Elizabeth Warren's "Accountable Capitalism Act"

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Aresen
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Re: Elizabeth Warren's "Accountable Capitalism Act"

Post by Aresen » 18 Aug 2018, 19:41

Andrew wrote:
18 Aug 2018, 19:29
Painboy wrote:
18 Aug 2018, 15:22
Shem wrote:
18 Aug 2018, 00:20
I'm not sure any company guilty of enough crimes to warrant possible dissolution can be said to be well-run. Profitable, perhaps, but well-run usually implied a certain amount of concern for legalities.
That's an incredibly subjective criteria. Would you trust someone like Trump to make that distinction?

Also any power like that given to the government is going to experience serious mission creep. Maybe the first few times they kill a company they may have plenty of justification. But before long it's not just going to be criminal issues but how the corporation "conducts" themselves or how much they pay their employees, or are they sufficiently green, or some other rightthink cause.

I'm kind of amazed that some of you don't see how disastrous this kind of policy would be. The perverse incentives that come with it would be legion.
A totally subjective power to seize companies seems to be working well in Russia. For those doing the seizing, of course.
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Re: Elizabeth Warren's "Accountable Capitalism Act"

Post by thoreau » 18 Aug 2018, 20:13

Seizing corporations is dangerous talk.

You get dangerous talk when people see systems failing and see no corrective movement in play.
"ike Wile E. Coyote salivating over a "4000 Ways To Prepare Roadrunner" cookbook without watching his surroundings, the Road Runner of Societal Inertia snuck up on them both and beepbeeped them off the mesa."
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Re: Elizabeth Warren's "Accountable Capitalism Act"

Post by Jennifer » 18 Aug 2018, 20:14

If "subjective" enforcement is the concern, perhaps writing up some "objective" standards would help. There are already standards in place for individuals who commit certain crimes -- if a rogue bank employee on his own decided to commit Wells Fargo-level fraud against certain of his customers, what penalties would he face; the process of imprisoning people for committing such frauds is (at least in theory) not "subjective" -- so it shouldn't be too difficult to draw up similar legal guidelines regarding crimes committed by corporate "persons"* rather than individual living people.

*Oblique reference to "corporate personhood"
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Re: Elizabeth Warren's "Accountable Capitalism Act"

Post by JasonL » 18 Aug 2018, 21:04

There’s a lot of giving unwarranted grace to political actors. It’s not kinda almost a good idea if we can figure it out it’s a bad idea in its bones. Business existence at the whim of regulators is bad bad bad. Write a law call it a crime to violate it prosecute individuals. Improve sanction regimes for regulatory violations in the many many many pages of regulatory shit we already have.

Do not say you have have a board that looks like x and public interest shit a, b and c or else even if you did nothing wrong ever. Dear E Warren go fuck your self and your power trip.

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Re: Elizabeth Warren's

Post by Rachel » 18 Aug 2018, 21:30

JasonL wrote:
18 Aug 2018, 21:04
There’s a lot of giving unwarranted grace to political actors. It’s not kinda almost a good idea if we can figure it out it’s a bad idea in its bones. Business existence at the whim of regulators is bad bad bad. Write a law call it a crime to violate it prosecute individuals. Improve sanction regimes for regulatory violations in the many many many pages of regulatory shit we already have.

Do not say you have have a board that looks like x and public interest shit a, b and c or else even if you did nothing wrong ever. Dear E Warren go fuck your self and your power trip.
All of this.

This is just a really terrible idea. It's irrelevant to me what "evil" things corporations have gotten away with, or how politics has been influenced by corrupt and/or rich individuals within corporations. That still doesn't make this a good idea.
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Re: Elizabeth Warren's "Accountable Capitalism Act"

Post by Aresen » 18 Aug 2018, 21:55

Fundamentally for libertarians, the issue is: Who in their right mind wants to grant government MORE power?
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Re: Elizabeth Warren's

Post by Warren » 18 Aug 2018, 22:07

Rachel wrote:
18 Aug 2018, 21:30
JasonL wrote:
18 Aug 2018, 21:04
There’s a lot of giving unwarranted grace to political actors. It’s not kinda almost a good idea if we can figure it out it’s a bad idea in its bones. Business existence at the whim of regulators is bad bad bad. Write a law call it a crime to violate it prosecute individuals. Improve sanction regimes for regulatory violations in the many many many pages of regulatory shit we already have.

