May I be pardoned for a momentary lapse into shameless self-promotion? Since I retired in 2011 I've been laboring in a long-deferred vocation. Now that Philip Roth has passed to his reward America needs a new practitioner of imaginative literature and so yesterday I (self-) published "A Cold Day in August," my first short story collection, on Amazon:
Thank you for your indulgence of this obscene profit timeout, as the late Rush Limbaugh of blessed memory characterized the commercials that punctuated his show.
I spent the past 2 1/2 hours reading your book cover to cover. It’s excellent; a real treat to read.
It also hit home to me because your fictionalized town of Union, MA is highly reminiscent of Worcester, an old mill town where I spent 4 years in the 1970s. Townies used to affectionately refer to Worcester as the armpit of Massachusetts.
While living there I had a variety of odd jobs; I worked a stamping machine cutting leather soles for a company that made bedroom slippers. I worked at Wyman Gordon, a tool and dye called company that made parts for the automotive industry and I worked a cash register at a precursor to Home Depot called Spags (located in Shrewsbury). Sadly, all those companies are gone. The shoe and leather industry left Massachusetts decades ago and Wyman Gordon moved to Houston. Spags didn’t survive the advent of Home Depot and Lowe’s.
What makes your stories particularly compelling is that the town of Union becomes as much of a character as the human characters you invent. Few of your human characters are likable, but despite being downtrodden, Union is likable in an odd sort of way.
Your book also put me in mind of the recent HBO series, “Mare of Easttown.” If you haven’t seen it, you might like it.
Again, congratulations on producing such a fine work of fiction. And my apologies to Clare Berlinski and Adam Garfinkle for going off topic.
I greatly appreciate your kind comments, and I’m gratified that you enjoyed the book. I know Worcester, incidentally. For some years I worked in Framingham and during that time I dated a girl who lived in Worcester. I suppose there are quite a few Massachusetts towns and cities that resemble Union. It’s queer to reflect that the world so vividly present in my memory and yours has passed away.
This is lovely! I'm so glad Thomas found such a good reader through our comment section. I began reading the book, found myself pulled in by the opening, and forced myself to stop reading because I have so much work I need to do. I'm saving it as a reward for clearing out my In Box. This review makes it even more tempting.
Those words have had the meaning wrung out of them. For example, when you provide some po-mo progressive with a definition of socialism that honors the historical context, you receive a smug lecture that socialism means pretty much whatever it needs to mean, such as student loan forgiveness, Medicare for All, the Green New Deal—and Denmark! Explaining that no, Denmark does not have a socialist economy, that it has a market economy supporting a comprehensive welfare state, is a waste of breath.
It's much the same with that other hardy perennial, fascism. People who've never even read the Classics Illustrated version of "The Rise and Fall of the Third Reich" think they know all about it.
Now, having said that, I was just having a bit of a "discussion" with a friend of mine who is a real Trumpster. He was telling me that a local ordinance requiring landlords to give 90 days notice to tenants before booting them out is socialist. He says that socialist is any time the government "limits what you can do with your own property." My point here being that we on the right tend to use the words incorrectly as well. Especially the S and the C words.
Basically, here are the definitions when used by someone "of the left":
Socialism: The government doing things I like. You know, schools, and police...wait scratch police we don't like them anymore even though we routinely use them as an example of something that will be lost of the conservatives have their way.
Fascism: The government doing things I don't like. Such as the police (see previous definition).
Capitalism: Rich people using the government to oppress black people.
That's it, more or less. Strictly speaking, words like "fascism," "socialism," "capitalism," "racism," etc., etc. have become part of the B Vocabulary of Newspeak, defined by Mr. Orwell as words that have "had their meanings extended until they contained within themselves whole batteries of words which, as they were sufficiently covered by a single comprehensive term, could now be scrapped and forgotten." This is just what happens when Wokesters use the words "fascism" or "racism" or "democracy." The first two words could be referring to almost anything of which they disapprove, from revealed religion to the Electoral College; the latter word covers all that the Woke embrace, from student loan forgiveness to masking mandates.
You're right about the people who exhibit these behaviors. Is there some percentage of the country that you think is unreachable? Is the greater proportion just people who haven't thought these ideas carefully through?
