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.
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.
"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.
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.
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...
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.
"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.