From Christ to Scrooge, we can learn – and change

Bill Knight column for Dec. 13, 14 or 15

Advent is a time of preparation, for celebrating Christ’s arrival at Bethlehem and for his eventual return. Christmastime also is when we again appreciate Christ’s devotion to everyday people, recorded in passages like the Gospel’s Luke recounting Christ reading Scripture: “The Spirit of the Lord is upon me,” he said, “because he has anointed me to bring good news to the poor.”

Between Christ’s love of the needy on the one hand, and Ebenezer Scrooge’s overnight realization that compassion means more than money on the other, Christmas can cause us to reflect and re-prioritize our values.

One reflection concludes that the U.S. “market economy” is broken. That’s despite once-progressive economic and social values, which were discarded like once-bright Christmas trees dragged to the curb in dismal January.

Ten weeks of a gloomy Wall Street performance is one reason to reassess strategies that aren’t functioning for most Americans. Two other reasons are history and the future.

First, there’s that apparent stock market “correction” the economy is enduring. The Wall Street Journal described the New York Stock Exchange’s Dec. 7 finish as “another rout,” putting it “into the red for the year,” adding that the first week of the month was “the worst start to a December since 2008.”

Last month, the Dow fell 223.08 points (.008%), the S&P declined 26.02 (.009%), and NASDAQ went down 32.82 (.004%). Relatively modest losses, November’s slide followed the stock exchange’s substantial drop in October, when the WSJ commented that it was “the worst October for the S&P since 2008.”

Next, some history helps illuminate how the economy has deteriorated for most Americans in the last 40-plus years. An article in Fortune magazine’s October 1944 issue – “The Economics of a Free Society: A Declaration of American Economic Policy,” by corporate executive William B. Benton – outlined a plan for post-war America. A founder of the Benton & Bowles ad agency, Benton represented a corporate lobby when he suggested an economic route for the road ahead. His call for recovery and prosperity focused on having strong unions and rising wages, maintaining government regulations on business, and avoiding the creation of profit at the expense of communities.

His vision was largely enacted and functioned for most of the 1950s and ’60s, when business leaders at least acted like they cared about their communities and labor relations. That started to change in the ’70s.

Corporations’ sense of overall responsibility; duties to employees, customers, suppliers and communities; obligations to a “greater good” beyond financial performances; and a notion of shame all seemed to get discarded like toys or tools once treasured but later deemed obsolete. Since, even when economic growth has been OK (as it’s been since 2008), most gains went to the wealthy. Median weekly earnings since 1979 improved 0.1 percent; families’ net worths are lower than decades ago and, as recently reported, even Americans’ life expectancy is falling.

Reasonable responses are to restore higher taxes on the rich, and to return controls on corporations.

That leads to the third reason for the season’s reflection on the situation and our actions: the Accountable Capitalism Act, introduced in August by U.S. Sen. Elizabeth Warren (D-Mass.). As I previously wrote, her bill takes a step toward reviving the economic standing of working and middle-class families by changing corporations from entities focusing on maximizing shareholder value to enterprises operating to benefit all corporate stakeholders – stockholders, workers, vendors, customers and communities.

Warren’s key reforms would move big corporations’ charters from states to the federal level, where charters could be revoked; prohibit political expenditures by corporations unless 75 percent of boards of directors and shareholders approve; and require corporations to have 40 percent of their boards elected by employees (like Germany, where company boards must include half owner representatives and half worker representatives).

“There’s a fundamental problem with our economy,” Warren said. “For decades, American workers have helped create record corporate profits but have seen their wages hardly budge. To fix this problem, we need to end the harmful corporate obsession with maximizing shareholder returns at all costs, which has sucked trillions of dollars away from workers and necessary long-term investments.”

The nation needs an economy where business once more invests in workers and communities.

This Advent, it’s time to prepare to punish or praise businesses and business leaders who are “naughty or nice,” and to organize to ensure the country learns from the holiday and the reason for the season.