In my not-inconsiderable experience, few people take the time to think through the ideas—or more accurately the notions—that they embrace. For instance, there are millions of people who would agree with the statement, "Healthcare is a human right," but have never paused to consider how that could possibly work out in practical terms. The few people who do think it through come to the inevitable conclusion that this "human right" would actually be a defined benefit: including some things, excluding others and subject to change based on availability. But just try arguing that point with someone who unthinkingly embraces the proposition that healthcare is a human right. They just don't get it and moreover, they become indignant when the realities are explained to them.
The dysfunction that afflicts politics in these degenerate time is in large part attributable to the syndrome described above.
Something I have noticed just in the past few days that you are starting to see Twitter socialists increasingly praise price controls something I know is anathema to Claire. I bring this up as while I do think a lot of people who praise socialism have no idea what it is there is a certain hardcore that actually does know what it is and strongly supports is worst aspects.
**I have been following the recent energy price shock in Europe(that is now spreading to the US too) and have started to notice at least some socialists/renewable energy advocated now calling for price controls on energy.
It always has been. It has never been otherwise. I noticed this when I was probably about 15 or 16. I thought to myself: "Why do people always seem to have it in there mind that there are two choices and they have to pick one? Ford v Chevy. Coke v. Pepsi. Republican v. Democrat. Now I'm not classically trained like the rest of you, so I can't recite chapter and verse from some long dead philosopher saying "Well, Beejeeber said in his third volume...", so all I had to go on was what I thought. And the thought occurred to me back then: we are binary in our thinking because we are from birth naturally separated in to two groups: men and women. I thought "What if there were three sexes. A, B, and C? How would that work for one, but how would that affect our thinking?" Would we be trinary in our thinking? Coke v. Pepsi v. RC Cola? Or would we be broken free of it altogether? But as I got older I realized too that we have always been tribal. Us versus them. I just think we have always been this way. Whatever the reasons why.
Well, in most cases consumers aren’t really faced with a binary choice. Coke v. Pepsi? What about Mountain Dew and Doctor Pepper? And on the political side, is there really a “third way” between a market economy and a socialized economy? Where’s the evidence for that? There is such a thing as binary choice, after all. And nuance is sometimes the nemesis of clarity.
Alas, no. You can perhaps have a comprehensive welfare state, but it can only be paid for by a market economy. So-called mixed economies combining capitalistic and socialist features are, to be rudely frank, delusional. In no way could such a power-sharing arrangement remain stable. Bureaucrats and entrepreneurs are natural antagonists. Is that not obvious?
I feel like we can do better. The two dimensional political spectrum chart (X-axis conservative / liberal, Y-axis: authoritarian / anarchic) is far from perfect, but to me it was eye-opening in regards to finding that flaw in thinking. I've seen others realize that they've been fooled into imagining the political world as black and white. There are forces in the world who I suspect are consciously reinforcing that narrative. Are there people who are willing to push back to make a dent in it?
The real answer is people need to a: want to learn and b: be willing to hear things that contradict what they believe. Most of us fail on both counts. As I've said many times: we are the problem. Not they.
Maybe we can do better. Are there forces who push the us v them? Yeah: every politician. Well most, anyway. And the media. And if I'm honest: a lot of school teachers. Having now had high schoolers at home for a second year starting last week and also being home and hearing what is said to these kids...I'm stunned. At one point I had to go upstairs and tell me kid: "Everything that guy is telling you is bullsh**!" Ok, that's a rabbit trail.
There has been a bit of a fight that broke out on my Twitter feed between some of the CG's and myself over my views about Occupy Wall Street, Warren/Sanders/AOC, Thomas Piketty, and Piketty's protege Gabriel Zucman who is a senior advisor to both Warren and Sanders so I wanted to try to explain my views and background on this issue. First in full disclosure to the extent I could be said to have had a side job in politics over the last five years it has been to seek out and destroy both Thomas Piketty and his sidekick Gabriel Zucman. Perhaps I should put in a nicer term akin to what Jonathan V Last of the Bulwark says about his enemies, I want to load them into a Falcon Heavy rocket and blast them to the sun.
I think it can be taken for granted that a presidential executive order from an administration in which disorganized economic thinking is virtually a job qualification is unlikely to “reform capitalism”—whatever that may mean. There may indeed be some small number of salutary legal and regulatory reforms that could be enacted. But that would never happen. If we’ve learned anything over the last couple of years it’s that our federal government is both power hungry and institutionally incompetent. Logically, reform should start there. Let’s just say I’m not holding my breath.
