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DEMOCRACY is in decline around the world, according to Freedom House, a think-tank. Only 45% of countries are considered free today, and their number is slipping. Liberty is in retreat in the world of business, too. The idea that firms should be controlled by diverse shareholders who exercise one vote per share is increasingly viewed as redundant or even dangerous.

Consider the initial public offering (IPO) of Silicon Valleys latest social-media star, Snap. It plans to raise $3-4bn and secure a valuation of $20bn-25bn. The securities being sold have no voting rights, so all the power will stay with Evan Spiegel and Bobby Murphy, its co-founders. Snaps IPO has echoes of that of Alibaba, a Chinese internet giant. It listed itself in New York in 2014, in the worlds largest-ever IPO, raising $25bn. It is worth $252bn today and is controlled by an opaque partnership using legal vehicles in the Cayman Islands. Its ordinary shareholders are supine.

Optimists may dismiss the two IPOs as isolated events, but there is a deeper trend towards autocracy. Eight of the worlds 20 most valuable firms are not controlled by outside shareholders. They include Samsung, Berkshire Hathaway, ICBC (a Chinese bank) and Google. Available figures show that about 30% of the aggregate value of the worlds stockmarkets is governed undemocratically, because voting rights are curtailed, because core shareholders have de facto control, or because the shares belong to passively managed funds that have little incentive to vote.

Cheerleaders for corporate governance, particularly in America, often paint a rosy picture. They point out that fewer bosses are keeping control through legal skulduggery, such as poison pills that prevent takeovers. Unfortunately, these gains have been overwhelmed by three bigger trends. The first is that technology firms can dictate terms to infatuated investors. Young and with a limited need for outside capital, many have come of age when growth is scarce. Google floated in 2004 with a dual voting structure expressly designed to ensure that outside investors would have little ability to influence its strategic decisions. Facebook listed in 2012 with a similar structure and in 2016 said that it would issue new non-voting shares. Alibaba listed in New York after Hong Kongs stock exchange refused to countenance its peculiar arrangements. Undaunted, American investors piled in.

At the same time there has been a drift away from the model of dispersed ownership in emerging economies, with 60% of the typical bourse being closely held by families or governments, up from 50% before the global financial crisis, according to the IMF. One reason has been lots of IPOs of state-backed firms in which the relevant government retains a controlling stake. Hank Paulson, a former boss of Goldman Sachs, helped design many of Chinas privatisations in the early 2000s. The Chinese could not surrender control, his memoirs recall. Mr Paulson hoped that the government would eventually take a back seat, but that has not happened. Other emerging economies, including Brazil and Russia, copied the Chinese strategy of partial privatisation. And across the emerging world, tightly held family firms, such as Tata in India and Samsung in South Korea, are bigger than ever.

Voter apathy is the third trend, owing to the rise of low-cost index funds that track the market. Passive funds offer a good deal for savers, but their lean overheads mean that they dont have the skills or resources to involve themselves in lots of firms affairs. Such funds now own 13% of Americas stockmarket, up from 9% in 2013, and are growing fast. A slug of the shareholder register of most listed firms is now comprised of professional snoozers.

For many in business the decay of shareholder democracy is irrelevant. After all, they argue, investors own lots of other securitiesbonds, options, swaps and warrantsthat dont have any voting rights and it doesnt seem to matter. At well-run firms such as Berkshire, shares with different voting rights trade at similar prices, suggesting those rights are not worth much. Some managers go further and argue that less shareholder democracy is good, because voters are myopic. Last year Mark Zuckerberg, Facebooks boss, pointed out that with a normal structure the firm would have been forced to sell out to Yahoo in 2006.

It doesnt take a billionaire to poke holes in this logic. For economies, toothless shareholders are damaging. In China and Japan firms allocate capital badly because they are not answerable to outside owners, and earn returns on equity of 8-9%. A study in 2016 by Sanford C. Bernstein, a research firm, got Wall Streets attention by calling passive investing the silent road to serfdom. Without active ownership, it said, capitalism would break down.

