Anonymous wrote:

TheManWithAUsername wrote:
That's not what the BJ rule says. That's just a burden of proof rule, basically. It makes it harder to prove that a director breached, but it doesn't change the fundamental duty.

The BJ rule makes it harder to show that an action apparently against the shareholder's financial interest in fact was, but if a director announces that he took an action he knew to be against the corporation's financial interest, he admits his breach of fiduciary duty.

Do you contend that a director can, within the law, intentionally sacrifice the shareholders' financial interests to some other cause and not be liable? (Note that this is not the same as a short-term sacrifice, e.g. donating to charity in the interest of PR.)

I suppose that depends on what you mean by "intentionally sacrifice." As I myself said, a director can't just give shareholders' money away to some cause they think is more worthy. (Can't we all agree that is a pretty good rule?)

I didn't hear anyone complain about it.

Anonymous wrote:Could a director say "despite the fact that there is a positive expected return to selling a defective product because the likely profit outweighs the likely adverse tort judgments, we are not going to sell defective products because it is just plain wrong" without running afoul of any principle of corporate law? Absolutely, as far as I know -- feel free to cite something to the contrary, if you think I'm wrong.

You're muddying the issue. Obviously, no one is obliged to violate other laws - including tort law - to meet his/her fiduciary duties. A director doesn't have to illegally pollute or murder anyone, either.

Anonymous wrote:Corporate directors obviously have a duty to act in their shareholders' financial interest, but not, as far as I know, a duty to push that principle to the absolute limit without any consideration of morality or social impact. They have far more discretion than that.

They absolutely do not have the discretion to act in the public good - i.e., to be moral or consider the social impact - to the detriment of their shareholders. They have a duty to their shareholders and no duty, other than as defined by other criminal and civil law, to anyone else. To the degree that they sacrifice the shareholder's interests to those of society or any non-shareholder member of it, they have breached their duty.

As I said above, I think you're confusing their latitude as a matter of proof with discretion over whether to support their shareholders' interests. Let's say a director of a large company authorizes a $10k gift - relatively very small - to a homeless shelter. When questioned, if he says he thought it was good PR no one can go after him b/c he gets the benefit of the doubt. But if he says, "Well, it cost us very little, and I just thought it was the right thing to do," he owes the corporation $10k (if anyone wants to bother suing).

TheManWithAUsername wrote:
That's not what the BJ rule says. That's just a burden of proof rule, basically. It makes it harder to prove that a director breached, but it doesn't change the fundamental duty.

The BJ rule makes it harder to show that an action apparently against the shareholder's financial interest in fact was, but if a director announces that he took an action he knew to be against the corporation's financial interest, he admits his breach of fiduciary duty.

Do you contend that a director can, within the law, intentionally sacrifice the shareholders' financial interests to some other cause and not be liable? (Note that this is not the same as a short-term sacrifice, e.g. donating to charity in the interest of PR.)

I suppose that depends on what you mean by "intentionally sacrifice." As I myself said, a director can't just give shareholders' money away to some cause they think is more worthy. (Can't we all agree that is a pretty good rule?) Could a director say "despite the fact that there is a positive expected return to selling a defective product because the likely profit outweighs the likely adverse tort judgments, we are not going to sell defective products because it is just plain wrong" without running afoul of any principle of corporate law? Absolutely, as far as I know -- feel free to cite something to the contrary, if you think I'm wrong. In the real world, of course, there are difficult cases where the issues are shades of grey. Corporate directors obviously have a duty to act in their shareholders' financial interest, but not, as far as I know, a duty to push that principle to the absolute limit without any consideration of morality or social impact. They have far more discretion than that.

Anonymous wrote:

Anonymous wrote:This is all sound and fury, signifying nothing, Mr. Steele. Romney will be the nominee, and the criticisms being leveled now are exactly where Obama was going to go in the general election. I'd say that it might marginally help Romney to get these things out now, except Obama's friends in the media will never treat Bain Capital as old news no matter how many times it has been raised before.

It really may come down to where the unemployment number is in November, with Obama losing at 8% plus, and winning if the unemployment number is lower. In 50/50 nation, every presidential election is kind of touch and go.

If it is so clear that Romney is the nominee, why was it so un-freaking clear to you people for the last six months??!!! You all are just parroting the last thing your conservative handlers tell you.

I, for one, predicted this on this site several times months ago.

Anonymous wrote:

TheManWithAUsername wrote:

takoma wrote:But, in essence, the argument is that it is reasonable that the prime directive is investor profit, not productivity, and certainly not worker welfare.