The Biden Administration’s wildly hubristic program—if its random thrashings can so be dignified—should be taken as sufficient evidence of what I say. Does anybody think that an administration led by a man who thinks that spending $5 trillion he doesn’t have and can’t get anywhere besides the Fed is how you fight inflation?
So we can take it for granted that Joe Biden’s executive order will do little more than reinforce the economic disarray that his policies will surely create.
Thomas you and WigWag are going to be absolutely shocked that on this I agree with both you and WigWag and NOT the Cosmopolitan Globalists. I will explain in another comment but I absolutely loath not just populists of the right like Trump but populists of the left like Sanders, AOC, and the Piketty-ites.
"It’s not neatly partisan, and it’s obviously not an easy call."
This is, in part, why it isn't going to get a lot of play in the press. It's difficult to manage, since it doesn't fall neatly into either camp. The pundits arguing across the field from either end zone aren't going to have an easy time distilling it into easy Biden Hate/Love. Complication requires nuance (and honesty) and that's not compatible with the propagandists that are in the late night editorial slots.
In fact I admire the manner in which the piece occupies a lot of ground throughout the middle.
Complicating matters, domestic policy is not nearly as exciting as killer storms, terrorists, or whatever "culture war" issue is up in the rotation.
Antitrust law does provide a potential vehicle for reigning in the power of our 21st century version of the Robber Barrons, but a better tool would be the elimination of dual class shares. The use of dual class voting is ubiquitous in the tech sector and very common in the media sector.
The way it works is simple; when a company issues common stock, it comes in two flavors. The first flavor is reserved for the insiders; it comes with enhanced voting rights. The second flavor is reserved for all other investors; it comes with significantly diminished voting rights compared to the insiders.
Facebook provides a perfect example. Average and institutional investors are only able to purchase “Class A” shares, where a share of common stock comes with one vote. Mark Zukerberg and his cronies control all of the “Class B” shares that come with ten votes per share. Is it any wonder that Zuckerberg is accountable to no one?
Alphabet (Google’s parent) takes it a step further. Class A shares come with one vote per share. Class B Shares, which cannot be publicly traded come with ten votes per share. These shares are owned almost entirely by Goggles founders, Sergey Brin and Larry Page. Class C shares come with no voting rights at all.
The list of tech companies which use the same nefarious technique to insure that the plebes never have a say in corporate governance is long and varied.
The same scam is run over and over again in the media sector. Comcast (which own NBC-Universal) has a dual class structure. Over the past 10 years, Brian Roberts (his father founded Comcast) has personally owned between 33 and 87 percent of Comcast’s voting stock; the shares are not available to the average investor.
The current incarnation of CBS (which resulted from the merger of Viacom and CBS) was created exclusively from the vision of Shari Redstone (Sumner’s daughter). It didn’t matter that many investors of both companies opposed the merger. Sheri Redstone controlled nearly 80 percent of the voting shares of both Viacom and CBS. But for the dual class structure of both companies, it is likely that the Street would have rejected the merger.
The New York Times is controlled by the Sulzberger Family because it too has dual class shares. Class A shares which are available to the public are entitled to elect 30 percent of the Company’s Board while the Sulzberger Family and Mexican billionaire Carlos Slim control 100 percent of the Class B shares which get to elect 70 percent of the Board.
Rupert Murdoch and family control the Wall Street Journal and Fox News using a similar strategy.
Other media companies with dual class stock that cements insider control include: Roku, Netflix, Discovery (which just bought Time Warner from AT&T), Audacy Media( formerly CBS Radio/Infinity Broadcasting), Yelp, Zillow, Liberty Media and even Martha Stewart Enterprises and the World Wrestling Federation.
There are three ways in which the entrenched power of the tech and media elites could be diminished. Congress could pass legislation outlawing dual class shares and immediately confer equal voting rights on all common stock shareholders. Alternatively the SEC could engage in a rule making procedure designed to eviscerate dual class voting power. Finally, the stock exchanges could delist companies with dual class shares. So far, NASDAQ has refused to do this. The New York Stock Exchange wont list new companies with dual class shares but has grandfathered companies already listed. Another strategy is to refuse to count companies with dual class shares in indexes like the S&P 500.
