Monday, May 20, 2013

The Significance of the JP Morgan Fight

For the past 100 years, small investors and lower income Americans have been able to invest in public securities and make huge gains.  No one with a diversified portfolio of American stocks today has a loss.  More remarkable, anyone who has held on for twenty years or more has huge, huge gains.  And this same statement is true for nearly all twenty year periods since the 1930s (eighty years ago).

The success of the public markets has provided a way for folks without access to financial acumen to take on capital risk and be successful.  You would think such markets would be applauded.

Nope.

Here comes the left.  First Sarbanes-Oxley was passed to make sure that small companies faces huge hurdles in taking their firms public.  Then along came Dodd-Frank, a creature of the Obama Congress, that continued the process of crushing public companies with mounds of mind-boggling regulations.

The final coup d'etat is now underway in the JP Morgan struggle.  If "shareholders" force JM Dimon out as Chairman of the Board of one of the most successful companies in world history (a company that has greatly enriched its shareholders), the public will pay the ultimate price.

And, who are these "shareholders" that would topple Dimon?  They are the 'agents' who, in theory, represent shareholders -- trustees who run endowments, pension funds, foundations.  The vast majority of these folks don't like free markets and seem upset by the prospect of lower middle income folks having a path to wealth through the public markets.

The real shareholders are workers and taxpayers who directly and indirectly provide the funding for these endowments, pensions funds and foundations.  They have no say at all.  They certainly wouldn't vote to lower their future retirement income, which is precisely the direction their trustees are pursuing.  In the name of 'corporate governance reform,' these trustees are destroying the access that ordinary citizens have to public markets.

So, topple Dimon and crush public companies and bend them to your will.  That is the plan of the leftists who dominate pension funds, endowments and foundations these days,   That ordinary Americans and real shareholders will have to pay the price for this nonsense is the great tragedy.

Ultimately, if the public market can be crushed, ordinary Americans will be forced to look to the government for their retirement, assuming the government has anything left at that point. 

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