations for their 2006 Annual Meeting. Comments welcome, as always.
Friday, March 31, 2006
Project Update
The good news is that the idea caught the attention of some people in Rep. Jim McDermott’s office. One of his chiefs of staff, Damian Cordova, is interested in hearing more as I develop the idea, and might be interested in a meeting sometime.
I have an appointment with Sue Donaldson of the Washington Appleseed Foundation on April 18th. I hope I’ll be able to get some good questions and maybe work out some answers. I have a feeling this is going to take a lot more of my time as we get going.
Some of the questions that have come up:
How is this different from a normal savings account?
Who has Fiduciary Responsibility?
What is the Federal Government component that might need legislation?
Any ideas?
I have an appointment with Sue Donaldson of the Washington Appleseed Foundation on April 18th. I hope I’ll be able to get some good questions and maybe work out some answers. I have a feeling this is going to take a lot more of my time as we get going.
Some of the questions that have come up:
How is this different from a normal savings account?
Who has Fiduciary Responsibility?
What is the Federal Government component that might need legislation?
Any ideas?
Tuesday, March 28, 2006
Good places for your money
Here is a list of places that I've found that enable Socially Responsible Investing.
Please contact me if you know of something that should be on this list!
Please contact me if you know of something that should be on this list!
Monday, March 27, 2006
End Corporate Personhood
This is a collection of links for groups that are working on ending the tyranny of Corporate Personhood.
Sunday, March 19, 2006
Texas Instruments Recommendations
Texas Instruments will be having their annual meeting on April 20th, 2006. You can view my recommendations here.
Wednesday, March 15, 2006
Privatizing Welfare
Thanks to Karen Backman for sending this article to Democracy for Washington from the Wall Street Journal:
Privatize the Welfare State, by HOWARD HUSOCK
This is a really interesting article, from a high powered advocate of changing the current system of social funding into a market driven system of private charities. There are several assumptions that Mr. Husock has made when writing this article, and quite a few questions that I have that I would like to put on the table.
It is not a certainty that “the federal government will continue to devote billions to activities known as ‘social services.’” Starting the article with that assumption shows how far away from reality the author is. The Conservatives in the Republican Party have been working hard to eliminate the social services funding that so many people in our country depend on. I don’t want to say that they want to eliminate the actual services, just the funding coming from the government. Never mind that the Constitution says it is one of the purposes of the Federal Government to ‘promote the general Welfare’.
Mr Husock refers to ‘robust public debate’ about ‘whether … parts of the New Deal legacy still make sense’. What are the positions in this debate? He doesn’t say.
Then he goes into ‘a historic confluence of circumstances’. The wave of charitable giving forgets the fact that the Baby Boomer generation is defined by it’s own watchers as the most selfish generation in history. Consumerism runs rampant, and has since the phrase ‘keep up with the Jones’ came into our lexicon. TV puts thousands of advertisements in front of our eyes on a daily basis. In the movie “Good Night, and Good Luck”, the Aluminum and Tobacco industry commercials were real. That’s how the news media was funded in the 1950’s, and the only thing that has changed since is that the corporations now own the media outlets themselves outright. Another assumption that he is presenting is that the Federal Government will be for the foreseeable future just as incompetent and unable to be responsible with the public money as it has over the last 5 years. I have to agree. As long as the Republican party is allowed to stay in power, that will be true. Remember, Cheney has said openly that “Reagan showed us that deficits don’t matter”. We knew that was false when he said it, and we’re seeing the results.
Then he comes to the concept of a new generation of social entrepreneurs. This I strongly agree with. But the question he’s not asking is why. Here’s my take. I think the non-profit industry is seeing a massive upsurge because we see the generation after the Boomers coming to terms with the fact that without this upsurge this country won’t be worth living in. Let me put it another way. The youth, meaning the children of the Boomers like me in Generation X, are seeing that the Federal Government has failed us. This administration is not keeping the promises set forward by the Constitution, the Declaration of Independence. They have been fighting against the policies of social responsibility since FDR's administration put them forward in the 1930's. And they have arranged the current political system such that we (GenX) are unable to gain access to the political process enough to be able to try and fix what we see as wrong. Paul Hackett. Debi Golden. How many others?
