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In the UK, the Institute of Directors is recommending that the government adopt a requirement for "a binding shareholder vote on remuneration policy ...." <SARCASM>What a good idea. After all, the nonbinding say on pay rules have worked so well.</SARCASM>
From my book Corporate Governance after the Financial Crisis
Professor Jeffrey Gordon argues that the U.K. experience with say on pay makes a mandatory vote a “dubious choice.”[1] First, because individualized review of compensation schemes at the 10,000-odd U.S. reporting companies will be prohibitively expensive, activist institutional investors will probably insist on a narrow range of compensation programs that will force companies into something close to a one size fits all model. Second, because many institutional investors rely on proxy advisory firms, a very small number of gatekeepers will wield undue influence over compensation. This likely outcome seriously undercuts the case for say on pay. Proponents of say on pay claim it will help make management more accountable, but they ignore the probability that say on pay really will shift power from boards of directors not to shareholders but to advisory firms like RiskMetrics. There is good reason to think that boards are more accountable than those firms. “The most important proxy advisor, RiskMetrics, already faces conflict issues in its dual role of both advising and rating firms on corporate governance that will be greatly magnified when it begins to rate firms on their compensation plans.”[2] Ironically, the only constraint on RiskMetrics’ conflict is the market—i.e., the possibility that they will lose credibility and therefore customers—the very force most shareholder power proponents claim does not work when it comes to holding management accountable.
Peter Schweizer's Throw Them All Out
One of the biggest scandals in American politics is waiting to explode: the full story of the inside game in Washington shows how the permanent political class enriches itself at the expense of the rest of us. Insider trading is illegal on Wall Street, yet it is routine among members of Congress. Normal individuals cannot get in on IPOs at the asking price, but politicians do so routinely. The Obama administration has been able to funnel hundreds of millions of dollars to its supporters, ensuring yet more campaign donations. An entire class of investors now makes all of its profits based on influence and access in Washington. Peter Schweizer has doggedly researched through mountains of financial records, tracking complicated deals and stock trades back to the timing of briefings, votes on bills, and every other point of leverage for politicians in Washington. The result is a manifesto for revolution: the Permanent Political Class must go.
It's an incredibly appalling expose of the pervasive corruption on both sides of the aisle in Washington. If you don't come away from it both disheartened and furious, you were not paying attention.
Mary Dudziak posts on the growing concentration of military service within certain segments of the population:
"A smaller share of Americans currently serve in the U.S. Armed Forces than at any time since the peace-time era between World Wars I and II," according to a new report from the Pew Research Center (hat tip New York Times).
During the past decade, as the military has been engaged in the longest period of sustained conflict in the nation’s history, just one-half of one percent of American adults has served on active duty at any given time.1 As the size of the military shrinks, the connections between military personnel and the broader civilian population appear to be growing more distant.
The data reveals is "a large generation gap." According to the report, "more than three-quarters (77%) of adults ages 50 and older said they had an immediate family member –a spouse, parent, sibling or child – who had served in the military." In contrast, for people under 50, "57% of those ages 30-49 say they have an immediate family member who served. And among those ages 18-29, the share is only one-third."
Military service is now more concentrated in certain families: "Veterans are more than twice as likely as members of the general public to say they have a son or daughter who has served (21% vs. 9%)." And overall, what the report calls a "military-civilian gap" is more pronounced among younger people.
Dudziak worries about the political consequences of this growing gap:
The more distant and isolated Americans are from their nation's wars, the less they are politically engaged with American war policy.
Legal scholars argue on this blog and elsewhere that the tendency of presidents to initiate military action without congressional authorization can only be reined in if Congress insists on playing its constitutional role. But Congress will never play a more meaningful role in American war politics if the people aren't engaged. The Pew Report helps us to see what appears to be a growing distance from the costs of war, potentially reinforcing contemporary political disengagement.In my new book, War Time: An Idea, its History, its Consequences
, ... I argue that keeping the war powers in check requires a politics of war, and that requires a citizenry attentive to the exercise of military power. Our ideas about "wartime" play a role in the current disconnect, as a cultural framing of wartimes as discrete and temporary occasions, destined to give way to a state of normality, undermines democratic vigilance over on-going wars.
As Americans become more isolated from the costs of war, military engagement no longer seems to require the support of the American people. Their disengagement does not limit the reach of American military action, but enables its expansion.
As regular readers know, I'm an Army brat and have a life-long interest in military history. (One of these days I've got to figure out how to do military history in my day job. Suggestions?) As I read Dudziak's post, I was immediately reminded of Byron Farwell's wonderful book Queen Victoria's Little Wars
From 1837 to 1901, in Asia, China, Canada, Africa, and elsewhere, military expedition were constantly being undertaken to protect resident Britons or British interests, to extend a frontier, to repel an attack, avenge an insult, or suppress a mutiny or rebellion. Continuous warfare became an accepted way of life in the Victorian era ....
Although Farwell is mainly concerned with military history and biography, there are some interesting historical lessons that echo Dudziak's concerns:
Victorian England "developed a sound military caste, a narrow, closed society with its own values and standards of conduct." (xviii) The Pew study data suggests we're headed in that direction.
The British public paid almost no attention to the pervasive little wars: "Even at the time, punitive excursions, field forces, and minor expeditions were so commonplace that most Britons never knew of them." (200) As Dudziak observes, public disengagement led to a lack of political oversight. It's instructive, for example, that there is no entry for Parliament or House of Commons in the very extensive index for Farwell's book. Even more striking, Farwell relates that "no one below the prime minister controlled the Empire's army, and even his ability to direct it was doubtful ...." (xviii) The latter half of that aspect of Victorian-era military-political relations may not (yet) hold true in the USA, but Obama's Libyan adventure forcefully illustrates -- as did many Bush and Clinton adventures before it -- the ability of a modern President to send our forces to war without much in the way of Congressional oversight.
Just as the Afghans frustrated the Soviets, they did the same to the Victorian British.
While always protesting friendship, the British repeatedly invaded [Afghanistan] and shot at its inhabitants. Always unable to subdue the proud, fiercely independent Afghans, [they kept trying for fear Russia or Persia would]. (4-5)
[The campaign of 1880] proved once more that the British could defeat the Afghans in open battle but they could not hold the country. (216)
... the Afghans had a disconcerting habit of not knowing when they were defeated... (201)
So it's not very surprising that we've struggled with the Afghans too.
In sum, history seems to be repeating itself. The USA increasingly wages continuous warfare with decreasing political checks on Presidential power. It's like we've become a country of neo-Victorians.
Finally, it's worth noting that Farwell closes with a quote from Lord Wolseley that seems to be drawing ever closer to coming true:
The Chinese, he said, “are the most remarkable race on earth and I have always thought, and still believe them to be,the coming rulers of the world. They only want a Chinese Peter The Great or Napoleon to make them so…..and in my idle speculation upon this world’s future I have long selected them as the combatants on one side of the great battle of Armageddon, the people of the United States of America being their opponents.
Whenever I read that quote, I can't help but recall that the era of Britain's little wars ended with the catastrophe of World War I.
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