Where are The Shareholders' Mansions? By David Yermack

David Yermack, Professor of Finance, Stern School of Business, March 2007, 40 page paper in pdf. This gist is this: When CEOs cash in their corporate stock or exercise their stock options to buy themselves a mansion, the stock will likely decline.  They win. Shareholders lose.

There are times as I read this stuff when, as with Veblen,  I just can't tell if it is satire.  We have reached a point in America where the corruption among the Plutocrat-Elite is so extensive and so threatens the polity that we have to expand our definitions of philanthropy and civic engagement to include the Public Pillory.  When those in power fail us, and do so egregiously, and as a matter of course, in connivance with their equally corrupt peers in adjacent sectors, we the people revert to our primitive condition, outside the shattered social compact. We become what we always were, joyous full throated satirists,  ever willing and ever able to denounce and humiliate those who have betrayed our public trust.  Satire is rough justice, vigilante justice, but none of us is above the law, and no one is above a bare bottom thrashing by a good self-appointed Morals Tutor to the Stars.  At least satire is all in good fun.  The goal is not to injure but to reform those who need it most.  We can all agree that maintaining public morals is a key national concern.  Generally, those beaten kiss the rod. 

Then again, the Yermack study may well be just a factual account of capitalist dysfunction.

Comments

[JJ Commoner]

Shoshana Zuboff wrote a book about 3 years ago you may remember titled "The Support Economy - Why Corporations Are Failing Individuals and The Next Episode of Capitalism" in which she used as a main concept and term "managerial capitalism".

Same stuff, same issue.

[Phil]

Corporate Democracy.