I'm not attacking the Boomers. I'm asking you to take a look at the world that your generation has created, and judge for yourself if that world is something you are proud of. And I'm asking you to join Generation X to fix this mess.
Let me give a personal example. I am saving money for my future. I’m saving as much as I possibly can, to the detriment of my life today. Why? Because I don’t think that Social Security will be there for me when I need it. Because I can’t trust my government to keep it’s promises. Twist that any way you wish, but that’s the way I feel. I’m going to fight until the end of time to fix the system, from within the political process and from without, but I feel so powerless politically I’m having to do everything possible to protect my own foundation. And that prevents me from donating to any of the charities and political efforts that contact me every single day, either by phone, letter or email. How many others are in my position? Too many.
So, this is a massive influx of non-profit effort, funded by the Boomers who suddenly have all their retirement benefits that corporations are trying to steal, and managed by a generation of people who are tired of seeing their civil society being destroyed by that theft.
This is something to be proud of? I don’t think so.
Monday, March 13, 2006
Taking on The Free Enterprise Action Fund
I just found this when doing a search for 'social activist investment' in Google.
http://www.freeenterpriseactionfund.com/about.html
Well, well. This reminds me of the Powell Memo.
"Business is under attack, run for the hills and plan your strategy for the next 30 years on how to take back this country!" - paraphrased of course.
Give me a break. These people may have a clue on how to put together a financial organization and buy some stock, but that's about it. They don't know what the Constitution says, they don't know the vision put forward by Thomas Jefferson and Alexander Hamilton, and I'll venture to say that they don't understand what Adam Smith wrote in 1776. I haven't read the book "Wealth of Nations" myself yet, but it's on my list. What I do know about the book is that it is an Academic work about Economic Theory, and it flies in the face of where the current US economy is going.
So, I want to address some of the accusations that are put forward on that page. Let's see what I can come up with here.
"Left-wing social and political activists are harnessing the power, resources and influence of publicly-owned corporations to advance their social and political agendas. (1) Frustrated by their failure to advance their agendas in the public political process, these activists use capitalism against capitalism under the guise of “corporate social responsibility” and “socially responsible investing.” (2) Their movement threatens shareholder value and the American system of free enterprise."
How can we not?! It's been working wonderfully for the Conservative Movement since the late 1960's, and at that point in time they were just as frustrated as we are now. It's actually the concept of "socially responsible investing" that I'm also worried about, but for different reasons. I don't think we help our causes at all by letting the money being collected by the Oil companies and the Military-Industrial-Congressional Complex continue to go into the hands of a small number of people, which is what is happening now. All companies should be investment targets, not just the ones that we like. What's the point of having 13% of the investment market if we're letting some companies get away with murder?! Literally!! What do you think Iraq is? It's murder as far as I'm concerned, but we let the oil companies and arms manufacturers get away with it and have their shareholders get all the profits because we're too 'good' to touch their stocks! I think it's critical to invest in these companies, because otherwise we have no control at all, and no voice in anything that they are doing.
Hmm, the minimum investment in their fund is $1,000 with subsequent investments at $250. Not as bad as many of the other funds that I've looked at, but still, who among the people on the street can pull $1,000 out of their savings account to put into ANY investment.
I digress...
