Political discussions always seem to be an agonizing process of two people always talking past each other. So I say it is high time we start talking in words the Republicans understand. The specific words I have in mind are "joint stock venture", the basis of nearly all commerce and liberal society for the past 300 years. What most Americans are unaware of, is that corporations are the embodiment of an artificial person. Legally speaking, each company is person, whose decisions and memories are kept in a physical medium known as the corporate books. Decisions made by corporations require, as a rule, multiple people (or in the case of some LLCs and S-corps only a single share holder) to sign off such that the corporation is independent of any one individual. In many companies, some shares give you the rights to vote on those decisions, other shares however, give no such protection.
When Alan Greenspan admitted to a flaw in his world view, that corporations would look after shareholder value in order to protect their own long term interest, his failure lay in two core areas: the fact that short term gains for managers could outweigh long term interest especially among highly mobile executives, and the fact that most shareholders were represented by corporate entities that rarely if ever voted their shares.
Fundamentally, the failure of corporate governance which created the current economic crisis was no different from the failure of any democratic political process. When the executives (read well connected lobbyists), pad their own compensation with stock and other perks at the shareholders' expense, they are negligent in their fiduciary duty. When the board of directors (read politicians), who have the power to appoint executives and set executive pay, collude to raise their own pay through sitting on each other's boards, they also are negligent in their fiduciary duty to their shareholders.
Now, the problem is compounded when those shareholders are themselves corporations run by the same small cabal of high level executives that run the financial services companies, former political office holders, and well connected lobbyists. We have a name for these shareholders, we call them mutual funds and hedge funds. You would be hard pressed to find a single mutual fund that ever voted your shares in any of the companies purchased with the funds from your 401k.
As progressives, we are really dropping the ball if we allow this situation to continue. When we look at labor agreements with the automakers in Detroit, we should be talking not to the executives, but to the shareholders. We should encourage those shareholders to vote out their directors and replace them with more progressively minded leadership. Moreover, rather than simply giving up wage concessions, labor should seek the same compensation that executives get in the form of block stock grants. Block stock grant devalue existing shareholder value through an inflationary process of simply printing stock. However, it is always in labor's interest to look towards the long term financial health of the company, as their lack of independent means requires that the company stay solvent in order to provide their day to day needs.
As such, the joint stock company can be the vehicle by which true progress can be achieved entirely within the current legal context. With a few minor tweaks, we can further improve the climate of corporate governance and prevent a repeat of the current financial crisis. My personal thoughts on this issue run along the lines of:
Mandate all corporations have only 1 type of share, with 1 share = 1 vote.
Mandate that no corporation may be less than XX% employee owned.
Mandate that >XX% of all shares must be voted on all shareholder petitions.
Most of these rules have to do with normalizing some of the terms of incorporation, which currently vary greatly from state to state, and ensure that healthy corporate government follow the same principles that make our capitalist democracy work in the first place. Lastly, when it comes to bailouts, I think since we the people of the United States of America have paid for them, we should demand something in return, specifically:
Mandate that all government bailout funds given to a company must be exchanged for market value stock grants, and these shares shall be equally divided among all employees and independent contractors of the company and its subsidiaries.
This means the janitors working for Bank of America would receive the same shareholder grant as top management. It would mean that our recapitalization of these institutions would not directly prop-up existing shareholders who failed to prevent the gross negligence of their elected directors and appointed management. (you know that accountability Republicans always like to throw out) And at the same time would enfranchise more people whose lives depend upon these institutions in the governance of these same institutions. And after all we the people bought the shares, we should be able to distribute them how we best see fit!
That's my 2 cents,