Enhanced antitrust enforcement together with curtailing the power of America’s new Robber Barron’s by eliminating dual class voting could go along way to improving the functioning of American capitalism.
Less focus on low prices in the context of antitrust enforcement is potentially inflationary. This might be dangerous at a moment in history when inflation is re-emerging and the Biden Administration is proposing plans to dramatically increase deficit spending to levels never seen before. Eliminating dual class voting nicks no one but our new feudal overlords.
Progress on this front could then be followed by reforms to two other American institutions that are destroying the middle class-higher education and healthcare. Just think how much more affordable healthcare and college would be if we could develop reforms which dramatically reduced the compensation earned by college professors and doctors.
Is anyone proposing legislation to this effect? Is there an advocate of this whose work I could read? I don't recall ever seeing an article or essay about this issue, which may mean I've been oblivious to the debate, but might also mean there's just no constituency for such a reform. Would you favor eliminating this share class retroactively, in effect torching existing private property? Or only from now on?
Good morning, Claire. The role of dual class shares and whether the practice of issuing them should be regulated is an oft-discussed topic in the business press. This is especially true in the context of whether the SEC should regulate the practice more stringently and whether there’s a role for the stock exchanges in weighing in. This certainly isn’t my idea; it becomes a hot topic every few years.
Google “dual class shares” or “dual class stock” and you will find scores of articles on the subject, many of them making the same suggestion that I have. Here are a few examples,
I do favor eliminating dual class shares both prospectively and retrospectively. I don’t think that it “torches” private property.
Insisting that every share of stock of a company that is listed on a public exchange come with exactly the same voting rights merely treats everyone equally in terms of their fractional ownership rights.
By way of example, if Mark Zuckerberg wants to control the corporate governance of Facebook, all he needs to do is own more than 50 percent of the common shares. The idea that his vote should count ten times more than my vote merely because his shares are “special” merely by virtue of being owned by him, is neither ethical or efficient. Long after Zuckerberg is dead, his shares with special voting rights will continue to be owned by his designers, potentially forever.
If a founder wants that type of control, there are two reasonable options: (1)Never sell more than 50 percent of your company to the public on the stock exchanges or (2)Don’t sell an ownership stake to the public at all.
Jeff Bezos controls Amazon without dual class shares because he owns the majority of the stock. Michael Bloomberg owns Bloomberg LP outright. He never sold shares in the company and thus it is not traded on any public exchange. When Bloomberg needed to raise money to build his company, he borrowed it and subsequently repaid it.
NBC-Universal and CBS are both owned by parents (Comcast and National Entertainment) where the founders maintain control with dual class shares. Disney owns ABC, the old fashioned way; every share of common stock comes with one vote. If it was good enough for Walt Disney and for Bezos and Bloomberg, it should be good enough for Zuckerberg, Page, Brin, Roberts, Sulzberger, Redstone and Murdoch.
Adam’s very interesting article is about ensuring capitalism is vibrant, modestly equitable and long-lasting. Giving Zuckerberg ten times the voting rights that I have, not because he owns far more shares than I do but because his shares are better than mine isn’t capitalism, it’s feudalism. He becomes lord of the manner while the rest of us are reduced to serfdom.
Selling shares to the public to raise capital and to enrich yourself is not a right, it’s a privilege. These markets are heavily regulated in all developed nations and have been since the 1930s.
Some of the antitrust approaches that Adam cites, along with the elimination (yes, retroactively) of dual class shares would make capitalism more healthy not less.
I’m no Christian—I’m a Catholic!
May I be pardoned for a momentary lapse into shameless self-promotion? Since I retired in 2011 I've been laboring in a long-deferred vocation. Now that Philip Roth has passed to his reward America needs a new practitioner of imaginative literature and so yesterday I (self-) published "A Cold Day in August," my first short story collection, on Amazon:
https://www.amazon.com/Cold-Day-August-Thirteen-Criminality-ebook/dp/B09FQCRGC5/ref=sr_1_1?dchild=1&keywords=A+Cold+Day+in+August&qid=1631193757&sr=8-1
Thank you for your indulgence of this obscene profit timeout, as the late Rush Limbaugh of blessed memory characterized the commercials that punctuated his show.
I spent the past 2 1/2 hours reading your book cover to cover. It’s excellent; a real treat to read.