Our Core Principle. “The social responsibility of a business is to increase its profits.” [Milton Friedman Winner of the 1976 Nobel Prize in Economics]
I think there is a Supreme Court case that put this into our legal framework as well. Ok, fine. So our businesses are supposed to earn the profits and grow the economy. And then what? What do the owners do with their money? Are they donating to causes that need money? I keep hearing people talking in support of free enterprise and against government funding to social programs that if the need is really there, the money will be there because good people will donate. I'm calling that total BS. I get calls every single day from charities that are begging for money to stay in operation. There are dozens of charities within 5 miles of where I live that are struggling. The Portland Rescue Mission chairity is having to scale back operations because the money is not there. So where are the owners of Exxon-Mobil or Haliburton? They're moving their corporate headquarters overseas so they DON'T HAVE TO PAY TAXES, and hoarding their money in off-shore bank accounts where the interest isn't taxed either. They don't give a damn about the charities that our people need, sometimes to survive.
What actions will the Fund take?
- Engaging corporate managements.
- Using the media.
- Marshalling support for Fund activism.
There's more, but why bother. They are doing the same thing that people have done since the beginning, advocating for their ideological position and for an increase in their financial return. Yeah, so? Are they saying that they should be able to do this while those of us in the Social Responsibile Investment community do not? To bad they don't have any means of making that threat a reality. What are they going to do, encourage companies to take their stocks off the market? Or refuse any and all shareholder resolutions? Clamp down on media outlets that advertise SRI funds? They can't. Because if they do these things, they're preventing themselves from continuing their own activities.
However, here is something I somewhat agree with them on:
We believe that social activist investors and anti-business activists threaten shareholder value and the American system of free enterprise.
I'm not against business. I fully support the capitalist system of economics. Capitalism is a method of the distribution of goods and services that uses capital and the collection of capital in order to get things done. There's nothing wrong with that until someone comes along and tries to say that because they have lots of money, their voice should be heard above those that don't have the same amount of money in the political arena. So, those shareholders who hold a majority in the stock of a company are right now pushing these business managers and CEO's to ignore their own best interest and pollute the air, water and airwaves with poison. And if the "social responsibility" of a company is to make money, then they most certainly are threatening shareholder value and the American system of free enterprise", because they are pissing off the people who work for these companies beyond the breaking point.
There should be a wall between Wall Street and the State that is as high as the wall between Church and State.
I don't want to move towards Socialism or Communism. I like the fact that if I have an idea for a business, I have the opportunity start a business and try and sell that product or service in the market. What I don't like is that unless I have the money to pay for the advertising needed to get the word out about my product or service, big corporations can quickly come out with similar or even the same product or service and steal my thunder. And they can pay the dividends that go into the pockets of their shareholders that support certain candidates for political office who will write and pass laws that ALLOW THESE COMPANIES TO GET AWAY WITH IT!
So this is quite the post. Here's the bottom line:
If it is the responsibility of a business to make money for their shareholders, it is the responsibility of the public to become those shareholders so we can make sure that the profits being made are going towards causes that we support. And that's what I'm preaching. Let the companies make all the money they want until we can get the laws changed. Just make sure that you are gaining a benefit from that money in the big picture. If you want your air and water polluted, then let them continue to do business like they have been. If you want to make a change, it's up to us. We have the power to turn things around in this country, and in this economy. And nobody can take that power away without taking away their own power.
Monday, March 06, 2006
Dear National Space Society,
I have been a member of the NSS for several years, but this year I just can't afford it. I received my 'final reminder' letter today, and I responded by email. Here is what I sent to them:
Dear National Space Society,
I just received my last reminder letter from Buzz Aldrin, and I wanted to reply on why I am not renewing my membership. To be completely candid, I just don't have the money. I can't afford $60, I can't afford $30, I can't afford $5. I am starting to break into tears whenever I get another donation request through the mail or over the phone, because every single charity that I am aware of deserves all the money that they are asking for to fund your educational programs, their medical research and whatever else a charity might be asking for.
Please tell Mr. Aldrin that is why I have not renewed my membership in the NSS. I fully support what you are doing and what you stand for. You have done nothing wrong.
Thank you for everything that you do in support of a positive future for our children. Please don't give up, and don't quit. Neither will I.