Democratic deficit

At the firm level, voting rights are critical during takeovers, or if performance slips. At Viacom, a media firm with dual-class shares, which ran MTV in its heyday but which has stagnated for the past decade, outside investors are helpless. Control sits with the patriarch, Sumner Redstone, aged 93, who has 80% of its votes but only 10% of its shares. Yahoo (once as sexy as Snap) has lost its way, too. But because it has only one class of shares, outsider investors have been able to step in and, using their voting power, force the firm to break itself up and return cash to its owners.

The system may be partially self-correcting. Some passive managers, such as BlackRock, are stepping up their engagement with companies. If index funds get too big, shares will be mispriced, creating opportunities for active managers. If shares without votes are sold for inflated prices, their owners will eventually be burned, and wont buy them again. And if fashionable young firms miss targets, they will need more cash and will get it on worse terms. But in the end shareholder democracy depends on investors asserting their right to vote in return for providing capital to risky firms. If they dont bother, shareholder democracy will continue to decline. That is something to think about as fund managers queue up for Snaps IPO.

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Shareholder democracy is ailing | The Economist - The Economist

The first few days Donald Trumps presidency have seen what may be the beginning of the end of the Affordable Care Act, an average annual hike of $500 for middle-class homeowners mortgage insurance premiums, a hint at a re-invasion of Iraq and a shift in the Department of Justices effort to protect voting rights.

Yet, the overwhelming cloud that hangs over the Trump administration is the suggestion of Russian interference in the election. Investigators from six different U.S. intelligence and law enforcement agencies have been examining possible links between Russian officials and Trumps presidential campaign.

This cloud hangs not only over Trumps presidency, but over American democracy itself. Preservation of the integrity of our democratic process depends upon the aggressive pursuit of the truth and the full cooperation of Trump and his advisers in that pursuit.

Media reports indicate that investigations into Trumps Russian ties began as far back as last spring before the FBI received the notorious dossier alleging that Russian operatives held compromising information about Trump, and that there was a continuing exchange of information between the Russian government and Trump associates.

Any concrete evidence in support of these allegations would be damaging to Trumps presidency. And failure to investigate them would be even more damaging to the nation itself.

Democracy, while a founding principle of the United States, has been a work in progress from the days when only white, male and in some states, Protestant Christian property owners were permitted to vote. Gradually, over two centuries, the franchise was extended to non-landowners, Native Americans, women, and people of color.

We still are engaged in the business of expanding and protecting our democracy, fighting back racially-motivated voter suppression laws and contending with the anti-democratic effects of the Electoral College. Our goal must be a full and true democracy, where every citizen has an equal opportunity to be heard, without the corrupting influence of foreign agents working against American interests.

If a foreign government interfered to boost one candidate chances, its not merely an affront to the losing candidate; its an affront to every single honest, voting citizen. Its an affront to American democracy.

Because Trump was elevated to office by the anachronistic Electoral College counter to the choice of a majority of voters he owes the American people an exceptional level of deference. He should go to every length to demonstrate that his own conduct, at least, was above-board and beyond reproach. Any attempt to stonewall an investigation should be viewed with the utmost skepticism.

His public statements on Russia and its president, Vladimir Putin, have been contradictory at the very least. In 2013, 2014 and 2015, he said he had a relationship with Putin, had spoken with him and had gotten to know him. In the third presidential debate, he said he had never met him. In the second debate, he said he had no dealings with Russia and no businesses there.

But his son, Donald Trump Jr., said in 2008 that Russians make up a pretty disproportionate cross-section of a lot of our assets. This confusion should raise serious questions.

President Trump appears to be engaged in a campaign of disinformation about his election claiming without evidence that he was denied a popular victory by millions of illegal votes. His apparent obsession extends to making repeated false statements about attendance at his inauguration. His preoccupation could complicate our intelligence agencies attempts to ferret out the truth. Its our hope that he will see that any failure to cooperate or to encourage a full investigation would be crippling to the nation.