Do not say you have have a board that looks like x and public interest shit a, b and c or else even if you did nothing wrong ever. Dear E Warren go fuck your self and your power trip.
All of this.

This is just a really terrible idea. It's irrelevant to me what "evil" things corporations have gotten away with, or how politics has been influenced by corrupt and/or rich individuals within corporations. That still doesn't make this a good idea.
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Re: Elizabeth Warren's

Post by Jennifer » 19 Aug 2018, 14:35

Rachel wrote:
18 Aug 2018, 21:30
That still doesn't make this a good idea.
But I have not yet see anyone argue why the current status quo -- "the company MUST survive, no matter how many crimes the company (as opposed to individual rogue employees acting on their own) has committed" -- is any improvement.
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Re: Elizabeth Warren's "Accountable Capitalism Act"

Post by thoreau » 19 Aug 2018, 14:52

So what if the status quo is better than a corporate death penalty? Who says those are or should be the only options?

Apologists win with false dichotomies.
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Re: Elizabeth Warren's

Post by Jennifer » 19 Aug 2018, 15:00

thoreau wrote:
19 Aug 2018, 14:52
So what if the status quo is better than a corporate death penalty? Who says those are or should be the only options?

Apologists win with false dichotomies.
Upthread I did speculate about possible ways to implement "corporate imprisonment" instead -- an individual who committed Wells Fargo fraud would not face the death penalty for it, but would go to prison for a not-insignificant chunk of a typical adult lifespan. So, what would/could penalize (and hopefully deter) a company as effectively as "you're losing ten [or however many] years of your life to prison" might penalize and deter an individual?

Though for things like my GM example, it gets trickier: a hypothetical individual, or non-incorporated group of individuals engaged in criminal conspiracy, might, possibly, avoid the death penalty if their conspiracy killed over 120 people, injured hundreds more and resulted in at least one innocent victim being convicted of a felony for their crimes -- but I doubt such people would ever, ever walk free again. With individual people who commit sufficiently bad crimes, there is a "life imprisonment" possibility: but there is and can't be any such equivalent for a company.
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Re: Elizabeth Warren's "Accountable Capitalism Act"

Post by JasonL » 19 Aug 2018, 16:00

The status quo isnt that the company must survive. It’s that it’s hard to enforce punishment sufficient to kill it entirely. Enron and worldcom are no more. Exxon is still around.

The general idea here is find me specific violations of specific rules and prosecuted those. Apply penalties and put criminals in jail. If you can’t do that I have to ask why, if the structure of litigation is too favorable to accused you can re regulate terms. Don’t give me this shit about oh well I guess business exists at regulator whim because I don’t like all the outcomes.

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Re: Elizabeth Warren's

Post by lunchstealer » 19 Aug 2018, 17:05

Jennifer wrote:
19 Aug 2018, 14:35
Rachel wrote:
18 Aug 2018, 21:30
That still doesn't make this a good idea.
But I have not yet see anyone argue why the current status quo -- "the company MUST survive, no matter how many crimes the company (as opposed to individual rogue employees acting on their own) has committed" -- is any improvement.
Oh yeah it's an improvement. The occasional company doing shitty things is kinda bad. The government getting semi-unchecked life-and-death over every company ever is... man that's scary. Can you imagine if Trump started just deciding what companies lived based on how loyal they were to him? Oh hey Harley Davidson... that's a real nice company you got there. Be a shame if something happened to it. By the way, wanna re-think your whole thing about moving production to Brazil to escape the trade war? (oh you're going to invest in some Trump properties? nevermind.)
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Re: Elizabeth Warren's