It also hit home to me because your fictionalized town of Union, MA is highly reminiscent of Worcester, an old mill town where I spent 4 years in the 1970s. Townies used to affectionately refer to Worcester as the armpit of Massachusetts.
While living there I had a variety of odd jobs; I worked a stamping machine cutting leather soles for a company that made bedroom slippers. I worked at Wyman Gordon, a tool and dye called company that made parts for the automotive industry and I worked a cash register at a precursor to Home Depot called Spags (located in Shrewsbury). Sadly, all those companies are gone. The shoe and leather industry left Massachusetts decades ago and Wyman Gordon moved to Houston. Spags didn’t survive the advent of Home Depot and Lowe’s.
What makes your stories particularly compelling is that the town of Union becomes as much of a character as the human characters you invent. Few of your human characters are likable, but despite being downtrodden, Union is likable in an odd sort of way.
Your book also put me in mind of the recent HBO series, “Mare of Easttown.” If you haven’t seen it, you might like it.
Again, congratulations on producing such a fine work of fiction. And my apologies to Clare Berlinski and Adam Garfinkle for going off topic.
I greatly appreciate your kind comments, and I’m gratified that you enjoyed the book. I know Worcester, incidentally. For some years I worked in Framingham and during that time I dated a girl who lived in Worcester. I suppose there are quite a few Massachusetts towns and cities that resemble Union. It’s queer to reflect that the world so vividly present in my memory and yours has passed away.
This is lovely! I'm so glad Thomas found such a good reader through our comment section. I began reading the book, found myself pulled in by the opening, and forced myself to stop reading because I have so much work I need to do. I'm saving it as a reward for clearing out my In Box. This review makes it even more tempting.
Looking forward to reading it. Congratulations!
We should have a constitutional amendment limiting executive directives to a word and page count. And ixnay on the wishing for more wishes.
"Large cohorts of these voters tell pollsters they prefer “socialism” to “capitalism,” even if it’s unclear what they believe these words mean."
Finally, someone points out the latter part...
Those words have had the meaning wrung out of them. For example, when you provide some po-mo progressive with a definition of socialism that honors the historical context, you receive a smug lecture that socialism means pretty much whatever it needs to mean, such as student loan forgiveness, Medicare for All, the Green New Deal—and Denmark! Explaining that no, Denmark does not have a socialist economy, that it has a market economy supporting a comprehensive welfare state, is a waste of breath.
It's much the same with that other hardy perennial, fascism. People who've never even read the Classics Illustrated version of "The Rise and Fall of the Third Reich" think they know all about it.
Now, having said that, I was just having a bit of a "discussion" with a friend of mine who is a real Trumpster. He was telling me that a local ordinance requiring landlords to give 90 days notice to tenants before booting them out is socialist. He says that socialist is any time the government "limits what you can do with your own property." My point here being that we on the right tend to use the words incorrectly as well. Especially the S and the C words.
Basically, here are the definitions when used by someone "of the left":
Socialism: The government doing things I like. You know, schools, and police...wait scratch police we don't like them anymore even though we routinely use them as an example of something that will be lost of the conservatives have their way.
Fascism: The government doing things I don't like. Such as the police (see previous definition).
Capitalism: Rich people using the government to oppress black people.
That's it, more or less. Strictly speaking, words like "fascism," "socialism," "capitalism," "racism," etc., etc. have become part of the B Vocabulary of Newspeak, defined by Mr. Orwell as words that have "had their meanings extended until they contained within themselves whole batteries of words which, as they were sufficiently covered by a single comprehensive term, could now be scrapped and forgotten." This is just what happens when Wokesters use the words "fascism" or "racism" or "democracy." The first two words could be referring to almost anything of which they disapprove, from revealed religion to the Electoral College; the latter word covers all that the Woke embrace, from student loan forgiveness to masking mandates.
You're right about the people who exhibit these behaviors. Is there some percentage of the country that you think is unreachable? Is the greater proportion just people who haven't thought these ideas carefully through?
In my not-inconsiderable experience, few people take the time to think through the ideas—or more accurately the notions—that they embrace. For instance, there are millions of people who would agree with the statement, "Healthcare is a human right," but have never paused to consider how that could possibly work out in practical terms. The few people who do think it through come to the inevitable conclusion that this "human right" would actually be a defined benefit: including some things, excluding others and subject to change based on availability. But just try arguing that point with someone who unthinkingly embraces the proposition that healthcare is a human right. They just don't get it and moreover, they become indignant when the realities are explained to them.
