Professor Bainbridge makes some excellent points about Wal-Mart’s new romance with the prospect of an employer “pay or play” mandate for health care.  In so doing, he touches upon Wal-Mart’s longstanding status as a target for labor organization and its apparent hope that by endorsing “pay or play” the company can stave off the unions.

Unfortunately, there’s nothing at all untypical about this.  Businesses commonly employ lobbying strategies that embrace for their own parochial purposes policies not in the general business interest.

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In my younger and more vulnerable years, I worked for a Fortune 50 communications company.  I once asked my boss, who was a big guy in the company’s Manhattan bunker if he traded options in the company.  He looked at me in disbelief.  “Trade in puts and calls in our stock?” he said.  “That’s go to jail time, baby.” Read the rest of this entry »

In her summary remarks  prior to last Friday’s vote on cap-and-trade legislation, Speaker Nancy Pelosi summed up the bill from her perspective:  “…just remember these four words for what this legislation means:  jobs, jobs, jobs, and jobs.”   Jobs certainly are an issue with cap-and-trade, but probably not in the way the Speaker meant.

The press has been keeping careful count of the number of “czars” that President Obama has appointed, a “czar” being someone who has responsibility over particular policy matters such as, for example, cyber security, automobile company bankruptcies, and the like. 

The appointment of such specialists is nothing new and reflects the arteriosclerosis of the Cabinet system.  Rather than bemoan the proliferation of czars, perhaps entrepreneurs should be calling for their own economic growth czar.  This person would be reporting to the President about the growth effects, positive and negative, of all new regulations and legislation with a special emphasis upon the need for more open trade, greater access to low cost investment capital, and a corporate governance system built on something more useful than resentment of people trying to get wealthy by building their companies, a process that, after all, creates jobs.

The Securities and Exchange Commission (SEC) is contemplating the reimposition of price-based restrictions on short selling, commonly called uptick rules.  The SEC eliminated uptick rules just two years ago, following a painstaking, seven-year study of the matter. Read the rest of this entry »

By proclamation of the President, May 17 - May 23 is World Trade Week.  As his proclamation notes, the President believes that trade “is a significant and increasingly important contributor to U.S. economic growth.”  To increase trade, he is promising “a plan of action” to build on current trade agreements and complete the  Doha Development Round.

This is good news and the CEO-members of the American Business Conference will do everything they can to support the President in this work.  So far, though, the signals from the White House have not been good:

• the Colombia free trade deal remains blocked in the House by Speaker Pelosi while the bilateral agreement with South Korea seems entirely off the radar screen;
• on the matter of Mexican trucking, the U.S. is in violation of its Nafta obligations;
• there has been no discussion to date about sending legislation to Congress giving the President trade negotiating authority; and,
• the President’s proposals on the “reform” of international tax policy would subject American firms doing business overeas to an extra layer of taxation, above and beyond the current business income tax which is one of the highest in the developed world.

We take the President at his word when he says that the United States must be globally competitive.  But to adopt policies to help make that happen, the Administration must first disenthrall itself from the kind of anti-business, protectionist attitudes that currently tincture so much of the discussion about trade.

While institutional investors in public companies typically vote their shares, often with the help of proxy advisers, individual investors with brokerage accounts typically do not vote.  In fact, the rate of individual shareholder voting is today at an all time low, a problem that is beginning, justly, to worry observers at the Securities and Exchange Commission as well as the leaders of small and midsize companies whose shares are disproportionately owned by individuals compared to the ownership patters found among big businesses.

To address the problem of the low rate of individual shareholder voting, ABC supports the establishment of Client Directed Voting or CDV.  We describe this proposal in a recent article in Directors and Boards, which can be accessed here.

One of  the reasons typically advanced for card check legislation — which would, among other things, make it possible to organize a company without a secret ballot election by relevant workers – is that secret ballot elections are somehow biased against unionization.

The data belie this.  In the first half of 2008, the uni0n win rate in private sector organizing elections was 66.8 percent, according to the National Labor Relations Board.  This win rate has been tracking upward, with one exception, for the last five years.  In 2003 the union win rate was 58.3 percent; in 2004, 58.6 percent; in 2005, 61.3 percent; in 2006, 61.4 percent; and in 2007, 60.5 percent.

Not bad.

From the Wednesday, April 15 edition of The Hill:  “You just can’t tax the rich enough to make this all up.” 

 So says Martin Sullivan, an economist from the Reagan years who said he supported President Obama last November.

He’s quite right, of course:  the spending contemplated by the Administration, even with the expiration of many of the Bush tax cuts, will result in a huge growth in the deficit and, therefore, in interest costs.

There is a tax hike on the middle class coming:  and, to quote a former head of the Congressional Budget Office I know well:  “it is spelled V-A-T.”