Post by Jennifer » 19 Aug 2018, 19:44

lunchstealer wrote:
19 Aug 2018, 17:05
Jennifer wrote:
19 Aug 2018, 14:35
Rachel wrote:
18 Aug 2018, 21:30
That still doesn't make this a good idea.
But I have not yet see anyone argue why the current status quo -- "the company MUST survive, no matter how many crimes the company (as opposed to individual rogue employees acting on their own) has committed" -- is any improvement.
Oh yeah it's an improvement. The occasional company doing shitty things is kinda bad. The government getting semi-unchecked life-and-death over every company ever is... man that's scary. Can you imagine if Trump started just deciding what companies lived based on how loyal they were to him?
But where is the assumption that this is going to be "semi-unchecked" power? Punitive power already exists against individual people -- and, while any possible crime will have some innocent people falsely accused, it is NOT true to say "Allowing the government to prosecute people for fraud would be terrible. Can you imagine if Trump started just deciding what American citizens stayed out of prison based on how loyal they were to him?" The latter is NOT how our criminal justice system works. (Trump can keep people OUT of federal prison for being loyal to him, but can't put them INTO prison for the lack of it.)
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Re: Elizabeth Warren's "Accountable Capitalism Act"

Post by JasonL » 19 Aug 2018, 23:00

You are acting like there’s not a million pages of finanable and criminal regulations already.

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Re: Elizabeth Warren's

Post by Jennifer » 19 Aug 2018, 23:59

JasonL wrote:
19 Aug 2018, 23:00
You are acting like there’s not a million pages of finanable and criminal regulations already.
Yeah, with such results as "GM was fined about one-half of one percent of its value for killing 120+ people, injuring hundreds more and letting at least one innocent victim take a felony rap." (I don't know if GM has actually paid this fine yet, or if they're trying to pull an Exxon and keep appealing it until inflation makes the actual amount even smaller. I do recall that after declaring bankruptcy, post-bankruptcy GM tried arguing that it shouldn't pay anything because all those deaths were caused by pre-bankruptcy GM, which was a totally different company. Luckily, at least a judge scothced THAT idea.)

If you can kill 120+ people and the penalty is "You must forfeit less than one percent of your net worth," I don't think it that hyperbolic to say "The law effectively lets you get away with murder." (Percentage-wise, I paid a far harsher penalty for running a yellow light back in college than GM did for killing and injuring all those people.)
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Re: Elizabeth Warren's "Accountable Capitalism Act"

Post by Aresen » 20 Aug 2018, 00:17

Corporations DO die for egregious acts: Enron and Arthur Anderson to name two. The problem is less that certain corporations ought to die than that politicians intervene to prevent them from dying when it is politically advantageous. TARP and the GM rescue were examples of this.

If the judgments, fines and penalties and penalties for corporate misconduct exceed the corporation's net worth, let it die. The worthwhile bits can be peeled off and sold as going concerns.

Giving the government the power to strike a corporation simply because its employees have committed X many egregious acts is an invitation to regulatory harassment in order to get the required number of strikes. Imagine such power in DJT's hands vs the New York Times.
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Re: Elizabeth Warren's "Accountable Capitalism Act"

Post by Mo » 20 Aug 2018, 07:33

Arthur Andersen got the death penalty for something akin to the corporate death penalty described above. The SEC will not accept audited financial statements from convicted felons, Andersen was convicted of a felony* and their main source of revenue was auditing financial statements. However the felony was overturned. By the time it was overturned, so many employees and customers had already jumped ship that they couldn’t stay in business as an ongoing concern. It was overturned because the jury instructions were vague about the crime they were breaking (obstruction of justice because they were shredding Enron documents).
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Re: Elizabeth Warren's "Accountable Capitalism Act"

Post by JasonL » 20 Aug 2018, 11:46

To switch gears just a bit into workability - there is a public choice set of concerns that tends to make regulators not give death penalties. It’s the same tensions that cause bailouts. Every pol wants to be job creator and being job killer is toxic. There are other features too - take BP. Their Deepwater Horizon fines and settlements are in the $64 billion zone. Yo that’s real money. They were allowed to pay over a number of years. Had they sunk, a) the British pension system would be in big big trouble, b)possibly resulting in recession, c) so they probably would have been bailed out.