The dysfunction that afflicts politics in these degenerate time is in large part attributable to the syndrome described above.
Something I have noticed just in the past few days that you are starting to see Twitter socialists increasingly praise price controls something I know is anathema to Claire. I bring this up as while I do think a lot of people who praise socialism have no idea what it is there is a certain hardcore that actually does know what it is and strongly supports is worst aspects.
**I have been following the recent energy price shock in Europe(that is now spreading to the US too) and have started to notice at least some socialists/renewable energy advocated now calling for price controls on energy.
I think that argument can be had, but it depends also on our attitude bringing it forward. That's the first obstacle.
How can we start the project that explains to Americans that the Free Market v Communism is not simply an on/off switch that's labeled Good / Bad?
I'm not really sure what you are asking here.
A propensity to binary thinking seems to afflict Americans in many ways these days.
Thank you.
It always has been. It has never been otherwise. I noticed this when I was probably about 15 or 16. I thought to myself: "Why do people always seem to have it in there mind that there are two choices and they have to pick one? Ford v Chevy. Coke v. Pepsi. Republican v. Democrat. Now I'm not classically trained like the rest of you, so I can't recite chapter and verse from some long dead philosopher saying "Well, Beejeeber said in his third volume...", so all I had to go on was what I thought. And the thought occurred to me back then: we are binary in our thinking because we are from birth naturally separated in to two groups: men and women. I thought "What if there were three sexes. A, B, and C? How would that work for one, but how would that affect our thinking?" Would we be trinary in our thinking? Coke v. Pepsi v. RC Cola? Or would we be broken free of it altogether? But as I got older I realized too that we have always been tribal. Us versus them. I just think we have always been this way. Whatever the reasons why.
Well, in most cases consumers aren’t really faced with a binary choice. Coke v. Pepsi? What about Mountain Dew and Doctor Pepper? And on the political side, is there really a “third way” between a market economy and a socialized economy? Where’s the evidence for that? There is such a thing as binary choice, after all. And nuance is sometimes the nemesis of clarity.
"And on the political side, is there really a “third way” between a market economy and a socialized economy?"
YES.
Alas, no. You can perhaps have a comprehensive welfare state, but it can only be paid for by a market economy. So-called mixed economies combining capitalistic and socialist features are, to be rudely frank, delusional. In no way could such a power-sharing arrangement remain stable. Bureaucrats and entrepreneurs are natural antagonists. Is that not obvious?
I feel like we can do better. The two dimensional political spectrum chart (X-axis conservative / liberal, Y-axis: authoritarian / anarchic) is far from perfect, but to me it was eye-opening in regards to finding that flaw in thinking. I've seen others realize that they've been fooled into imagining the political world as black and white. There are forces in the world who I suspect are consciously reinforcing that narrative. Are there people who are willing to push back to make a dent in it?
The real answer is people need to a: want to learn and b: be willing to hear things that contradict what they believe. Most of us fail on both counts. As I've said many times: we are the problem. Not they.
Maybe we can do better. Are there forces who push the us v them? Yeah: every politician. Well most, anyway. And the media. And if I'm honest: a lot of school teachers. Having now had high schoolers at home for a second year starting last week and also being home and hearing what is said to these kids...I'm stunned. At one point I had to go upstairs and tell me kid: "Everything that guy is telling you is bullsh**!" Ok, that's a rabbit trail.
There has been a bit of a fight that broke out on my Twitter feed between some of the CG's and myself over my views about Occupy Wall Street, Warren/Sanders/AOC, Thomas Piketty, and Piketty's protege Gabriel Zucman who is a senior advisor to both Warren and Sanders so I wanted to try to explain my views and background on this issue. First in full disclosure to the extent I could be said to have had a side job in politics over the last five years it has been to seek out and destroy both Thomas Piketty and his sidekick Gabriel Zucman. Perhaps I should put in a nicer term akin to what Jonathan V Last of the Bulwark says about his enemies, I want to load them into a Falcon Heavy rocket and blast them to the sun.
https://twitter.com/Tpsmyth01/with_replies
To be continued with:
I think it can be taken for granted that a presidential executive order from an administration in which disorganized economic thinking is virtually a job qualification is unlikely to “reform capitalism”—whatever that may mean. There may indeed be some small number of salutary legal and regulatory reforms that could be enacted. But that would never happen. If we’ve learned anything over the last couple of years it’s that our federal government is both power hungry and institutionally incompetent. Logically, reform should start there. Let’s just say I’m not holding my breath.
