It is usual for individuals to be self-interested, but pragmatic people understand that durable, dynamic systems require strong counter-balancing forces. History attests that neither capital nor labor can have it all their way indefinitely. Pendulums swing back and forth over time, because extreme conditions are inherently unstable.
The corporate compensation and financial incentives of the past two decades have been increasingly short-term focused, extractive and destructive for all stakeholders, in the end. New rules and policies will be born of the next global recession and financial crisis, when it becomes painfully clear how poorly resources have been allocated and managed during the latest credit-fueled boom period.
This is not about left versus right, it’s about striking some balance in order to reboot productive conditions for a sustainable economy. Ideas like Senator Warren’s new bill proposal, along with a reinstatement of a ban on share buybacks, as well as greater personal accountability of executives and fiduciaries in all areas, are all key steps that will precipitate the cathartic mean reversion coming.
Jim Cramer sits down with Sen. Elizabeth Warren to discuss her new bill, the Accountable Capitalism Act, introduced on Wednesday. The bill would require large corporations to consider the interests of all major stakeholders in company decisions. Warren also criticized U.S. trade policies that serve corporate interests over the interests of workers. Here is a direct video link.
Sen. Warren tells Cramer about her plan to make companies and CEOs more accountable to employees from CNBC.
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