When The Wall Street Journal Is Publicly Opposed to Proxy Votes on Universal Health Care Proposals You Know That You Are On The Right Track

Let’s push the pedal to the metal on Proxy  Votes supporting Universal Health Care Proposals. Why? Because the Wall  Street Journal, the mother of the insurance industry, Publicly Opposes this  initiative. If they vehemently oppose it then logic would have it that it is  an effective methodology for health care financing reform. This is strategy  is known as “reverse logic” and it has been used by the health insurers/HMOs  on us for years?

In order to achieve Universal Health Care and  Health Care Financing Reform you must focus on the Health Insurance  Industries most vulnerable pressure point – the Investor Community.

The  Wall Street Journal

REVIEW &  OUTLOOK

Politics by  Proxy
June 4, 2008

It’s  corporate proxy season, and as usual the shareholder activists are out to  make a splash. But this year there’s an important twist: The Securities and  Exchange Commission is helping them.

Unions have been trying for  years to force businesses to put their health-care policies on the  shareholder ballot. In the past, the SEC has objected by citing its  “ordinary business” rule, which says that shareholder votes are not the  place for establishing or changing a company’s business strategy or  compensation.

So this year the labor activists changed tack: They  asked for proxy space on the “principle” of universal health care. The idea  is that voting on general principles isn’t shareholder micromanagement and  so would evade SEC strictures. How universal health care would enhance  shareholder value is at best unclear, however. And in fact these proposals  are not about investment returns. They are about browbeating corporate  America into endorsing the union health-care agenda.

And sure enough,  the proposals at Boeing, General Motors, United Technologies and others were  essentially identical. They state that health care should be “universal,”  “continuous,” “affordable,” “sustainable” – these days, everything has to be  “sustainable” – and, well, “promote well-being.” None of this has anything  to do with running a company, but it is designed to echo through national  political debates and get business on record as supporting “universal”  (read: government) health insurance.

This should have been reason  enough for the SEC to throw the proposals out. Yet at every company where  they were offered, the SEC approved them. Our guess is that the staff is  blowing with the political winds and bowing to pressure from Democrats on  Capitol Hill. We’re also told the staff also proceeded on its own, without  the approval of SEC Commissioners. If that’s true, this is an abuse of  discretion by the staff, or an abdication by the Commissioners, or  both.

“If the staff did this without the commission’s knowledge,  that’s a commission run amok and that’s dead wrong,” former SEC Chairman  Arthur Levitt told us, adding: “It’s absolutely inappropriate.” And he  supports the proposals. The companies also deserve some blame, since  none of them tried to ditch the proposals for being trivial or  irrelevant.

This is a signal of what is likely to happen in far more  aggressive fashion if the SEC ever agrees to make proxy access easier, as  unions and Democrats on Capitol Hill are lobbying it to do. Instead of  focusing on business returns, the annual proxy will become another forum for  political debates and lobbying. Those debates, in turn, would take valuable  director time away from supervising management on key business issues – such  as compensation.

This year, the SEC reviewed 14 of these health-care  proposals. Given their success, we can expect more of them next spring.  Since the SEC staff is determined to play dumb about their political  purpose, the Commissioners will have to exercise some adult supervision to  prevent further politicization of shareholder proxies.

See all of  today’s editorials and op-eds, plus video commentary, on Opinion Journal.

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You’re currently reading “When The Wall Street Journal Is Publicly Opposed to Proxy Votes on Universal Health Care Proposals You Know That You Are On The Right Track,” an entry on The Policy Center

Published:
June 4, 2008 / 10:07 pm
Category:
Congressional Legislation, Employer Health Benefits, Health Ins. Markets, Medicare Advantage Plans, National HC Reform Initiatives, State Reform
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