---
Here is what I decided not to send to them:
I blame George Bush for this disaster, along with all the others that he has had happen on his watch. The Conservative fools in power are not Republicans, and they are destroying the party of Abraham Lincoln, Teddy Roosevelt and Dwight Eisenhower, while at the same time working hard to destroy the Democratic Party of Thomas Jefferson and John Kennedy. These destroyers are constantly telling people that the market will provide for people and the charities that people depend on, and that the rich people will step forward and make the donations that are necessary. This is a flat out lie, and they know it is a lie, and they do not care.
I am spending every waking moment, every dime I have and every breath in my body trying to rid this country of these people and their ideology.
---
One last thought on this. I do believe the market will provide for the needs of our charities and our people. It will be able to do that when we have taken it back from the people who have stolen it from us.
Dear National Space Society,
I just received my last reminder letter from Buzz Aldrin, and I wanted to reply on why I am not renewing my membership. To be completely candid, I just don't have the money. I can't afford $60, I can't afford $30, I can't afford $5. I am starting to break into tears whenever I get another donation request through the mail or over the phone, because every single charity that I am aware of deserves all the money that they are asking for to fund your educational programs, their medical research and whatever else a charity might be asking for.
Please tell Mr. Aldrin that is why I have not renewed my membership in the NSS. I fully support what you are doing and what you stand for. You have done nothing wrong.
Thank you for everything that you do in support of a positive future for our children. Please don't give up, and don't quit. Neither will I.
---
Here is what I decided not to send to them:
I blame George Bush for this disaster, along with all the others that he has had happen on his watch. The Conservative fools in power are not Republicans, and they are destroying the party of Abraham Lincoln, Teddy Roosevelt and Dwight Eisenhower, while at the same time working hard to destroy the Democratic Party of Thomas Jefferson and John Kennedy. These destroyers are constantly telling people that the market will provide for people and the charities that people depend on, and that the rich people will step forward and make the donations that are necessary. This is a flat out lie, and they know it is a lie, and they do not care.
I am spending every waking moment, every dime I have and every breath in my body trying to rid this country of these people and their ideology.
---
One last thought on this. I do believe the market will provide for the needs of our charities and our people. It will be able to do that when we have taken it back from the people who have stolen it from us.
Thursday, March 02, 2006
Donation Certificates
Problem: Our 501(c)3 organizations, especially progressives ones, are constantly lacking in operating funds, and are constantly begging for money to keep afloat and fund their initiatives.
Problem: Our national savings rate is the lowest it has been since the Great Depression. People are pulling money out of their equity, taking out unsecured loans, living on credit cards and not preparing for the future. At the same time, Social Security is under attack by people who want to shut the entire system down by privatizing it. SSI should not be the only resource that people count on to pay for retirement at any time, and especially when the conservatives are trying to destroy it.
Problem: The American People no longer own our own country. From the ports being sold to Dubai to the massive list of companies on economyincrisis.org, we are watching the ownership of our infrastructure being transfered to private corporations that are unaccountable to the people.
Solution to all three of these problems:
I want to create an investment method where people put money into a savings program by buying bonds or what I call "Donation Certificates". The money would go into an account that earns interest in a local bank, and each person that buys a certificate increases the money in that account. Each month when the bank pays the interest on that account, the returned interest is split in half, with half going back into the account and the other half going to the charity. The more people that buy the certificates, the more money we will have to earn interest on.
Now, I call these bonds because they are redeemable. If someone purchases a $100 certificate, they would be able to come back after 5 or 10 years and cash it in. The value of the certificate would increase based on half the interest rate the account earns. It wouldn't be as much as if they had put the money into an account by themselves without making any donations with it, but with so many organizations to donate to, it would be good for people to know that their money is going to help provide for the charities they care about.
I need help looking at the numbers and figureing out how to create this kind of funding stream. I'm thinking a 501(c)3, but the accounts would be making a profit, selling certificates, etc. So a for-profit company might be a better choice. But I don't know enough about the law to know how to do this.
If you know anyone who might be able to help me create this, please let me know. I want to turn charity fundraising on its head with a brand new idea that encourages people to save and puts people into the mindset that they are owners of the future of their society.