During the Inauguration Ceremony on Jan. 20, much was made about the peaceful transfer of power that is and should be an example for the world. But that peaceful transition depends upon the strict balance of powers as outlined in the Constitution. Its up to our legislative and judicial branches to serve as a check on the executive, beginning with the investigation into foreign influence.

Marc H. Morial is the CEO of the National Urban League.

Original post:
A gray cloud hangs over American democracy - The Philadelphia Tribune

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Francis Fukuyama, an acclaimed American political philosopher, entered the globalimagination at the end of the Cold Warwhen he prophesied the "end of history" abeliefthat, after the fall of communism, free-market liberal democracy had won out and would become the world's "final form of human government."Now, at a moment when liberal democracy seems to be in crisis across the West, Fukuyama, too, wonders about itsfuture.

"Twenty five years ago, I didn't have a sense or a theory about how democracies can go backward," said Fukuyama in a phone interview. "And I think they clearly can."

Fukuyama's initial argument (which I've greatlyover-simplified) framed the international zeitgeist for the past two decades. Globalization was the vehicle by which liberalism would spread across the globe. The rule of law and institutions would supplant power politics and tribal divisions. Supranational bodieslike the European Union seemed to embody thoseideals.

But if the havoc of the Great Recessionand the growing cloutof authoritarian states like China and Russiahadn't already upset the story, Brexit and the election of President Trumplast year certainly did.

Now the backlash of right-wing nationalism on both sides of the Atlantic is in full swing. This week, French far-right leader Marine Le Pen announced hercandidacy for president with a scathing attack on the liberal status quo. "Our leaders chose globalization, which they wanted to be a happy thing. It turned out to be a horrible thing," Le Penthundered.

Fukuyama recognizes the crisis. "Globalization really does seem to produce these internal tensions within democracies that these institutions havesome trouble reconciling," he said. Combinedwith grievances over immigration and multiculturalism, it created room for the "demagogic populism" that catapulted Trump into the White House. That has Fukuyama deeplyconcerned.

"I have honestly never encountered anyone in political life who I thought had aless suitable personality to be president," Fukuyama said of the new president. "Trump is so thin-skinned and insecure that he takes any kind of criticism or attack personally and then hits back."

Fukuyama, like many other observers, worries about"a slow erosion of institutions" and a weakening of democratic norms under a president who seems willing to question the legitimacy ofanything that may stand in his way whether it's the judiciary, his political opponents or the mainstream media.

But the problem isn't just Trump and the polarization he stokes, argues Fukuyama.What the scholar finds "most troubling" on the American political scene is the extent to which the Republican Party has gerrymandered districts and established what amounts tode facto one-party rule in parts of the country.

"If you've tilted the playing field in the electoral system that it doesn't allow you to boot parties out of power, then you've got a real problem," said Fukuyama. "The Republicans have been at this for quite a while already and it's going to accelerate in these four years."

"When democracies start turning on themselves and undermining their own legitimacy, then you're in much more serious trouble," he said.

International institutions don't seem to be faring any better.Fukuyama thinks the European Unionis "definitely unraveling" due to a series of overlapping mistakes. The creation of the eurozone "was a disaster" and the continued inability to develop a collective policy on immigration has deepened discontent. Moreover, said Fukuyama,"there really was never any investment in building a shared sense of European identity.

But while the West is lurching through a period of profound uncertainty, Fukuyama calls forpatience, not panic.

"We don't know how it's all going to play out," he said. The tide of right-wing nationalism may ebb if the results of major elections this year go against the Le Pens of the world. Fukuyama wonders whether Trump will eventually face a backlashfrom within his own party, particularly if he cozies up to an autocrat like Russian President Vladimir Putin.

