State of Corporate Governance

Somehow I doubt a bill that starts out tepid and gets watered-down from there will provide anything like the response necessary to prevent, or even delay, the next crash. I sez that Glass Steagall warded off bubbles for decades, and I think it ought to be a good place to start reigning in bankster power. Another place to learn a lesson might be Canada's economy, which survived the bubble well.

Robert A. G. Monks (longtime shareholder activist, Corporate Governance sage, and Reagan appointee), thinks the model of self regulating business is a failure and he calls the Dodd/Frank efforts to inject accountability "pathetic".



I still think that the best purpose of corporate governance is to protect profit for investors from management, since I believe the tycoon-types are morally insane (the modern term is psychopathic personality). It did not escape my notice, for instance, that Mr. Monks in the above video said...

"The failure was largely attributable to the unaccountability of the Chief Executive Officers who ran companies for their own benefit, and for the benefit of other top officials, without any conscience about the public consequence or the long-term consequence of their actions."

I think that many CEOs are, in point of fact, morally insane. This means they are literally incapable of acting from conscience. This means their conscience and their desires are one and the same thing. This means that everything justifies satisfying a desire.

Proper governance ties CEO wealth to corporate success so that society can follow a psychopath to economic prosperity. It is a gamble whose risk should now be evident to all, namely that the morally insane are hoarders when it comes to Power, and experts at corruption.

CEOs need to be made to believe again that their Power does not come at our expense, but at our profit.

If the snake suits, bear it?

Here is a wikipedia entry for psychopathy:

A lack of empathy

After reading the book "The Devil in the White City" and reflecting upon capitalism, it occurred to me that immense companies are naturally attractive to psychopathic personalities (or PPs for short). In fact, I have begun to believe our largest institutions are headed by the morally insane, for this belief explains much that I notice about the conduct of Wall Street big-shots.

If True, and the corporation ensures that the wealth of the CEO is dependent upon the wealth of the corporation, then it is a symbiotic business relationship.

If True, and the wealth of the corporation is deemed to be dependent upon the wealth of the CEO (as Goldmann Sachs repeatedly argues), then the corporation becomes subservient to the CEO and you have an unhealthy business relationship.

With this belief in mind statements like that made by Arianna Huffington recently become self-explanatory:

Watching the CEOs, I was stunned by the utter lack of even a feigned sense of empathy for those whose lives the banks have destroyed. Only a complete inability to feel empathy could explain the fact that the bankers are not just back to operating at their old bonus levels, but at their old smugness levels as well.

Source

Expecting empathy from a psychopath is as misguided as expecting good moral conduct from a PP-led corporation. In fact, they are identical delusions.

In this context one should view the Glass-Steagall Act as a way to protect the wealth of corporations for the investors, rather than as a hindrance to the wishes Wall Street CEOs. It should send shivers down one's spine to consider the wishes of the CEO paramount.

I found there is a book on the subject called "Snakes in Suits" that examines PPs in the workplace. I expect it is an interesting read.

It would seem plausible that immense corporations are best served by morally insane leadership, provided that leadership is forced to use its' unique "talents" on behalf of the corporation.

But, such leadership would strive energetically to escape such restrictions. In the event of their success, our economy would suffer even as our CEOs grew richer. Thank goodness no company is so idiotic as to transfer wealth to the leadership at a time they did a lousy job of generating wealth!

Hardly surprising

I have posted before that I think psychopathic personalities, or morally insane people, would naturally be drawn to Wall Street. The reason is simple, they are driven by lust for power and clearly that is where power in America lies.

This new study posits that an extraordinary number of psychopaths (1 in 10) do work on Wall Street.

1 in 10!

Turn-of-the-century economists like Keynes seemed to take this for granted when they advocated tying CEO wealth to corporate wealth. The idea was, it seems to me, to leverage the skills of the morally insane for the greater good (or at least the good of capital).

Now, however, things have broken down as CEOs manage to enrich themselves no matter the state of the companies they direct. Until Washingtonians restore accountability to profitability there is a high probability of continued American decline.

Insane in the membrane

Accepting the idea that our major CEOs are morally insane, or psychopathic personalities, gets easier every day with exploration. The title of this article by Steven Pearlstein is another brick in the wall:

Wall Street's know-it-alls can't tell right from wrong

All I'm saying is that it is very likely the obvious is True. Wall Street CEOs are not immoral, they are amoral, or literally incapable of weighing moral decisions. They have desires that they satisfy and there is nothing else.

In this context, what finance regulations do is protect profit for the investor from the management.

A crown of thorns

As I watch a single-payer healthcare-for-all die, and climate crisis legislation die, and legislation to police morally insane CEOs die, I become confirmed in my view that America is a one-party system.

