Issue #2. Ending short-termism on Wall Street.
Wall Street has become place where companies and individuals get rich
gaming the system. Goldman Sachs is being prosecuted by the Department
of Justice for betting against its clients own interests and winning
big. Derivatives are complex financial instruments that we now know are
little more than a sales concept that generated billions in commissions,
but helped bring down an entire economy. Warren Buffet argues strongly
for value investing, i.e., investing in companies that have solid
fundamentals and who are thinking long-term in the way they manage their
resources and their business. Wall Street needs to be reformed so that
gaming the system, incomprehensible financial instruments, and
short-term financial plays that encourage companies to engage in
unsustainable short-term practices, all are illegal.
A Battery of
Wall Street Reforms: We need to install a higher capital gains tax on
short-term investments such that the incentive is to invest in companies
long-term so that they have an incentive to develop their employees,
conserve resources, contribute to their communities, be more honest with
their shareholders, absorb short-term losses knowing they will be
positioned for long-term gains. We need to severely restrict all
derivative type financial instruments. We need to install an
independent civil society controlled rating system of all publicly
traded and large private corporations to evaluate their true social,
environmental , and economic sustainability. Financial ratings
institutions are captive of the corporate marketplace, as evidenced by
their inaccurate ratings of financial institutions that brought the US
to near financial ruin. Finally, all levels of government procurement,
subsidies, tax benefits, etc. need to be restricted only to companies
that rate highly on all three of the aforementioned dimensions.
What we propose:
A
Battery of Wall Street Reforms
We need to install a higher
capital gains tax on short-term investments such that the incentive
is to invest in companies long-term so that they have an incentive to
develop their employees, conserve resources, contribute to their
communities, be more honest with their shareholders, absorb
short-term losses knowing they will be positioned for long-term
gains. We need to severely restrict all derivative type financial
instruments. We need to install an independent civil society
controlled rating system of all publicly traded and large private
corporations to evaluate their true social, environmental , and
economic sustainability. Financial ratings institutions are captive
of the corporate marketplace, as evidenced by their inaccurate
ratings of financial institutions that brought the US to near
financial ruin. Finally, all levels of government procurement,
subsidies, tax benefits, etc. need to be restricted only to companies
that rate highly on all three of the aforementioned dimensions.