Chad Lupkes
chadlupkes@gmail.com
Problem: Our national savings rate is the lowest it has been since the Great Depression. People are pulling money out of their equity, taking out unsecured loans, living on credit cards and not preparing for the future. At the same time, Social Security is under attack by people who want to shut the entire system down by privatizing it. SSI should not be the only resource that people count on to pay for retirement at any time, and especially when the conservatives are trying to destroy it.
Problem: The American People no longer own our own country. From the ports being sold to Dubai to the massive list of companies on economyincrisis.org, we are watching the ownership of our infrastructure being transfered to private corporations that are unaccountable to the people.
Solution to all three of these problems:
I want to create an investment method where people put money into a savings program by buying bonds or what I call "Donation Certificates". The money would go into an account that earns interest in a local bank, and each person that buys a certificate increases the money in that account. Each month when the bank pays the interest on that account, the returned interest is split in half, with half going back into the account and the other half going to the charity. The more people that buy the certificates, the more money we will have to earn interest on.
Now, I call these bonds because they are redeemable. If someone purchases a $100 certificate, they would be able to come back after 5 or 10 years and cash it in. The value of the certificate would increase based on half the interest rate the account earns. It wouldn't be as much as if they had put the money into an account by themselves without making any donations with it, but with so many organizations to donate to, it would be good for people to know that their money is going to help provide for the charities they care about.
I need help looking at the numbers and figureing out how to create this kind of funding stream. I'm thinking a 501(c)3, but the accounts would be making a profit, selling certificates, etc. So a for-profit company might be a better choice. But I don't know enough about the law to know how to do this.
If you know anyone who might be able to help me create this, please let me know. I want to turn charity fundraising on its head with a brand new idea that encourages people to save and puts people into the mindset that they are owners of the future of their society.
Chad Lupkes
chadlupkes@gmail.com
Wednesday, March 01, 2006
Copyrights are giving me a headache
This is something I just posted on Wikipedia, and I wanted to post it here as well:
I thought the fundamental purpose of a copyright was to prevent other individuals from making a profit on content that I create. If I want to copy something from a website to Wikipedia, like information about the CEO's and Board of Directors of publically owned corporations, I'm not making any money on it, Wikipedia is not making any money on it, and the company I'm getting the information from is not losing any money from it. If people don't want any information about you on the web, don't become a member of the board of directors of a public company, or a politician, or an artist, or whatever. And to relate this to Google, if their indexer can find information and not get in trouble for copying it into their search results, why would Wikipedia get in trouble for grabbing the information and creating links to it and from it to other articles on the site? We're putting up walls and protections to protect things that have no financial value, but have tremendous civil and social value if they are shared information. What's the point?!
I thought the fundamental purpose of a copyright was to prevent other individuals from making a profit on content that I create. If I want to copy something from a website to Wikipedia, like information about the CEO's and Board of Directors of publically owned corporations, I'm not making any money on it, Wikipedia is not making any money on it, and the company I'm getting the information from is not losing any money from it. If people don't want any information about you on the web, don't become a member of the board of directors of a public company, or a politician, or an artist, or whatever. And to relate this to Google, if their indexer can find information and not get in trouble for copying it into their search results, why would Wikipedia get in trouble for grabbing the information and creating links to it and from it to other articles on the site? We're putting up walls and protections to protect things that have no financial value, but have tremendous civil and social value if they are shared information. What's the point?!
Thursday, February 09, 2006
Social Security: The Poison Pill
President Bush's 2007 budget proposal includes funding for a Social Security privatization plan.
