
Elizabeth Warren unveils bold new plan to reshape American capitalism - deegles
https://www.theguardian.com/us-news/2018/aug/15/elizabeth-warren-accountable-capitalism-act-richest-companies
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dang
Discussed at
[https://news.ycombinator.com/item?id=17766031](https://news.ycombinator.com/item?id=17766031)

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thatswrong0
$1 billion in revenue seems like an odd choice. If you have low margins and
large numbers of sales, you could easily be hitting $1 billion in annual
revenue with, say, ~500 employees. And your profits might not even be that
high. Why not set it to $X of profit? Or $X profit per employee?

Anyway, I see no co-sponsors, so the purpose of this is probably to just be a
talking point during the 2020 primaries.

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394549
> Why not set it to $X of profit?

Probably because management can deliberately reduce profit, and realize
shareholder gains in other ways. Amazon famously had very small profits over a
long period of time because it reinvested all of its revenues back into its
business:

[https://qz.com/987559/charted-amazons-amzn-profitless-
path-t...](https://qz.com/987559/charted-amazons-amzn-profitless-path-to-
world-domination-over-the-past-20-years/)

[https://qz.com/1196256/it-took-amazon-amzn-14-years-to-
make-...](https://qz.com/1196256/it-took-amazon-amzn-14-years-to-make-as-much-
net-profit-as-it-did-in-the-fourth-quarter-of-2017/)

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thatswrong0
> Amazon famously had very small profits over a long period of time because it
> reinvested all of its revenues back into its business

That's very different from deliberately reducing profit for the sake of the
shareholders though. Making capital investments for the sake of growing a
company.. should be desired, no?

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news_to_me
It's hard to legislate that distinction without getting messy, though.
Hollywood, for example, is famous for the tax hoops they jump through to make
it look like blockbusters lose money so they can avoid taxes.

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thatswrong0
From a top Quora answer:

> Hollywood accounting isn't about avoiding taxes, studios still pay taxes on
> revenue whether a film makes a dollar or a billion dollars.

> What hollywood accounting does is shift costs around to avoid paying
> royalties and avoid contractual obligations of profit sharing.

I really don't think dealing with profit vs. revenue would be messy at all.

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news_to_me
I could be wrong about the specifics of Hollywood accounting, but I don't
think it's hard to imagine similar techniques being used to circumvent tax
laws based on profit.

Also, would you please link to the Quora page you referenced?

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ilove_banh_mi
What is the principle behind the $1 billion revenue cut-off? why not simply
regulate all corporations with more than N employees, say 10 employees?

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news_to_me
I haven't read the legislation, but I assume the intent is to target companies
with an outsized influence on the economy. It makes sense to me that the
institutions that have the most influence on society should be somewhat under
society's control.

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Justsignedup
Wait, she's positioning to be the 2020 candidate? I mean I'd vote for her in a
heartbeat, but I thought she explicitly stated she didn't want it. But I guess
great leaders don't want leadership, leadership is requested of them.

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shiburizu
Wasn't the whole problem with a lot of utility/service providers people hate
nowadays that they have government charters that mandate their dominance in
the field?

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dragonwriter
This isn't a government _monopoly_ , it's more like a license.

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news_to_me
A couple things stood out to me in this article:

> "The private market will reward those that take care of their stakeholders"
> (Kevin Kelly)

One of Warren's main points is that this is visibly not true: "Real wages have
stagnated even as productivity has continued to rise"

> “What she’s talking about is freezing the economy as it is, keeping things
> as they are." (Steve Forbes)

Unsubstantiated. I'd like to see an explanation of how this could be true.

I'd really like to see these conservative-corporate types actually defend
their positions sometime without resorting to "socialism is bad!" or "the
economy will falter!", which are just bogeyman arguments.

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smacktoward
_> > “What she’s talking about is freezing the economy as it is, keeping
things as they are." (Steve Forbes)_

Give him some credit though, it takes real nerve to argue against big changes
by saying they wouldn't change anything!

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bgorman
This bill seems like it forces socialism/command economy on all companies
valued greater than 1 billion dollars. It is amazing something like this came
from a United States senator. The worst thing about stuff like this is that is
socialism is hard to dispell in sound bites. Unfortunately millennials do not
remember the Soviet Union.

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spamizbad
> Unfortunately millennials do not remember the Soviet Union.

Unless there's a sustained period of economic prosperity similar to what
followed WWII, socialism will continue to gain support among Millennials. Most
of the warnings around socialism sound similar to those we've heard about
illegal drugs: "I smoked one weed and it ruined my life" = "I put in modest
regulation and now it's the Soviet Union"

Edit: Specifically, unless Millennials experience some measure of sustained
economic growth and stability, derived from capitalism, socialism will likely
continue to rise in popularity.

Capitalism is in need of a better argument than "If you think free markets are
bad, wait till you see communism!"

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ethbro
> Unless there's a sustained period of economic prosperity similar to what
> followed WWII

Economic prosperity isn't the most unique feature post-WWII: severely
flattened income inequality is.

I.e. the top 10% going from ~45% income share in 1937 to ~33% from 1942-77.

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spamizbad
Sorry, i should be more specific: "Unless a majority of Millennials begin to
experience a measure of sustained economic prosperity..."

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ethbro
Functionally equivalent. I was just cart / horsing to include a possible cause
vs an effect.

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jbob2000
As much as I like what Elizabeth Warren says and stands for, it seems that she
has absolutely no power to get anything done. So much so, that whenever I see
her name in a headline, I know to avoid the article because it's all fluff and
nothing will come of it.

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bmm6o
Passing legislation now is not the reason she is proposing this. By the time
the Democrats have the votes to even make passing this a possibility, it will
no longer be a new idea and won't seem to radical.

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jbob2000
That’s a huge list of assumptions. I’m really surprised I’m getting downvotes
for this. The bill she proposes simultaneously pisses off big business _and_
the right wing. There is absolutely no way this legislation is getting
through, it’s just pandering for the media.

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bmm6o
I'm not sure what "huge list of assumptions" you are referring to, merely the
idea that she knows this can't pass today?

I think putting these ideas out there in concrete form is a fine approach. If
she wanted to "pander to the media" she could have just come up with a slogan
with nothing behind it. An actual proposal that can be debated is the opposite
of pandering to the media. "Repeal and Replace" as the entirety of your
proposal is pandering to the media.

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benjohnson
She should go ahead and see how it worrks. Nothing stopping her from starting
her own company that voluntarily follows her rules.

However, the fact that it seems like she want to force others to follow her
rules rather than embark on her own creation tells me that she understands
there some flaws in her idea.

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news_to_me
I guess you don't have a great grasp on the concept of government, then.

