Category Archives: political economy

SEC and Boardroom Diversity

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The Securities and Exchange Commission is looking to reach inside corporate governance some more because it Knows Better how to run a company than do the leaders and managers of that company.  The latest travesty is a new rule requiring disclosure of the diversity—by which the SEC means ethnic and gender diversity—of a public company’s board of directors.  This would be an expansion of the SEC’s existing 2009 rule requiring companies to disclose their plans for diversity.

Berkshire Hathaway took the correct position in its SEC disclosure regarding those plans:

Berkshire does not have a policy regarding the consideration of diversity in identifying nominees for director. In identifying director nominees, the Governance Committee does not seek diversity, however defined. Instead, as previously discussed, the Governance Committee looks for individuals who have very high integrity, business savvy, an owner-oriented attitude and a deep genuine interest in the Company.

This, though, isn’t politically correct enough to suit the SEC; hence the new rule under consideration.  It isn’t enough that a company should seek actual talent and skill, it must seek the government-directed correct balance of gender and ethnicity.

This raises a question in my mind: would that be biological ethnicity and gender or self-identified ethnicity and gender?

For the record, I self-identify my ethnicity as American, and I self-identify my gender as The US Male.

Clinton State Department and Influence

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Shortly after Hillary Clinton left the Obama administration, the State Department quietly took steps to purchase real estate in Nigeria from a firm whose parent company is owned by a major donor to the Clinton Foundation, records obtained by Fox News show.

This should have been a routine expression of interest and possibly consummated (in the event, it never was) Department real estate transaction, as James Rosen noted in his piece.

However.

The principle in the proposed deal is Ronald Chagoury,

the brother and business partner, in the Chagoury Group, of Gilbert Chagoury, a Lebanese-born businessman whom federal records show has donated between $1 and $5 million to the Clinton Foundation.

The real estate in question is—was (and maybe still is; the exposed records are not all the story)—reclaimed land:

[A] staggeringly ambitious undertaking: the dredging of millions of tons of sand from the sea floor off Victoria Island and the creation of an estimated 3.5 square miles of new land, on which the Chagourys aim to establish what they call a “21st century city…for residential, commercial, financial and tourist development.”

As Citizens United President David Bossie described the thing,

A month after Bill Clinton visits a Gilbert and Ronald Chagoury-run land project in Nigeria, the US State Department wants to buy the same land.  Who could be so lucky?  A major donor to the Clinton Foundation, that’s who.

Hmm….

What’s also interesting about this story is that the rest of the media are spiking it.  Yes, it was a Fox News exclusive, but since Fox News broke the story on Wednesday, none of the rest of the media have picked it up: NBC, CBS, ABC—all are studiously ignoring it.

Again, hmm….

What’s in Store

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…for the rest of us.  Kate Vershov Downing is a Liberal who has been mugged by reality.  She is—or was until she resigned—a member of the Palo Alto, CA, Planning and Transportation Commission, the city’s central planning facility for all things a private citizen might want to do.  Here’s an excerpt from her letter of resignation from that Commission, via PJMedia‘s Tom Knighton.  (Unfortunately, she’s not completely learned the mugging lesson; she and her husband are moving to another California city.)

After many years of trying to make it work in Palo Alto, my husband and I cannot see a way to stay in Palo Alto and raise a family here. We rent our current home with another couple for $6200 a month; if we wanted to buy the same home and share it with children and not roommates, it would cost $2.7M and our monthly payment would be $12,177 a month in mortgage, taxes, and insurance. That’s $146,127 per year—an entire professional’s income before taxes. This is unaffordable even for an attorney and a software engineer.

There’s more—much more—in her letter of resignation.

It’s clear that if professionals like me cannot raise a family here, then all of our teachers, first responders, and service workers are in dire straits. We already see openings at our police department that we can’t fill and numerous teacher contracts that we can’t renew because the cost of housing is astronomical not just in Palo Alto but many miles in each direction.

But Palo Alto’s fellow commission members, Liberal Planners all, either don’t care, don’t understand, or perhaps worst of all: they got theirs, and the rest can go hang.

Small steps like allowing 2 floors of housing instead of 1 in mixed use developments, enforcing minimum density requirements so that developers build apartments instead of penthouses, legalizing duplexes, easing restrictions on granny units, leveraging the residential parking permit program to experiment with housing for people who don’t want or need two cars, and allowing single-use areas like the Stanford shopping center to add housing on top of shops (or offices), would go a long way in adding desperately needed housing units while maintaining the character of our neighborhoods and preserving historic structures throughout.

But the P&T Commission as a whole Knows Better and has steadfastly refused to allow private citizens, private enterprises, to do these simple things.

This Council has…charted a course for the next 15 years of this city’s development….

Because the Commission members are fortune tellers and seers; they Know what’s going to happen before it happens.

Downing closed with this bit of irony:

We should take care to remember that Palo Alto is famous the world over for its residents’ accomplishments, but none of those people would be able to live in Palo Alto were they starting out today.

This Know Better attitude is what we can look forward to nation-wide if the Progressive-Democrat Party wins the White House this year and with it the Senate.

If You Like Your Plan

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Aetna Inc will withdraw from 11 of the 15 states where it currently offers plans through the Affordable Care Act exchanges, becoming the latest of the major national health insurers to pull back sharply from the law’s signature marketplaces after steep financial losses.

This is playing out exactly as President Barack Obama (D) and his Democratic cronies knew it would ‘way back in 2010—they knew because health experts told them.  These experts advised the Democrats that mandating insurance purchases and paying the sick to get it (those Federal subsidies) while requiring plan providers (no longer can they be called insurers) to provide coverage to all at the same “low” price would emphasize the sick over the healthy getting coverage.  The experts also pointed out that this emphasis on sick customers relative to healthy ones would explode plan providers’ costs.  Obama and his, though, chose to disregard this advice and to go with what they wanted to hear: the self-serving huzzahs of the likes of AARP, who thought they could make money by fronting for the plan providers and collecting a piece of the resulting premium stream through referrals and reselling plans.

Recall, too, that Aetna has merger plans with Humana that Obama’s Department of Justice is suing to block on the speculative grounds that at some future date the new entity might engage in anti-competitive practices.  Never mind that the merger might also have allowed the combined insurers to be large enough to remain in Obamacare.

I wonder if anyone in the Obama administration might know of some beachfront property north of Santa Fe that they might be interested in selling us.

Prior Restraint

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The EU has it.  And it doesn’t hesitate to reach overseas to try to inflict it outside EU jurisdiction.

The European Union’s antitrust authority on Thursday opened a full-blown investigation into plans by Dow Chemical Co and DuPont Co to merge, on concerns the deal would reduce competition [in] the global agricultural sector.

The European Commission said it would investigate whether the deal may reduce competition in areas such as crop protection, seeds, and certain petrochemicals. Announced in December, the proposed merger aims to create an American industry giant with a combined market cap of about $122 billion.

Never mind that the EU, like the US, has plenty of laws with which to deal with actual anti-competitive or monopoly abuse behaviors.  Never mind that prior restraint is destructive of innovation and of competition.

Never mind that this is an American merger between American companies, or that global markets reach far beyond the EU while the EU’s legal reach is limited to the EU.

Here’s a thought, one that takes advantage of the wide world beyond parochial Europe.  Dow and DuPont should simply ignore the EU and merge if they think that makes sense.  And then contribute to that global competition reduction by walking away from Europe (save post-leave Great Britain) and focus their competitive and innovative efforts on that wide world.