Elizabeth Warren’s proposed corporate responsibility bill has several strong downsides, writes Chloe Aiello of CNBC News. Forcing businesses to alter their behavior, such as preventing them from maximizing shareholder profits, could push them to move abroad. Others might just avoid these rules and make their activity secret. Both of these options would end up hurting the US economy and local workers. Warren’s suggestions mirror socialist ideas of government regulation that aren’t very compatible with America’s brand of capitalism. It would be better for the free market to decide with consumers boycotting companies whose practices they don’t like.
Elizabeth Warren has recognized that corporations act largely in self-interest and to the detriment of workers, asserts Matthew Yglesias of Vox. Her proposed corporate responsibility bill would limit stock buy-backs, which generally benefit shareholders at cost to productivity. Companies would be made to consider the interests of their workers, customers and communities, rather than just those of CEOs and shareholders. This would spur jobs and wage growth. Warren’s idea comes after decades of shareholders dominating the actions of companies in their own interest. Most Americans feel ending their supremacy and improving workers’ conditions is needed.