Corporate amorality: it's not just a good idea; it's the law!

I mention this a lot b/c even most on the left forget this key point. No one is really arguing for corporations to care about nothing other than profit, b/c they won that argument long ago. For-profit corporations must consider no end other than shareholder profits. They are enormous amoral creatures that we create and set loose in our economy, and give Constitutional rights to boot.

This isn't true at all, actually. Corporate directors have extremely wide latitude to manage their business as they see fit under the "business judgment" rule. That's hornbook corporate law. There is simply no legal requirement that "For-profit corporations must consider no end other than shareholder profits." To be sure, this is not unlimited--if say Exxon decided to sell all of its assets and give the money to charity, it would be illegal--but that is a far cry from saying that corporations are legally required to act in amoral ways That is not so.

That's not what the BJ rule says. That's just a burden of proof rule, basically. It makes it harder to prove that a director breached, but it doesn't change the fundamental duty.

The BJ rule makes it harder to show that an action apparently against the shareholder's financial interest in fact was, but if a director announces that he took an action he knew to be against the corporation's financial interest, he admits his breach of fiduciary duty.

Do you contend that a director can, within the law, intentionally sacrifice the shareholders' financial interests to some other cause and not be liable? (Note that this is not the same as a short-term sacrifice, e.g. donating to charity in the interest of PR.)

Anonymous wrote:This is all sound and fury, signifying nothing, Mr. Steele. Romney will be the nominee, and the criticisms being leveled now are exactly where Obama was going to go in the general election. I'd say that it might marginally help Romney to get these things out now, except Obama's friends in the media will never treat Bain Capital as old news no matter how many times it has been raised before.

It really may come down to where the unemployment number is in November, with Obama losing at 8% plus, and winning if the unemployment number is lower. In 50/50 nation, every presidential election is kind of touch and go.

If it is so clear that Romney is the nominee, why was it so un-freaking clear to you people for the last six months??!!! You all are just parroting the last thing your conservative handlers tell you.

TheManWithAUsername wrote:

takoma wrote:But, in essence, the argument is that it is reasonable that the prime directive is investor profit, not productivity, and certainly not worker welfare.

Corporate amorality: it's not just a good idea; it's the law!

I mention this a lot b/c even most on the left forget this key point. No one is really arguing for corporations to care about nothing other than profit, b/c they won that argument long ago. For-profit corporations must consider no end other than shareholder profits. They are enormous amoral creatures that we create and set loose in our economy, and give Constitutional rights to boot.

This isn't true at all, actually. Corporate directors have extremely wide latitude to manage their business as they see fit under the "business judgment" rule. That's hornbook corporate law. There is simply no legal requirement that "For-profit corporations must consider no end other than shareholder profits." To be sure, this is not unlimited--if say Exxon decided to sell all of its assets and give the money to charity, it would be illegal--but that is a far cry from saying that corporations are legally required to act in amoral ways That is not so.

TheManWithAUsername wrote:

takoma wrote:But, in essence, the argument is that it is reasonable that the prime directive is investor profit, not productivity, and certainly not worker welfare.

Corporate amorality: it's not just a good idea; it's the law!

I mention this a lot b/c even most on the left forget this key point. No one is really arguing for corporations to care about nothing other than profit, b/c they won that argument long ago. For-profit corporations must consider no end other than shareholder profits. They are enormous amoral creatures that we create and set loose in our economy, and give Constitutional rights to boot.

Hey Man, many of your ideas resonate with me. OWS proves there are a lot of people willing to do more about it than me sitting comfortably at my computer. And it looks like Obama is making it part of his message, for example with the recess appointment of Cordray.

takoma wrote:But, in essence, the argument is that it is reasonable that the prime directive is investor profit, not productivity, and certainly not worker welfare.

Corporate amorality: it's not just a good idea; it's the law!

I mention this a lot b/c even most on the left forget this key point. No one is really arguing for corporations to care about nothing other than profit, b/c they won that argument long ago. For-profit corporations must consider no end other than shareholder profits. They are enormous amoral creatures that we create and set loose in our economy, and give Constitutional rights to boot.

Anonymous wrote:Oh, I quite agree that it is perfectly fair, but that standard does not seem to me to be applied even-handedly. I've never seen the media take a deep dive into what, specifically, President Obama did during his years as a "community organizer," although perhaps I have missed it. And certainly Obama's utter lack of qualifications was glossed over in 2008. My prediction: we are going to hear way more about Bain Capital this year than about anything President Obama did before his election in 2008. But I quite agree Romney's business record is fair game.

