I don't give a rip about the
By Molly Ivins; Dec. 22,
AUSTIN - Since I subscribe to the cheerful theory that the stock
market is a cross between a giant casino and a pyramid scheme, little
that happens there seems to me of much social import.
Between 75 and 80 percent of the People in this country make
less than $50,000 a year, and because I believe their problems deserve
some attention, the woes and triumphs of the stock-brokering classes
are not usually high on my radar.
But I was
interested to find from The New York Times the other day that
end-of-the-year bonuses in the big brokerage houses are expected to
range from $25 million for top managers to a piddly $100,000 for peons.
Perhaps we should have end-of-the-year bonuses for teachers:
Your students all do well on standardized tests and you get, say, a
modest $5 million.
Doug Henwood's book, "Wall Street: How It Works and For Whom,"
is an instructive manual on this giant craps game, one of the most
interesting examples of the fine art of debunking to come along in
years. For those of you who think the stock market exists to raise
capital for corporations to invest in their plants and equipment,
Henwood points out that the stock market has almost nothing to do with
Corporations finance about 90 percent of their investments
internally, through their own profits and according to Henwood, on
those rare occasions when they turn to outside finance, they go first
to banks and then to the bond market.
"A more accurate
description of what the market is all about is that it's a mechanism
for the very rich, as a class, to own the productive assets of the U.S.
economy and extract wealth from them," Henwood wrote for the Los
Angeles Weekly. "Despite all the palaver we've heard in the last five
years about the democratization of ownership through mutual funds, the
richest 1 percent of the population has more investable wealth than the
bottom 90 percent. Financial democracy is even more an affair of
the elites than the political kind."
Speaking of financial democracy, the Securities and Exchange
Commission, which theoretically regulates the stock market, has
recently proposed new rules that will damage the tiny move for
corporate democracy - perhaps irreparably. Under the current rules,
shareholders with at least $1,000 worth of common stock can place a
resolution on a company ballot. If the resolution receives 3 percent or
more of the vote on the first ballot, it can be reintroduced the next
year. In succeeding years, it must garner increasing support 6 percent
and 10 percent - to be reintroduced. Under the new rules, submission
thresholds would be raised to 6, 15 and 30 percent.
Mark Dowie, writing in The Nation, points out that this
requirement is virtually impossible to meet in any Fortune 500 company
and it means the death of the shareholder movement "that over the past
25 years has publicized corporate shortcomings ranging from polluting
the nation's water to assisting South Africa's apartheid regime."
Obviously, corporate managers loathe the shareholder movement,
and for at least 10 years, their lawyers and lobbyists have been
working to kill it. I know many shareholders who, when they come across
those "green" initiatives and social conscience items on their
corporate ballots, figure it has nothing to do with profit so to hell
with it. I know even more who never look at the shareholder ballots at
all: The myth that common stockholders control the corporations is
But, as Dowie reminds us, corporations
were originally chartered to serve the public trust. A corporate
charter was a "privilege" granted to an enterprise formed "for the
public good," and profit to shareholders was explicitly described as a
secondary purpose. We do have a right to call
corporations to account, and now, one of the few feeble mechanisms for
doing so is damaged by the very watchdog agency that's supposed to be
on our side.
The Left Business Observer recently reviewed a book by an
apostate derivatives salesman, "F.I.A.S.C.O." by Frank Portnoy, and
quotes the following passage on why he left that lucrative trade: "By April 1995, I had become the most
cynical person on Earth. I now believed everything was a fraud, and I
had a well-founded basis for my beliefs. Derivatives were a fraud,
investment banking was a fraud, the Mexican and Japanese financial
systems were frauds... . The value system I had acquired in recent
years included shooting at clients and blowing people up (Wall Street
slang for parting clients from their money), all in the name of money.
. . .
Hey, me no Alamo - the guy worked for Morgan Stanley.
Molly Ivins is a columnist for the Fort Worth Star- Telegram. Her
column appears Monday on editorial pages of The Times. You may email
her at email@example.com.