The rot seems insurmountable.

Keynes quotation

This notion that the morally insane would be naturally attracted to power, and thereby to the role of corporate CEOs, has really gotten a hold of my imagination. When I read quotes like the following, I am left feeling as if I've missed the obvious for so long that I am embarrassed by my naivete.

"Capitalism is the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone."

— John Maynard Keynes -

Apparently, those with a proclivity towards horrible grammar make excellent economists.

Fish in a barrel

The finding of articles that support my theory that the position of CEO is attractive to morally insane people (or psychopathic personalities) is a job that is all too easy. Here, though, is an article which practically begs the interpretation:

Massey Energy's Blankenship: No shame, but plenty of blame

This is a man that lets no evil outcome deter his purpose or actions. He refuses to take responsibility for his actions, and not only fails to pity those his actions have killed, he manages to feel sorry for himself to boot.

The religious left

Reading this article about the religious left fighting back this morning made me think about how easily Americans are divided.


Are you left or right?

Are you red or blue?

Are you gay or straight?

Are you religious or secular?

Do you support or oppose the Iraq war wholeheartedly?

Are you an environmentalist or a defender of ecocide?

Are you for or against guns?

Are you for or against abortion?

Are you for or against unions?

Are you for or against corporations?

Are you with or against France?

And so on...

The trouble with this politics of divide-and-conquer is that people start looking at every issue in black and white terms, and that is moronic.

For instance you can be an environmentalist, as I consider myself, without being against logging. I am for logging because I would rather people use bio-degradable, renewable, all-natural building products and an outdoor career strikes me as enjoyable (at least on some levels). I am, however, against indiscriminate harvesting techniques which plunder the landscape murderously. I am against spraying thousands of acres of forest land with herbicides which poisons the landscape and the wildlife. I am for wind-power wherever it can be installed, and the quicker the better.

I am both for and against guns, which some people call wishy-washy, but I consider practical. I am a gun owner and I hunt, however I see the folly of allowing guns in the hands of children, the insane, violent criminals, or urban settings (here I am speaking only of use, not ownership).

I am secular, but like most secular people (I think) I haven't convincingly disproved the notion of God to myself (i.e. "absence of evidence is not evidence of absence"). I have only rejected the more popular religious views of God's benevolence. I guess you could say I look at organized religion like a community of the superstitious, but I feel no need to persecute them any more than people that are afraid of black cats crossing their paths. However, I do live an ethical life and try to treat others as I myself wish to be treated, not because I expect a Heaven exists, but because I believe that to love and to be loved is the only way to be happy.

When it comes to abortion I prefer to keep such a deeply personal decision out of the hands of government. In instances of rape, or when the well-being of the mother is in question I believe it is morally correct to allow for abortions. I view nothing so sadly as an unloved child (since I argue they turn out like neo-cons). Also, when a child will be born with a debilitating deformity (i.e. a hole in the brain or incurable painful conditions) then I also believe it is morally correct to allow for abortions. I believe the morning-after pill ought to be readily available, particularly to the young as they learn to cope with the most powerful of emotions. I argue that this does not "cheapen life" as many anti-abortionists charge, but rather allows prospective parents to choose to raise a family when they are prepared to act selflessly on behalf of their children, or in other words to cherish them. I also believe that most people are good people and do not treat the procedure of having an abortion lightly and that assertions to the contrary are propaganda.

When it comes to France, perhaps I am a clear-cut supporter. They are a free and open society that loves good food and good fun, they're cantankerous and argumentative and fantastic bakers. They sent us the statue of liberty. Their citizens resisted the Nazi's with more success than their army. They have a love/hate relationship with the British. And finally, when it comes to Iraq they did what a true-blue friend should, they told us we were wrong.

When it comes to unions I am mostly for them. My grandfather was an early union-man in the textile industry. When I asked him about it he said the mill wanted him to work seven days a week, with no overtime pay, when he was already working six days a week. Sunday, it should be pointed out, was an important day of worship to him and also the only day my grandfather had to spend with his family (8 children!). So, in response to corporate abuse (in my opinion) people joined and formed unions as a matter of self-defense (there is strength in numbers). My dad was also in a union, but he was a member as America's steel-industry went into decline (eventually he had to find a new career). In his case unions had already established the 40-hour workweek and a living wage, but had then started to fight for things uncompetitive like complicated seniority systems, over-zealous job protection (i.e. there was to be no picking-up-of-slack or cross-training). I also believe that in Poland unions turned a nation into a democracy, and that if we encouraged Iraqis organize into unions we'd be promoting deep democratic roots there.

I haven't touched on everything, but you see what I mean don't you? When presented with an either-or yes-no with-or-against choice you must reject the question.