States demand licenses and similar requirements for people who choose to engage in certain professions that involve the potential to bring harm to individuals and citizens individually or en masse or both. Among these are doctors, lawyers, civil and other engineers, and even cosmetologists (i.e. hair stylists and others in the "beautician" professions).
For similar reasons, we should require licenses for the officers of corporations that control segments of the economy that are so incredibly important and, apparently, potentially threatening to the American Public.
In the terrifying spectacle that has been the financial sector over the last few weeks, we've all witnessed some pretty reprehensible and depressing things: bailout benefactor AIG using bailout money to fund junkets for executives, people committing suicide because of foreclosures, despondents killing their families and themselves because they are unable to provide for them, renters evicted from foreclosed properties (prompting the sheriff mentioned in that article to suspend enforcing foreclosure evictions; one bright spot in a sea of despair), conservatives blaming the poor (especially poor minorities) for the current crisis (including our lovely Ms. Bachmann), and so many more.
Corporations are fictitious entities: they are constructs of legislation that exist only so long as permitted by legislation. The concept of the corporation in principle serves many purposes, many of them good and necessary for the regulation of an ordered market. The problem, as we've learned, is that the "regulation" part of this system has been lax or missing altogether for far too long.
The way these huge, failing corporations have behaved over the last few years and decades (yes, decades) has been anathema to the very concept of democracy. Their primary shareholders, executives, and board members have abused the protections and benefits afforded to them by the corporate structure to the detriment of everybody else. This includes in many cases (such as for Washington Mutual or Lehman) the "lesser" shareholder-owners of the corporation.
Now we're told that those giant corporate entities that remain are "too big to [be allowed to] fail." If we let them fall, we're told, our entire economy and our modern existence as we know it is imperiled. So "we" passed a giant giveaway/bailout to these corporations. Consider this in light of the remarks I made in my opening to this diary.
We don't allow individual doctors, dentists, lawyers and a host of others to practice their profession without licensing, review, and strict regulation of all sorts. Yet we allow these governors of our corporations to essentially do whatever they want. It's absurd.
We should require that the executives at upper-mid- and higher levels of corporations, including all corporate officers, be licensed with periodic review by the state, period. The licensing regulations should be at least as strict as those for, say, a civil engineer working for a city or a doctor, and in a context appropriate for the size of the corporation and the extent to which it may potentially impact our economy.
In order for an officer or "major" executive of a corporation to maintain his license to function in his position, he should be required to periodically demonstrate the following:
- that he is current regarding the regulations and responsibilities corresponding to the positions they hold (e.g. CFOs should be required to demonstrate current understanding of accounting procedures, securities regulations, etc.);
- that he has used his authority and responsibilities within the corporation in accordance with the regulations to insure the corporation is operating within the bounds of regulations and law.
If a group of people want the near-absurd benefits we grant to corporations--the ridiculous tax incentives, breaks, and loopholes and the high level of protection of the private individuals from litigation and criminal prosecution for corporate malfeasance among others--they should be held to a higher standard.
What I've offered is a start. Not being an expert on either law or the economy, I've offered what I consider a good start--merely hold these "too big to fail" types to the same standard we hold our dentists, doctors, and engineers to. The details can be hashed out and argued over by those with a more thorough understanding of things, but the basic principle I believe is sound.