Review: The Battle for the Soul of Capitalism

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5.0 out of 5 starsNobel Prize Material–Final Review
December 13, 2007
John Bogle

This book is a work of genius and integrity, with the potential to catalyze Wall Street into fulfilling the promise of moral capitalism and community ownership.

Here are some highlights from my flyleaf notes:

+ America is no longer an ownership society–financial intermediaries “own” everyting and the individual owners are passive

+ We can find the wisdom and will to restore moral capitalism

+ Earnings have been manipulated and misrepresented.

+ Executive compensation plus lax accounting and the fiction of quarterly earnings versus actual cash flow have hollowed industry out.

+ Profound conflict of interest exist across all fronts

+ Fund managers have siphoned off one fifth of the gross value of the funds.

+ Our business world chose the wrong bottom line, and ignored the importance of sustaining human, social, and community capital

+ Stock options aqre out of control.

Seven specific Conference Board suggestions:

1) Corporate citizenship

2) Separate ownership from management

3) Fix the stock option mess

4) Pay on performance not peers

5) Return to long-term focus

6) Let sunlight shine on accounting

7) New mindset for Board (aggresive stewardship)

Page 103: “Investment America went wrong, then, because in the contagious enthusiasm of the day, financial engineering and manufactured earnings became the coin of the valuation realm, accepted by corporate managers and investment managers alike. What is more, the emphasis on short-term price came to overwhelm the reality of long-term value, as investors failed to honor the distinction between investment and speculation drawn by John Maynard Keynes six decades earlier.”

In my view, this book, and three others, should comprise the Christmas reading list for all adults:
Independents Day: Awakening the American Spirit
Day of Reckoning: How Hubris, Ideology, and Greed Are Tearing America Apart
A Power Governments Cannot Suppress

I am personally committed to the non-violent legal ethical overthrow of the existing pathologically inept federal government and its politcal leaders in both Congress and the Executive who lack morality, intelligence, integrity, or conscience. Dick Cheney, not George Bush (a village idiot) is their poster child. I find it truly gratifying that a man of such financial stature as John Bogle now articulates and inspires the remorse that Wall Street must feel for running the Earth into the ground.

Below are other books I recommend as a reading list toward November, five about the bad, five about the promise:

The Bad (see my reviews):
Vice: Dick Cheney and the Hijacking of the American Presidency
The Broken Branch: How Congress Is Failing America and How to Get It Back on Track (Institutions of American Democracy)
Legacy of Ashes: The History of the CIA
Fog Facts: Searching for Truth in the Land of Spin

The Good (see my reviews):
The Politics of Fortune: A New Agenda For Business Leaders
The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits (Wharton School Publishing Paperbacks)
The Wealth of Networks: How Social Production Transforms Markets and Freedom

God Bless America. We can unite and fix this. Check out Reuniting America (Unity 08 is a fraud, the last gasp of the spoils system).

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Dec 13

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