"The Austrian election was actually interesting," he said, referring to a presidential vote in whicha far-right candidate narrowly lost last year. "It was as if people in Europe said, 'Well, we dont want be like these crude Americans and elect an idiot like Donald Trump.'"

The turbulence of the moment doesn't have to be read as a rebuttal of his original thesis. The "end of history" was always more about ideas thanevents. For that reason, Fukuyama's most vehement critics over the years were not right-wing nationalists but thinkerson the left who reject the dogma offree markets. Fukuyama himself always left the door open for future uncertainty and crisis.

"Perhaps this very prospect of centuries of boredom at the end of history," he wrote more than two decades ago, "will serve to get history started once again."

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The man who declared the 'end of history' fears for democracy's future - Washington Post

At this moment, I am on assignment in Europe, a continent that, like America, seems more screwed-up with every visit. To escape the insanity that threatens to engulf us all, this morning I decided to work remotely from a small French town. Hammering away on my laptop, I sat down to enjoy a nice breakfast in a quaint little caf. The coffee was good. So were the bacon and eggs. Fearing I would miss a critical news event you know, like, say, the ransacking of a California university by students deeply concerned with the ideals of democracy I put in my earbuds and listened to BBC Radio.

This was a mistake.

The brief tranquility of my world was punctured and my coffee made bitter by an interview with a man who warned of a populist Trumpian fascism in Britain and America. Yes, a new Hitler, he said, threatened the free world. This is a frequent refrain. Ashley Judd shouted it on the Washington Mall. Social media is bristling with the same. And pundits both here and in America love to say it. That narrative, however dear to the Left it may be, is ignorant and bears no semblance to the modern geopolitical reality in the Western world.

A little political primer for the uninitiated:

Strictly speaking, fascism sees the clash of civilizations as a war between races of people. It is about the blood. Private property and capitalism are permitted, but it is for purposes designated by the state. Fascism is an extreme expression of the Right. Hitlers Germany, Mussolinis Italy, and Francos Spain were all fascist regimes.

They killed millions of people.

Strictly speaking, socialism sees the clash of civilizations as a war between classes of people. It is about impersonal economic forces. Private property is not recognized, capitalism is a great evil, and the state owns the means of production. Socialisms highest stage of development is called communism. (It has never been achieved, but that is a discussion for another time.) Socialism is an extreme expression of the Left. Stalins Soviet Union, Maos China, and Kim Jong-uns North Korea were/are all socialist states.

They killed millions of people.

Fascism and socialism are historicist theories. That is, in these systems, history is governed by predetermined laws; not man and certainly not God. Indeed, both have a great antipathy for God and seek to substitute the state and its pantheon of leaders for authentic worship. After all, salvation, they believe, is found in the state alone.

Fascism enjoys no mainstream support in Britain or America. This has not deterred opponents of Donald Trump from calling him and his supporters fascists and Nazis. I did not vote for Trump I damn sure didnt vote for Hillary but I must defend the man on this point. To use such labels is outrageous and utterly fails to understand what those words mean. And to use them in this context is to lose all credibility.

As far as I can tell, Trump is a typical Western capitalist and pragmatist. To date, his political policies stand in the mainstream of American presidential tradition in a way that Obamas did not. There is nothing particularly radical or fascist about strict immigration requirements, the protection of U.S. interests and sovereignty, or a wariness of an oppressive, violent socio-political structure like Islam whose core principles are antithetical to Western ideals. Moreover, Trump is no ideologue as Obama and Bernie Sanders certainly are.

No, it is not fascism that threatens the West; it is an anarchy fueled by leftist ideology incubated in our universities, promoted by a willing media, and regurgitated by Hollywood. Furthermore, in trying to redefine what constitutes Americas political center, the Left has sought to give the impression that they embody it.

Dont fall for it.

