Friday, February 13, 2015

“…as with many other Dodd-Frank reform provisions…”

This piece by Sam Pizzigati caught my eye because it’s such a great illustration of the depth of the problem and the futility of calls for government (re)regulation of corporations. It’s about a Dodd-Frank provision concerning CEO hedging and how it’s, naturally, not been implemented:
Midway through 2010, lawmakers incorporated into the new Dodd-Frank Wall Street Reform and Consumer Protection Act a provision that requires corporations to disclose whether or not they let their execs hedge their bets.

But that provision has never gone into effect. On this reform, as with many other Dodd-Frank reform provisions, SEC regulators have been dragging their feet. In the face of heavy corporate lobbying pressure, regulators simply haven’t yet issued the regulations necessary to fully enforce Dodd-Frank.
But here’s the good news:
Today, after over four-and-a-half years of delay on the anti-hedging front, we’ve finally scored a small victory: The SEC has just issued proposed regs on executive hedging.

Let’s keep the emphasis on “small.” These proposed new regulations have to go through a public comment period. We still could be a couple years more from a final set of anti-hedging regs.

And the SEC’s new proposed regs, keep in mind, don’t prohibit execs from betting against their own companies. They just require companies to let us know if they let their execs do this betting.

Still, progress remains progress. We’ve come a step closer to discouraging an outrageous ongoing CEO scam — and that’s a good thing.
It’s a move, after more than four years, in the direction of putting regulations on the books. Not regulations even to stop this one single practice (while others continue and in some cases are re-allowed), but simply to require its ever-so-effective disclosure. Which might or might not actually be implemented or enforced, years in the future, and which will undoubtedly carry laughable penalties for noncompliance.

I believe, based on my knowledge of the needs of humans and other living beings and of capitalism’s history and trajectory, that radical political, social, and economic changes are urgently needed. This is a long-term project, but not a romantic or unrealistic one. It’s the only realistic one. I’m constantly annoyed at people presenting reformist programs, in the face of a mountain of evidence that they’ve long failed and show every sign of continuing to fail in the future, especially as corporations continue to grow in power and influence, as “realistic.” They’re not. Capitalism is not going to be reformed. That’s not going to happen.

This isn’t an argument against reforms. It’s an argument against the idea that capitalism can or will be controlled through reforms and made to serve real needs. The further we move away from real needs and away from the recognition of the escalating damage, the more we focus on technical rules that will neither be truly implemented nor effective, the more illusory and unreal our politics become. So if we’re going to demand reforms, we should demand big ones, reforms that move in the direction of a good society, and nothing less.

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