The Biden Administration’s wildly hubristic program—if its random thrashings can so be dignified—should be taken as sufficient evidence of what I say. Does anybody think that an administration led by a man who thinks that spending $5 trillion he doesn’t have and can’t get anywhere besides the Fed is how you fight inflation?
So we can take it for granted that Joe Biden’s executive order will do little more than reinforce the economic disarray that his policies will surely create.
Thomas you and WigWag are going to be absolutely shocked that on this I agree with both you and WigWag and NOT the Cosmopolitan Globalists. I will explain in another comment but I absolutely loath not just populists of the right like Trump but populists of the left like Sanders, AOC, and the Piketty-ites.
"It’s not neatly partisan, and it’s obviously not an easy call."
This is, in part, why it isn't going to get a lot of play in the press. It's difficult to manage, since it doesn't fall neatly into either camp. The pundits arguing across the field from either end zone aren't going to have an easy time distilling it into easy Biden Hate/Love. Complication requires nuance (and honesty) and that's not compatible with the propagandists that are in the late night editorial slots.
In fact I admire the manner in which the piece occupies a lot of ground throughout the middle.
Complicating matters, domestic policy is not nearly as exciting as killer storms, terrorists, or whatever "culture war" issue is up in the rotation.
Antitrust law does provide a potential vehicle for reigning in the power of our 21st century version of the Robber Barrons, but a better tool would be the elimination of dual class shares. The use of dual class voting is ubiquitous in the tech sector and very common in the media sector.
The way it works is simple; when a company issues common stock, it comes in two flavors. The first flavor is reserved for the insiders; it comes with enhanced voting rights. The second flavor is reserved for all other investors; it comes with significantly diminished voting rights compared to the insiders.
Facebook provides a perfect example. Average and institutional investors are only able to purchase “Class A” shares, where a share of common stock comes with one vote. Mark Zukerberg and his cronies control all of the “Class B” shares that come with ten votes per share. Is it any wonder that Zuckerberg is accountable to no one?
Alphabet (Google’s parent) takes it a step further. Class A shares come with one vote per share. Class B Shares, which cannot be publicly traded come with ten votes per share. These shares are owned almost entirely by Goggles founders, Sergey Brin and Larry Page. Class C shares come with no voting rights at all.
The list of tech companies which use the same nefarious technique to insure that the plebes never have a say in corporate governance is long and varied.
The same scam is run over and over again in the media sector. Comcast (which own NBC-Universal) has a dual class structure. Over the past 10 years, Brian Roberts (his father founded Comcast) has personally owned between 33 and 87 percent of Comcast’s voting stock; the shares are not available to the average investor.
The current incarnation of CBS (which resulted from the merger of Viacom and CBS) was created exclusively from the vision of Shari Redstone (Sumner’s daughter). It didn’t matter that many investors of both companies opposed the merger. Sheri Redstone controlled nearly 80 percent of the voting shares of both Viacom and CBS. But for the dual class structure of both companies, it is likely that the Street would have rejected the merger.
The New York Times is controlled by the Sulzberger Family because it too has dual class shares. Class A shares which are available to the public are entitled to elect 30 percent of the Company’s Board while the Sulzberger Family and Mexican billionaire Carlos Slim control 100 percent of the Class B shares which get to elect 70 percent of the Board.
Rupert Murdoch and family control the Wall Street Journal and Fox News using a similar strategy.
Other media companies with dual class stock that cements insider control include: Roku, Netflix, Discovery (which just bought Time Warner from AT&T), Audacy Media( formerly CBS Radio/Infinity Broadcasting), Yelp, Zillow, Liberty Media and even Martha Stewart Enterprises and the World Wrestling Federation.