You must bear in mind the kinds of behaviors these people want to mainstream: not only the killing of unborn children, but the celebration of it in the manner of an ISIS execution video; gay marriage and its transgender corollary; the full embrace of Islam, the greatest global threat to free peoples since Stalinist Russia and Nazi Germany (i.e., authentic fascists); and now, as if this were not enough, some on the Left are suggesting the overthrow of the government.

Im not talking about the ubiquitous suggestion that the Electoral College be abolished. The comment to which I refer comes from former Obama Administration policy advisor Rosa Brooks. In an article for Foreign Policy titled 3 Ways to Get Rid of President Trump Before 2020, Brooks, who repeatedly questions Trumps sanity, suggests a military coup. This was not the stuff of clever political satire. She meant it. Whats next? Suggesting that someone blow up the White House? (Oh, wait. Scratch that.)

This kind of talk, which has become commonplace in recent weeks, is alarming and dangerous whether it comes from the Left or the Right. It is the kind of talk that erodes the Rule of Law and encourages the civil unrest we witnessed at Berkeley in recent days. But neither this talk nor the anarchy in our streets is the result of fascism, Trumpian or otherwise. Ferguson and Dallas occurred on Obamas watch and were not funded with money from the Koch Brothers or Chick-fil-A. No, these are all manifestations of the political Left.

Is our democracy imperiled? Undoubtedly. Look Left.

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Leftist Anarchy, Not Trumpian Fascism, Is the Real Threat to Democracy - American Spectator

A refugee is someone who seeks refuge in another country than their own because of legitimate fear of persecution, capture and imprisonment, torture and/or death based on their religion, gender, race, ethnicity or political beliefs.

We are a country of immigrants, and many of our forebears were refugees escaping religious or political persecution, as well as a new way of life to escape poverty.

Pilgrims came to Massachusetts, Catholics sought haven in Maryland, and many Jews were welcomed to Savannah by Georgia Gov. George Oglethorpe, who welcomed all religions. This is how our country was formed, but at the expense of the indigenous Indians, and with the moral blight of slaves brought into servitude from Africa.

Our history is not perfect, but it is built on welcoming immigrants from all over, which has made our country a beautiful quilt of diverse peoples and cultures.

President Donald Trumps executive order banning refugees from seven Mideastern and African countries raises many serious legal questions that will be resolved in the courts. But the even bigger question for us as Americans is whether we believe this is what America stands for. Is this who we are?

One of the inevitable effects of this order is to enable extremist jihadists to recruit members, because the U.S. is demonstrating that we hate Muslims and indicating that our two cultures can never live peaceably together.

We are jeopardizing our military who are working alongside Muslim soldiers in the Mideast who may now view the American beside them as the enemy.

Some of the banned refugees are interpreters for the American military stopped from entry to the U.S., along with their families, even though if they are returned to their countries or not allowed to leave they will likely be killed.

Yes, we want an effective vetting system, but refugees denied by this order have been fully vetted and cleared, and should be admitted to our country unless there is new information showing them to be risks.

As a country, we failed our moral duty before when we failed to allow ships full of Jews from Europe seeking refuge from the Nazis to deliver passengers to Cuba or Miami. Instead, we ordered them to return to Europe, and almost every one of them died in concentration camps in the Holocaust.

That moral stain will stay on the American conscience forever.

Let us avoid another moral stain on the honor of our country. It is simply not American to ban Muslims simply because of their faith, but to allow Christians from the same countries to be admitted.

Even more important than the First Amendment to the Constitution, which this policy violates, is our humanity, which is central to who we are.

The welcoming light of the Statue of Liberty welcomes those yearning to breathe free, not just Christians. And, for those of us who are Christians, if we really ask ourselves what would Jesus do, we have to know the answer: Do not judge and discriminate against your fellow man based on his religion.

If we dim the bright light of fairness and mercy that the Statue of Liberty has always symbolized, then it may be the first light of democracy that goes out in America. Others will follow.

Dorian is a DeLand resident.

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Linda Colvard Dorian: Don't dim the bright light of democracy - The West Volusia Beacon