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Re: Rent extraction.

This is not a PC term, but a particular type of economic abuse long-discussed in the economic literature.

Rent extraction occurs when a party in an economically advantageous position charges significantly more than the market value of goods or services he provides, simply because he can. It is not the cost of silly regulation (of which I do not approve, either) nor is it the cost of preferential treatment of certain parties because of their political connections (although I don't approve of that, either). An example of rent extraction is, however, when the management of a company pays itself multiples of their market worth regardless of performance simply because the dispersed shareholder base is incapable of preventing it. If a company has strong takeover defenses (classified board, poison pill) it may not be possible to do anything: almost all shareholder resolutions are advisory in nature, and with plurality voting, the directors will get re-elected even if they cast the only vote in their own favor.

'Ah,' you say, 'then the shareholders should sell the stock.' This isn't so easy for medium/large institutions which may have index mandates (which means they cannot sell the stock), be benchmarked to a particular set of companies of which the offender is a significant component (which might make the sale risky), or may not want to lock in a significant loss they have suffered thanks to management mistakes for which the offending managers have not been punished by being fired, but instead have rewarded themselves with the same sort of bonuses they receive every year. Then, there are the well-run companies where managers dilute the shareholders to death by constantly paying themselves with large options or stock grants. Without a change in the rules, these practices can go on and on for years.

You know, a majority of the shareholders still have to decide to vote against management, which makes it unlikely that the Marxists will have the field day that opponents of this measure predict. It beats having government-mandated pay levels or limits, or confiscatory taxation, all of which would be anti-business legislation, and which I would STRONGLY oppose.

To put it simply....The primary objective of the Republican party is to minimize government regulation and control in order to maximize profits and satisfy its inherent greed. i.e; Their philosophy is the hell with any fairness or morality for the masses. We are becoming more and more a two class society; the 10% of "haves" and the other 90% who will struggle to make a living. 10% of the population already control 67% of the nation's GDP and this trend is worsening..I do not support an "equal" distribution of wealth but rather a more "just" distribution.