"His plan would let people set up private accounts starting in 2010 and would divert more than $700 billion of Social Security tax revenues to pay for them over the first seven years. ... Unlike Bush's generalized privatization talk of last year, we're now talking detailed numbers. On page 321 of the budget proposal, you see the privatization costs: $24.182 billion in fiscal 2010, $57.429 billion in fiscal 2011 and another $630.533 billion for the five years after that, for a seven-year total of $712.144 billion." - Newsweek
http://www.msnbc.msn.com/id/11235990/site/newsweek/
Something else I found interesting:
"Bush also wants to change the way Social Security benefits are calculated for most people by adopting so-called progressive indexing. Lower-income people would continue to have their Social Security benefits tied to wages, but the benefits paid to higher-paid people would be tied to inflation.
"Wages have typically risen 1.1 percent a year more than inflation, so over time, that disparity would give lower-paid and higher-paid people essentially the same benefit. However, higher-paid workers would be paying substantially more into the system than lower-paid people would."
What this doesn't say is that wages are something that can be kept under control by the corporate libertarians, while inflation is out of their control. And the minimum wage is something the Conservatives want to eliminate so they can pay people even lower wages. And don't forget that the coming financial situation thanks to $8 Trillion in deficits will raise inflation, thereby giving higher-paid people a steady increase in benefits while leaving our grandparents and the poor out on the street. Maybe a better plan would be to tie lower-wage benefits to the cost of living, while tying higher-wage benefits to the minimum wage. That would be an incentive for future administrations to raise the minimum wage.
The Conservatives want that $712 Billion for Wall Street. And this plan in the budget bill is their poison pill for the American people. So it's time to introduce our own poison pill.
I'm making a pledge right now that every dollar that I can spare will be going towards private investment into stocks that pay a high dividend, like Haliburton and GM. Half of those dividend checks that I get back will be going to progressive think tanks like the Center for American Progress or the Institute for Washington's Future. The other half of those dividends will be reinvested back into the stocks it came from, giving me a growing collection of stocks. This is basically what they've been doing for 30+ years in support of the Heritage Foundation and 80 other thinktanks that push their schemes to destroy this country.
So, for example, if I invest in WalMart stock, half of the dividend will go to Wake Up Walmart. If I purchase GM or Ford, half will be going to the United Auto Workers. If I buy ExxonMobil, half will be going to the Sierra Club or Greenpeace. If I buy News Corp, half of the dividend will be going to Media Matters for America.
That's my poison pill that I'm shoving down the throat of the corporate libertarians. The more money they are able to steal from public money to go into private hands, the bigger the stock dividends will be, and the more money I'll be able to make available to build a strong progressive infrastructure. And I invite everyone who can afford $10 per month to join me.
It's time to fight back, with every tool at our disposal. They have designed the global financial system to make them money. It's time we took some of that money back and put it towards a positive future.
"His plan would let people set up private accounts starting in 2010 and would divert more than $700 billion of Social Security tax revenues to pay for them over the first seven years. ... Unlike Bush's generalized privatization talk of last year, we're now talking detailed numbers. On page 321 of the budget proposal, you see the privatization costs: $24.182 billion in fiscal 2010, $57.429 billion in fiscal 2011 and another $630.533 billion for the five years after that, for a seven-year total of $712.144 billion." - Newsweek
http://www.msnbc.msn.com/id/11235990/site/newsweek/
Something else I found interesting:
"Bush also wants to change the way Social Security benefits are calculated for most people by adopting so-called progressive indexing. Lower-income people would continue to have their Social Security benefits tied to wages, but the benefits paid to higher-paid people would be tied to inflation.
"Wages have typically risen 1.1 percent a year more than inflation, so over time, that disparity would give lower-paid and higher-paid people essentially the same benefit. However, higher-paid workers would be paying substantially more into the system than lower-paid people would."
What this doesn't say is that wages are something that can be kept under control by the corporate libertarians, while inflation is out of their control. And the minimum wage is something the Conservatives want to eliminate so they can pay people even lower wages. And don't forget that the coming financial situation thanks to $8 Trillion in deficits will raise inflation, thereby giving higher-paid people a steady increase in benefits while leaving our grandparents and the poor out on the street. Maybe a better plan would be to tie lower-wage benefits to the cost of living, while tying higher-wage benefits to the minimum wage. That would be an incentive for future administrations to raise the minimum wage.
