- Yves Smith notes that a short-sighted focus on returns for shareholders generally represents a poor allocation of resources even on the level of a single corporation - while also pointing out what that mindset does when shared across the business sector:
As the Occupy Wall Street movement correctly recognized, the concentration of income and wealth of the economic top “one percent” of society has left the rest of us largely high and dry. Corporate profits are increasingly going to share buybacks or dividend distribution, but very little is going back into research and development efforts, capital reinvestment, and employment.- Meanwhile, Nick Cohen writes that the ample funding and brazen dishonesty of climate-change denialists has thus far trounced scientific facts in the battle to set environmental policy.
Corporations, in other words, are devoting increasing amounts of their considerable and growing financial resources to redistribution rather than innovation. And they are doing so based on the justification of “increasing shareholder value.”
However, as Lazonick points out, when the shareholder-value mantra becomes the main focus for companies executives usually concentrate on avoiding taxes for the sake of higher profits and don’t think twice about permanently axing workers. They also increase distributions of corporate cash to shareholders in the form of dividends and, even more prominently, stock buybacks.
When a corporation becomes financialized in this way, the top executives no longer concern themselves with investing in the productive capabilities of employees, the foundation for rising living standards. Instead they become focused on generating financial profits that can justify ever higher stock prices – in large part because, through their stock-based compensation, high stock prices translate into megabucks for these corporate executives themselves.
It’s not a pretty state of affairs. Lazonick discusses how we evolved from a society in which corporate interests were largely aligned with those of broader public purpose into a state where crony capitalism, accounting fraud, and corporate predation are predominant characteristics.
Lazonick makes a very powerful case that the ideology of “maximizing shareholder value” primarily works to the benefit of the very corporate executives who make corporate resource allocation decisions, and who derive high levels of remuneration from munificent stock option awards. As for the rest of us, we’re left to fight over the crumbs.
- Lana Payne offers her take on the Unfair Elections Act, while the Globe and Mail calls for the bill to be scrapped. Laura Payton observes that while the Cons have conjured up plenty of imaginary issues to be resolved by decrees from on high, they've done nothing to address very real concerns about voter privacy. And Malcolm French highlights a worrisome step toward U.S.-style partisan oversight of elections:
To this day, no honest observer can say with absolute confidence which of Al Gore or George W. Bush received the larger number of votes in Florida. At the end of the day, the election was decided by the fact that there were more Republican state officials and Republican appointed judges involved in the adjudication of the results than Democratic state officials and Democratic appointed judges.- Meanwhile, Susan Delacourt sees the Cons' desire to radically overhaul elections, other political institutions and judicial appointments without the slightest bit of input from the public or from other parties as ample reason for a federal election.
As a Canadian, I thought the oddest thing about the entire Florida recount was that every single official and every single judge acted according to partisan interests. That applies as much for the Democrats as the Republicans. No one actually cared about finding the democratic outcome of the vote. Unlike a Canadian judicial recount by a judge legally obliged to be impartial, the American system is an entirely partisan affair at every level.
It seems our present government likes the American model, where democracy is less about who gets the most votes than about who gets to appoint the most officials. The Harper government's Orwellianly named Fair Elections Act (dubbed by pretty much everyone else as the Unfair Elections Act) takes every lesson of the far right assault on the American electoral process and imposes it on our hitherto non-partisan process.
- Finally, Michael Harris lists a few of the questions we should expect to see answered as the Robocon investigation continues.