Give the breadth of media outlets available, I think global media fairness is now in the eye of the beholder. IIRC, 40% of people get their new from Faux, so "the media" refers to Faux more than anything else. The media landscape therefore looks like this, from largest to smallest:
1) Faux, a propaganda outlet. In-house partisans work with Reps to generate stories.
2) The "unbiased" outlets, collectively - a close second. Rarely address substance, but report on others making substantive statements. I.e., outlets for the most effective partisan communicators, including Faux itself.
3) Far behind, all of the small partisan outlets on either side.

As we all know, there was plenty of discussion about Obama's minister and a guy he shook hands with once. I hope that no one would contend that Faux declined to explore Obama's record as a community organizer out of some sense of propriety. To the degree that Faux didn't cover it, I assume it was b/c there was not even enough there for them to make a teapot tempest out of, and that's a very low bar.

I think we can confidently predict that Faux will discuss Bain only in the context of defending it and complaining about Democrat class warfare and anti-capitalism. The mainstream outlets will discuss it to the degree that the Dems effectively make it a story. Then you'll have minor players like MSNBC and others on either side.

I agree that strangely little was said about Obama's lack of experience, but I find the failure to cover many things very strange. Most of that failure is explained by the factor I mentioned above of the mainstream media just providing a minimal filter of press releases. Since the Dems wouldn't talk about his inexperience, it was up to Faux and the Reps, and for whatever reason (and I'm sure it was very carefully considered and focus-grouped) they decided to focus on other things. It may have been because they didn't want to emphasize age when their guy was an old coot.

To me, the main point of the Bain controversy is in the reaction of the Republican establishment: It is sacrilegious to attack the idea of "creative destruction". I understand and (more or less) accept that it is healthy for outmoded businesses to disappear. But, in essence, the argument is that it is reasonable that the prime directive is investor profit, not productivity, and certainly not worker welfare.

I think the Democratic argument will be that the Republicans put the investors above everyone else, whereas Democrats seek to protect consumers and workers, by supporting regulation that allows a fair investor profit, but exerts enough control to ensure that "creative destruction" creates something other than a quick profit for investors and a windfall for those managing the investments.

TheManWithAUsername wrote:

Anonymous wrote:Obama's friends in the media will never treat Bain Capital as old news no matter how many times it has been raised before.

As long as Reps (including him) keep citing his great business experience, I don't see why it shouldn't be discussed. In fact, I don't see why his adult professional history would ever be old news. Past behavior is the best predictor of future behavior.

You're right that Romney will be the nominee, of course. I think Jeff is probably just enjoying watching Romney take his lumps and the others wallow in hypocrisy.

Oh, I quite agree that it is perfectly fair, but that standard does not seem to me to be applied even-handedly. I've never seen the media take a deep dive into what, specifically, President Obama did during his years as a "community organizer," although perhaps I have missed it. And certainly Obama's utter lack of qualifications was glossed over in 2008. My prediction: we are going to hear way more about Bain Capital this year than about anything President Obama did before his election in 2008. But I quite agree Romney's business record is fair game.

Anonymous wrote:Obama's friends in the media will never treat Bain Capital as old news no matter how many times it has been raised before.

As long as Reps (including him) keep citing his great business experience, I don't see why it shouldn't be discussed. In fact, I don't see why his adult professional history would ever be old news. Past behavior is the best predictor of future behavior.

You're right that Romney will be the nominee, of course. I think Jeff is probably just enjoying watching Romney take his lumps and the others wallow in hypocrisy.

This is all sound and fury, signifying nothing, Mr. Steele. Romney will be the nominee, and the criticisms being leveled now are exactly where Obama was going to go in the general election. I'd say that it might marginally help Romney to get these things out now, except Obama's friends in the media will never treat Bain Capital as old news no matter how many times it has been raised before.

It really may come down to where the unemployment number is in November, with Obama losing at 8% plus, and winning if the unemployment number is lower. In 50/50 nation, every presidential election is kind of touch and go.

I'd buy him a tent, but he can probably drape his suit coat over a clothesline and call it a day.

This may be the biggest OWS achievement yet. Newt Gingrich has completely adopted the vocabulary of Occupy Wall Street. Moreover, Rick Perry is right behind him with his "vulture capitalists" talk. Apparently, polling in South Carolina shows Gingrich running neck and neck with Romney after erasing a 10 point Romney lead. It will be hilarious if Gingrich shows that financial inequality has legs in South Carolina. Then, he can open his DC headquarters in McPherson Square.