The following article originally ran as the President’s Page column in the February 2015 issue of the ESOP Report, the newsletter of The ESOP Association.
More Evidence of Foundation’s Impact on National Debate
The first time I walked into a meeting of ESOP Association leaders, after spending many years around the legislative/political process in both the State of Texas and Washington, DC, I noted something different about the men’s thinking. [Sidebar: In those days, the leadership was all male.] They had two passions, not the typical one of most trade associations I had worked with prior to walking through that door to an ESOP Association governance meeting.
Yes, the men all expressed sincere, animated, interest in making sure that the laws that encouraged the creation and operation of ESOP companies remained in place or were improved. In other words, like most interest groups I had been around in my career up to that point, they were looking inward, at their own company, their own company’s bottom line, and at their own way of doing things in their company — the so called “style” or “culture” of the company they loved.
In hearing these expressions of self-interest, my thought was, “Yep, I have heard talk like this from many.”
But soon, I began to hear something different from these men; something one is more likely to hear at a cause oriented group — Common Cause, Right to Life, MoveOn, TEA Party, are examples, left and right — that the Association had to make employee ownership through the ESOP model national policy. Loved by the media; loved by the President; loved by the Congress; loved by academia; loved by think tanks, etc.
This cause orientation of the ESOP community has never gone away. As there are more ESOPs and more people experiencing the power of working and managing a well-run ESOP company, it grows bigger and more heartfelt.
This cause orientation led to the adoption of the Association’s Vision statement in 1993, and it has never really been changed. Our Vision is that the United States be a nation where a great majority of employees own stock in the companies where they work so that we have a catalyst for economic prosperity and employees can share in the wealth they help create.
Well the two orientations: work like heck to make sure ESOP tax benefits that enrich the ESOP company and the ESOP employees remain in place, and expand the benefits when possible, and spend resources and time to do outreach to the non-ESOP world, are not easily accommodated with the amount of money the Association collects each year. And believe me, if we said we were not going to pay attention to what the Congressional tax committees were doing to tax laws impacting ESOPs because our modest resources and small number of staff were too busy putting on programs convincing non-ESOP companies to be ESOPs, and paying big bucks to a national PR firm to infiltrate TV networks, major newspapers, etc. to only run positive ESOP stories, I suspect the ESOP world would dry up pretty quickly.
So, how to accomplish both passions? One, the nation is not going to love ESOPs if yours truly runs around the nation talking about how great ESOPs are; or writing positive op-ed pieces for major newspapers; or having social media postings by thousands of ESOP fans to some elected official. No, when an ESOP advocate sings the praises of ESOPs to a non-believer, that non-believer’s response is “Duh, what does one expect from a self-serving ESOP fan; honest critique when there is ample evidence of ESOP companies, small, medium, and large, going bankrupt and employees getting zero for retirement?”
Key is knowing how big national policy develops in our nation. The typical pathway is academics, and men and women working in think tank who get interested in the issue. They do papers. The papers get published. They get jobs in think tanks and universities focusing on their published papers and research. They get tenure at their schools, or move from one school to another with more prestige.
If Democrats, when a Democrat becomes President, some are hired to work in the bowels of Treasury, Office of Management and Budget, or even on the direct White House staff, say the Council of Economic Advisors. Then their “team,” in my example, the Democrats lose, and the Republican team takes over and hires new people for jobs those Democrats had. Then in four, eight, twelve, sixteen years later, the Democrats win, and those young men and women who worked in these policy jobs years earlier, now come back at higher levels.
For example, many of the top advisors in the Obama Administration worked in the Clinton Administration at levels lower than what they have now.
For example, many of the top advisors to President George W. Bush’s Administration worked in his father’s, or the Reagan Administration in lower level jobs.
Where I am I headed with this commentary?
And what does the Employee Ownership Foundation have to do with it?
Well recently, the leftist think tank the Center for American Progress (CAP) had a summit, led by big name economic policy advisors. Summit leaders were a former Secretary of Treasury under President Clinton, and who was also a major advisor to President Obama in his first term; and a high official of the British government, Larry Summers and Ed Balls respectfully. The other fifteen summiteers developing recommendations to improve the economy mainly in the US were former Democratic governors, top newspaper commentators, economic advisors to President Clinton, and the list can go on.
What did the group recommend in their final report? Broad-based ownership, and mentioned ESOPs specifically as a policy to increase broad-based ownership.
Big news because as a general rule, the so-called left has not touted employee ownership, except in rare instances by someone such as Senator Sanders of Vermont; but now it is front and center, among a liberal leaning think tank’s set of recommendations.
And by the way, the former head of the Office of Management and Budget under President Obama, Peter Orszag, published for Bloomberg an article on January 20 saying that President Obama should push to expand employee ownership, citing the book, The Citizen’s Share, by Rutgers Professors Blasi and Kruse, and Harvard professor Freeman.
What did the Employee Ownership Foundation have to do with these actions by big thought leaders endorsing more employee ownership? The Foundation did not have anything to do with the CAP summit; the Foundation had no role in any writing of The Citizen’s Share; no one in the Foundation ever said anything to Dr. Orszag.
But people at CAP in working slots that develop materials for men and women who made decisions at the summit have liaised with the Rutgers program which the Foundation supports, among others, with over $75,000 a year; The Citizen’s Share set forth findings, among many, that in some instances were developed with grants from the Foundation, such as grants to the National Center for Opinion Research’s quadrennial General Social Survey.
Public policy is not embedded in a nation by one magic moment. Reaching goal B is often not a straight line from A. Major changes in policy often take zig-zag routes over a long period.
But what was put forth by the CAP summit, and what Dr. Orszag said in that Bloomberg article had in a way, be it minor or major, outcomes for which the Foundation and its supporters can say, “Progress is being made in our journey to make our Vision real — and we, our Foundation, played a role.”
We have shared this video before but thought it was a fitting end to this column…