The Conservatives want that $712 Billion for Wall Street. And this plan in the budget bill is their poison pill for the American people. So it's time to introduce our own poison pill.
I'm making a pledge right now that every dollar that I can spare will be going towards private investment into stocks that pay a high dividend, like Haliburton and GM. Half of those dividend checks that I get back will be going to progressive think tanks like the Center for American Progress or the Institute for Washington's Future. The other half of those dividends will be reinvested back into the stocks it came from, giving me a growing collection of stocks. This is basically what they've been doing for 30+ years in support of the Heritage Foundation and 80 other thinktanks that push their schemes to destroy this country.
So, for example, if I invest in WalMart stock, half of the dividend will go to Wake Up Walmart. If I purchase GM or Ford, half will be going to the United Auto Workers. If I buy ExxonMobil, half will be going to the Sierra Club or Greenpeace. If I buy News Corp, half of the dividend will be going to Media Matters for America.
That's my poison pill that I'm shoving down the throat of the corporate libertarians. The more money they are able to steal from public money to go into private hands, the bigger the stock dividends will be, and the more money I'll be able to make available to build a strong progressive infrastructure. And I invite everyone who can afford $10 per month to join me.
It's time to fight back, with every tool at our disposal. They have designed the global financial system to make them money. It's time we took some of that money back and put it towards a positive future.
Sunday, January 15, 2006
How to vote Blue on Walt Disney Stocks
Hi everyone,
It's been a while since I posted a recommendation, but I just finished voting my Disney shares. You can read my recommendations on Democracy for Wall Street.
I'm hearing that Corporations want to know who their shareholders are so they can head shareholder resolutions off before they really get started. Well, everyone in Washington State knows who I am, so if they have any questions, they can call me.
Chad
It's been a while since I posted a recommendation, but I just finished voting my Disney shares. You can read my recommendations on Democracy for Wall Street.
I'm hearing that Corporations want to know who their shareholders are so they can head shareholder resolutions off before they really get started. Well, everyone in Washington State knows who I am, so if they have any questions, they can call me.
Chad
Tuesday, January 03, 2006
NY Times Article of note
December 9, 2005
Do Companies Need a Little Democracy?
By FLOYD NORRIS
FOUR years after Enron's bankruptcy shocked investors - and revealed that there was almost nothing there once the lies were stripped away - reforms have changed many things in corporate America.
Corporate directors are newly empowered, and in many cases a lot better paid than they were in the old days. Auditors are more closely regulated, but in ways that have improved their income significantly. Wall Street's way of doing stock research has been turned around. Corporate officials must now personally certify their companies' financial results and the quality of the internal controls that assure accuracy. Mutual funds, with more independent directors, may seek to avoid paying too much to the managers who run and market the funds.
But one change that seemed likely - an increase in shareholder power - has not been realized.
Shareholders legally own companies, but in practice they have little influence. Elections of directors are seldom contested. The ballots companies send out allow shareholders to withhold votes from directors, but do not provide alternatives. If 99 percent of shareholders vote against a director, but he votes for himself, he will win.
It is possible to mount a proxy battle but that involves a lot of expense, because someone running against the incumbents cannot even get on their ballot. Insurgents must send out their own ballots, as well as campaign literature, and pay for it. Few even try.
William H. Donaldson, when he was chairman of the Securities and Exchange Commission, promised to change that. The rule the S.E.C. proposed was a mild one: it would have allowed institutional investors in some cases to put forth, on the company's ballot, a so-called short slate of directors that, if successful, would control only a minority of seats on the board. But even that infuriated corporate America, and after intense lobbying Mr. Donaldson did not pursue the plan. There is no indication that his successor, Christopher Cox, plans action in that area.
Some doubt the wisdom of shareholder power. Iman Anabtawi, an acting professor of law at U.C.L.A., argues that differing groups of shareholders can have divergent and conflicting interests, and that board power is needed to mediate. Her point is reinforced by efforts of hedge fund managers to influence companies in ways aimed more at short-term stock performance than long-term value creation.
