The White House is intervening at the last minute to come to the defense of multinational corporations in the unfolding conference committee negotiations over Wall Street reform.
A measure that had been generally agreed to by both the House and Senate, which would have affirmed the SEC's authority to allow investors to have proxy access to the corporate decision-making process, was stripped by the Senate in conference committee votes on Wednesday and Thursday.
. . . Advocates said that the corporations fought the issue primarily over executive compensation concerns. Given proxy access, investors could rein in executive salaries.
Grim says he has five separate sources on this.
Who did it?
The investor-protection language was stripped and replaced by an amendment from Sen. Chris Dodd (D-Conn.), who leads the upper chamber's negotiations in the conference committee. Dodd is retiring at the end of this Congress.
The gimmick is to say that no one owning less than 5% of a company can can nominate candidates to the board or otherwise participate in corporate governance. Of course, almost no one, even big pension funds, owns 5% of a major company.
Since the Reagan-era changes in the country's tax and regulation policies more and more of the wealth and income generated by our economy has been flowing upward to fewer and fewer people. We have now reached the point where wealth is at least as concentrated as it was in 1929. With similar consequences.
Just how concentrated is the wealth and income? The L-Curve website graphically illustrates the disparity. Here's how it works.
Picture a football field. Each of the 100 years is 1% of the population. At any point on the field you pile a stack of $100 bills to represent the income that a family in that percentile makes. So the median family income would be on the 50-yard line.
According to the site (old data), in 2005 the median family was approx. $40,000, and the stack of $100 bills would be about 1.6 inches high.
The family on the 95-yard line makes about $100K, a stack about 4 inches high.
99-yard line, $300K, about a foot high.
One foot line, top 1/3 of one percent, $1 million, 40 inches.
Now the slope of the graph starts to rise.
$1 billion is a stack 1 kilometer high. (Median family income was 1.6 inches.)
And then you start to get to the really rich. $10 billion is a stack the height of Mt. Everest.
The last few on the field have income representing a stack 15 kilometers high.
Two points:
1) This is old data. The concentration is greater now. The top incomes might not be as high this year.
2) The concentration of wealth is even greater than the concentration of income.
The societal consequences are dramatic. This happened as a result of wealth's ability to influence our country's decision-making. And that influence was used to increase the wealth of the influencers, which increased their influence. But this has come at the expense of regular people, whose incomes have stagnated, forcing them into increasing debt.
We have reached a breaking point where a consumer-based economy can no longer be sustained. But this has not led to any loosening of the grip that money has on our political system. If we don't force the political system out of that grip and restore democracy we will not be able to fix our economic system.
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