Fixing Wall Street & Washington, D.C.

A whole lot of problems on Wall Street and Washington DC could be taken care of by changes in our corporate laws. For example, there is lots of talk about excessive CEO pay but that is only a symptom of a more systemic problem.

Generally neglected by both politics and social reform-the corporation is a potential engine of progress. The extraordinary fallacies and failures of corporate law has caused this last crisis in our nation and the world today.

Public corporations need to get back into the business of promoting the public interest. Public corporations can be managed to promote the interests of all stakeholders, including shareholders, workers, creditors, and the communities in which corporations operate, while promoting both profits and social welfare. We need new principles for corporate law designed to serve the interests of society as a whole, while promoting both efficiency and justice.

Fixing Wall Street:

1. More democracy and empowered shareholders. If this was the case we wouldn't need caps on CEO salaries. Corporate law was developed around 400 years ago when there was a much more limited media and no Internet.

2. No reciprocal board seats. That is management and boards can’t serve on each other’s boards. The corporate veil needs to be much more permeable. When management screws up they can be fined and punished rather than the shareholders who have had nothing to do with it. As it is, management screws up and the corporation gets fined resulting in the shareholders paying.

3. Management paid bonuses over 5 year periods. Stock options only vest after 10 years. This would eliminate the need for clawbacks, insure more long term management decisions rather than quarter to quarter and year to year and stop the short term manipulation of the stock.

Fixing Washington DC:

1. Lobbying is now completely out of control and Corporate America owns Congress. There are now 40,000 registered lobbyists in Washington with bags of money making whores of our legislatures. We should eliminate corporate lobbying except by real persons (as opposed to entities like corporations and governments). As long as we continue to accept 'corporate personhood' as a valid declaration, there is no recourse. It gives Wal-Mart, AT&T, GM, etc. the same rights as actual living, breathing human beings - all the privileges of citizenship without any of the responsibilities or consequences for their failure to act responsibly.

The federal government/bureaucrats are beholden to the lobbyists in Washington who are paid by foreign governments and local and foreign corporations and any other freeloading organization with an agenda not remotely aligned and often at odds with the taxpaying US public. And do you know who benefits from the corporate lobbyists? One would think the stakeholders but that’s not the case. Its top management. And that's a whole other issue.

Also see Carl Ichan's analysis: http://www.icahnreport.com/