This Article is truth to fiction of how the Corporate world views us as investors. Like Children we should keep our mouths shut and leave the money decisions to those who have more experience in stealing it from us.

-Poliblogger

Cartoon Obama-romney

Harold Meyerson: The failings of shareholder capitalism – The Washington Post.

What good are shareholders? Not much, say Jay Lorsch, a Harvard Business School professor, and Justin Fox, the editorial director of the Harvard Business Review, in whose current issue they outline the shortcomings and tally the surprisingly few benefits of shareholder capitalism.

In theory, they begin, shareholders help corporations in three ways: They provide funding through their investments; they provide information through the supposedly evaluative pricing of corporate stock; and they provide discipline by serving as a check on errant management.

In fact, Lorsch and Fox conclude, shareholders generally fail at each of these tasks.

Established corporations, they write, “finance investments out of retained earnings or borrowed money” — not shareholders’ funds. Start-ups rely on venture capital, but they’re the exception to the rule.