There are three ways in which the entrenched power of the tech and media elites could be diminished. Congress could pass legislation outlawing dual class shares and immediately confer equal voting rights on all common stock shareholders. Alternatively the SEC could engage in a rule making procedure designed to eviscerate dual class voting power. Finally, the stock exchanges could delist companies with dual class shares. So far, NASDAQ has refused to do this. The New York Stock Exchange wont list new companies with dual class shares but has grandfathered companies already listed. Another strategy is to refuse to count companies with dual class shares in indexes like the S&P 500.
Enhanced antitrust enforcement together with curtailing the power of America’s new Robber Barron’s by eliminating dual class voting could go along way to improving the functioning of American capitalism.
Less focus on low prices in the context of antitrust enforcement is potentially inflationary. This might be dangerous at a moment in history when inflation is re-emerging and the Biden Administration is proposing plans to dramatically increase deficit spending to levels never seen before. Eliminating dual class voting nicks no one but our new feudal overlords.
Progress on this front could then be followed by reforms to two other American institutions that are destroying the middle class-higher education and healthcare. Just think how much more affordable healthcare and college would be if we could develop reforms which dramatically reduced the compensation earned by college professors and doctors.
Is anyone proposing legislation to this effect? Is there an advocate of this whose work I could read? I don't recall ever seeing an article or essay about this issue, which may mean I've been oblivious to the debate, but might also mean there's just no constituency for such a reform. Would you favor eliminating this share class retroactively, in effect torching existing private property? Or only from now on?
Good morning, Claire. The role of dual class shares and whether the practice of issuing them should be regulated is an oft-discussed topic in the business press. This is especially true in the context of whether the SEC should regulate the practice more stringently and whether there’s a role for the stock exchanges in weighing in. This certainly isn’t my idea; it becomes a hot topic every few years.
Google “dual class shares” or “dual class stock” and you will find scores of articles on the subject, many of them making the same suggestion that I have. Here are a few examples,
https://www.sec.gov/news/speech/fleming-dual-class-shares-recipe-disaster
https://www.google.com/amp/s/www.wsj.com/amp/articles/big-investor-group-to-push-for-end-to-dual-class-shares-1485817380
https://www.google.com/amp/s/www.wsj.com/amp/articles/blackrock-and-calpers-to-stock-exchanges-clamp-down-on-dual-class-shares-1540394503
I do favor eliminating dual class shares both prospectively and retrospectively. I don’t think that it “torches” private property.
Insisting that every share of stock of a company that is listed on a public exchange come with exactly the same voting rights merely treats everyone equally in terms of their fractional ownership rights.
By way of example, if Mark Zuckerberg wants to control the corporate governance of Facebook, all he needs to do is own more than 50 percent of the common shares. The idea that his vote should count ten times more than my vote merely because his shares are “special” merely by virtue of being owned by him, is neither ethical or efficient. Long after Zuckerberg is dead, his shares with special voting rights will continue to be owned by his designers, potentially forever.
If a founder wants that type of control, there are two reasonable options: (1)Never sell more than 50 percent of your company to the public on the stock exchanges or (2)Don’t sell an ownership stake to the public at all.
Jeff Bezos controls Amazon without dual class shares because he owns the majority of the stock. Michael Bloomberg owns Bloomberg LP outright. He never sold shares in the company and thus it is not traded on any public exchange. When Bloomberg needed to raise money to build his company, he borrowed it and subsequently repaid it.
NBC-Universal and CBS are both owned by parents (Comcast and National Entertainment) where the founders maintain control with dual class shares. Disney owns ABC, the old fashioned way; every share of common stock comes with one vote. If it was good enough for Walt Disney and for Bezos and Bloomberg, it should be good enough for Zuckerberg, Page, Brin, Roberts, Sulzberger, Redstone and Murdoch.
Adam’s very interesting article is about ensuring capitalism is vibrant, modestly equitable and long-lasting. Giving Zuckerberg ten times the voting rights that I have, not because he owns far more shares than I do but because his shares are better than mine isn’t capitalism, it’s feudalism. He becomes lord of the manner while the rest of us are reduced to serfdom.
Selling shares to the public to raise capital and to enrich yourself is not a right, it’s a privilege. These markets are heavily regulated in all developed nations and have been since the 1930s.
Some of the antitrust approaches that Adam cites, along with the elimination (yes, retroactively) of dual class shares would make capitalism more healthy not less.
Thanks. I don't think that the mechanisms by which wealthy people can harm the rest of us see enough reasonable discussion like this.