But defenders of the status quo should ask whether any additional limits on the power of self-perpetuating boards are needed.
If so, they might be wise to act now, rather than after abuses create another stampede for change.
An interesting suggestion comes from Leo E. Strine Jr., a Delaware vice chancellor and as such a judge who can decide the outcome of corporate battles. In a coming issue of The Harvard Law Review, he sets forth a proposal, which he is careful not to endorse, that could thread a middle line between reformers and traditionalists.
It suggests changes in state laws to allow contested elections of director - outside of the takeover context - every three years. If insurgents, who could appear on the ballots sent out by management, received 35 percent of the votes, they could get some of their expenses reimbursed. And, of course, they might win.
In return for getting real authority, shareholders would no longer be able to propose nonbinding resolutions that now appear at annual meetings every year.
The risk now is that reforms have freed boards from domination by chief executives without creating any other controls, other than the courts, over directors. A limited dose of democracy might help to ensure we are not entering the era of the imperial board of directors.
Do Companies Need a Little Democracy?
By FLOYD NORRIS
FOUR years after Enron's bankruptcy shocked investors - and revealed that there was almost nothing there once the lies were stripped away - reforms have changed many things in corporate America.
Corporate directors are newly empowered, and in many cases a lot better paid than they were in the old days. Auditors are more closely regulated, but in ways that have improved their income significantly. Wall Street's way of doing stock research has been turned around. Corporate officials must now personally certify their companies' financial results and the quality of the internal controls that assure accuracy. Mutual funds, with more independent directors, may seek to avoid paying too much to the managers who run and market the funds.
But one change that seemed likely - an increase in shareholder power - has not been realized.
Shareholders legally own companies, but in practice they have little influence. Elections of directors are seldom contested. The ballots companies send out allow shareholders to withhold votes from directors, but do not provide alternatives. If 99 percent of shareholders vote against a director, but he votes for himself, he will win.
It is possible to mount a proxy battle but that involves a lot of expense, because someone running against the incumbents cannot even get on their ballot. Insurgents must send out their own ballots, as well as campaign literature, and pay for it. Few even try.
William H. Donaldson, when he was chairman of the Securities and Exchange Commission, promised to change that. The rule the S.E.C. proposed was a mild one: it would have allowed institutional investors in some cases to put forth, on the company's ballot, a so-called short slate of directors that, if successful, would control only a minority of seats on the board. But even that infuriated corporate America, and after intense lobbying Mr. Donaldson did not pursue the plan. There is no indication that his successor, Christopher Cox, plans action in that area.
Some doubt the wisdom of shareholder power. Iman Anabtawi, an acting professor of law at U.C.L.A., argues that differing groups of shareholders can have divergent and conflicting interests, and that board power is needed to mediate. Her point is reinforced by efforts of hedge fund managers to influence companies in ways aimed more at short-term stock performance than long-term value creation.
But defenders of the status quo should ask whether any additional limits on the power of self-perpetuating boards are needed.
If so, they might be wise to act now, rather than after abuses create another stampede for change.
An interesting suggestion comes from Leo E. Strine Jr., a Delaware vice chancellor and as such a judge who can decide the outcome of corporate battles. In a coming issue of The Harvard Law Review, he sets forth a proposal, which he is careful not to endorse, that could thread a middle line between reformers and traditionalists.
It suggests changes in state laws to allow contested elections of director - outside of the takeover context - every three years. If insurgents, who could appear on the ballots sent out by management, received 35 percent of the votes, they could get some of their expenses reimbursed. And, of course, they might win.
In return for getting real authority, shareholders would no longer be able to propose nonbinding resolutions that now appear at annual meetings every year.
The risk now is that reforms have freed boards from domination by chief executives without creating any other controls, other than the courts, over directors. A limited dose of democracy might help to ensure we are not entering the era of the imperial board of directors.
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