GOOD NEWS! Back Door Capitalistic Reform Works!

[dfgrbac]

We have all been frustrated by efforts to reform politics in this country (USA). The people with money have taken control of political power, and the government, to their own advantage leaving the people out in the cold. They think they have won, but wait; are the elite really the only ones with money and the ability to influence government decisions? Who is the real economic power?

The economy does not run by the efforts of the rich. It runs by the buying power of everyone. We, the people, have much more power than we know if only we would act in unison. But the media and massive advertising tells us where we should spend our money, and most of us follow the lead like good little puppies. Well, that is changing. I have written about this subject before, but the success of this reform method is becoming even more obvious.

For example, in his article The New Colossus, William Greider reports how public pension funds are using their considerable financial clout to force offending corporations to be more socially responsible. As he points out, “nationwide, public funds hold about $2.7 trillion and union-managed funds have another $400 billion”! This is no chump change! Reform minded managers of these funds are taking their funds out of corporations that don't respond to their requests for change in corporate policies. This action hits them where it hurts most, stock value and the bottom line. Reformers say these corporations have not been properly calculating future corporate risk factors in their projections to stock holders thus deceiving them about their true stock value. Remember how Enron did it?

Greider says, ”The best evidence that the reform-minded pension funds are onto something --maybe something big -- is the fierce and nasty counterattack launched by business and financial interests.” He continues with the details – check his article.

And about the future, Greider says:

”If the happy day ever arrives when the financial system itself recognizes and reinforces the values of long-term investing, miscreant corporations will be punished in terms they can readily understand: falling stock prices and higher costs on their borrowing. Stock-market analysts will then have to calculate what they now routinely ignore--the long-term economic consequences of social destruction--and investors will learn to prefer shares in healthy companies. The marketplace, in effect, will have the information to "mark down" bad guys and reward managements that are truly forward-looking. That, at least, is the vision.”

”The reformers will get no help from Washington. The Bush Administration clearly stands with the CEOs, who whine about the burdens of complying with the new, rather modest reform regulations.”

I recommend reading the whole Greider article. It is long, but very educational. It is worth the time!