Thursday, October 29, 2009

Reform Delayed is Reform Denied?

On August 28, 2009 dre cummings blogged on SEC proxy reform. The SEC proposed reform was revolutionary in granting broad access to shareholders of their corporation's proxy statement to nominate directors and encourage some degree of contested elections. Unfortunately, the proposal inspired powerful opposition. Most recently the SEC has delayed the vote on the reforms.

So, here is my question: doesn't delay always work in favor of entrenched interests against real reform (defined to mean a true redistribution of power)? Delay always diffuses the political energy of the moment--whether the moment is a financial crisis or a recent election. Recall that FDR struck quickly enacting a dizzying array of reforms in the famous 100 days. It may be true that Congress was poised to cooperate after four years of unrelenting economic pain.

Nevertheless, perhaps it is simply a truism that true reform comes through a blitz and any delay simply gives well-financed elites time to mobilize their resources. Time also deadens fear. And, elite fear may itself be essential to reform. Fear of communist ascendancy drove the Supreme Court in Brown to overturn Plessy. Fear of reversion to Depression caused the revolutionary GI Bill.

Thus, my fear. This delay by the SEC simply allows reform energy to dissipate and elites time to organize.

And, by inference, the time that has passed since the energizing election of Barack Obama may well suggest the the full array of reforms will atrophy.

Here's hoping I am wrong.

1 comment:

  1. Professor Ramirez:

    What do you think about the legislation announced by representative frank, in connection with the too big to fail solution?