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Re: Elizabeth Warren's "Accountable Capitalism Act"

Post by Kolohe » 20 Aug 2018, 15:01

This is a actually why I don't think new board representation voting methods with change things all that much.
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Re: Elizabeth Warren's "Accountable Capitalism Act"

Post by thoreau » 20 Aug 2018, 15:10

Shem, Mo, and others have pointed to examples of corporations not being meaningfully punished for patterns of behavior. This sort of thing breeds distrust in systems and institutions, and distrust tends to breed sympathy for ill-conceived ideas. One such idea is "If we just make the punishments EVEN HARSHER then we'll see improvements!" The problem is a system that isn't currently willing to deal out punishments when warranted. Empowering them for EVEN MOAR punishment will, at best, lead to no change (they still aren't willing to punish, and maybe now even more reluctant for fear of fallout from disproportionate punishments) and at worst lead to abuses (Trump starts deciding which companies to shut down).

I don't know enough about the system to say how you get from where we are to a place where patterns of misdeeds are more reliably punished but that seems to be the discussion we should have.
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Re: Elizabeth Warren's

Post by Jennifer » 20 Aug 2018, 15:17

JasonL wrote:
20 Aug 2018, 11:46
Had [BP] sunk, a) the British pension system would be in big big trouble, b)possibly resulting in recession, c) so they probably would have been bailed out.
My first or second post on this thread, entertaining the idea of a "corporate death penalty" (or devising some equivalent to "corporate imprisonment") did mention the importance of deciding what, if anything, is to be done with said company's assets, and how much is given back to stockholders and other investors. (I cannot speak for E. Warren, but I certainly am not proposing "The government gets to confiscate every cent of the company's holdings for itself.")

Also -- and this is me mentally crossing wires with a different, unrelated article I happened to be reading recently -- the argument "Regardless of the bad things these companies do the companies must survive, lest the economy be harmed" -- yeah, well, that's identical to one of the arguments pro-slavery people made against abolitionists before the Civil War. Not that I am comparing the likes of BP, GM or Wells Fargo to slaveholders -- but I am saying "If your economic system requires letting people or companies get away with such egregious things, perhaps changing the economic system is better than letting these egregious things continue." BP never did and never will clean up all of its mess in the Gulf, they never made full compensation to all the Gulf people whose lives and occupations were destroyed by their reckless incompetence -- and arguing that it has to be this way, lest we risk innocent stockholders having to suffer, sounds like one of those "Why capitalism is inherently evil" arguments you see on literal capital-c Communist websites.
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Re: Elizabeth Warren's "Accountable Capitalism Act"

Post by JasonL » 20 Aug 2018, 15:27

Broadly, fines do usually get assessed and paid. If you look at biggest fines they are in regulated industries like finance and pharma and in energy companies with environmental risk. We can say the magnitude of fines of the most egregious things should be larger - I have no problem with that discussion. The BP deal is a very large sum of money that strikes me as roughly appropriate given the size of the company impact etc. By comparison the BoA settlement and penalties for it's role in mortgage crisis was $16billion. Maybe that's not big enough? Stock was trading in the $50s in 2007. It was trading in the $6-15 zone in like 2012. Back up to $30 something now. So, was reputational hit and a decade of that kind of stock performance a slap on the wrist or a really big hit?

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Re: Elizabeth Warren's "Accountable Capitalism Act"

Post by JasonL » 20 Aug 2018, 15:29

arguing that it has to be this way,
Nobody here made that argument. I pointed out that politicians have an interest in seeing it that way and politicians would be running any alternative scheme.

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Re: Elizabeth Warren's "Accountable Capitalism Act"

Post by JasonL » 20 Aug 2018, 15:31

To my knowledge BP has paid every red cent of penalty and settlement they negotiated with regulators and class action particpants, and it totaled over $60 billion dollars. That's HUUUGGE sum of money.

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Re: Elizabeth Warren's

Post by Painboy » 20 Aug 2018, 16:07

Jennifer wrote:
20 Aug 2018, 15:17
that's identical to one of the arguments pro-slavery people made against abolitionists before the Civil War. Not that I am comparing the likes of BP, GM or Wells Fargo to slaveholders -
But you just did. Comparing something to something and then saying you're not comparing something doesn't change that you just compared those things. Is it possible to try to find an analogy a little less inflammatory that actually has something to do with modern business practices?

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