Nice post.
How do you read IRA’s, 401K’s, and other individually owned pension funds? Do they encourage the mandarin class of professional corporation and fund managers?
Clearly paperwork creating bureaucracies like the SEC and the many retirement fund oversight agencies do so.
re:Do they encourage the mandarin class of professional corporation and fund managers?
Certainly. Excellent observations. Thanks.
It use to be not long ago, that the CEO made 40 times the line worker salary. Today, even in a loosing business, these “elite” managers make 400 times. Your every word in post #10 hits the nail on the head:
“The capitalists (those who supply capital, assume risk and hope for profit) are now largely pension-fund beneficiaries and small investors investing indirectly through mutual funds. The people running the corporations are, in theory, fiduciaries for the shareholders, but in practice act in their own interests and the interests of their fellow-managers. The “golden parachute” that lets a manager walk off with a bundle of money even if he ran the corporation into the ground in terms of shareholder value along with the egregious examples where such managerial behavior strayed into actual illegality like Enron and WorldCom illustrate my point. Professional managers vote each other fat bonuses even in bad times, even against the interests of the shareholders, who would doubtless prefer that bonuses only be given to managers who increased shareholder value and the rest of the money reinvested or paid in dividends.
And guess what: the professional managerial class in the corporate world is very cozy with the professional managerial class in government and academe and the non-profit sector. As a class professional managers tend to vote and donate Democrat.
There is a reason Gov. Palin’s favorite Chicago-school economist makes a distinction between pro-market and pro-business. In the present circumstances, with corporate governance so out of whack, with the interests of large corporate managers at odds with the interests of both shareholders and small businessmen, it is reasonable for American Conservatives to attack “Wall Street”, but the conservative attack is pro-market, pro-shareholder (and pro-laborer, though that is incidental), not pro-government.”
IRAs, 401Ks and the like can cut both ways: if they are invested in professionally managed vehicles they give power to the “mandarins”, if they are self-managed and the owner votes his or her proxy, they don’t.