February 21, 2019
The Wall Street Journal
Plan to Save Capitalism Exists!
In “Republicans Need to Save Capitalism” WSJ February 16/17, Peggy Noonan states “We need a cleaned-up capitalism, not a weary, sighing, acceptance-of-man’s-fallen- nature capitalism.” It already exists!
Enthusiastically supported by Paul Ryan, Bernie Sanders and Ronald Reagan, to name just a few, this bipartisan plan has operated with incredible success over a 40 year plus period. Companies that have implemented it have created more jobs in good times, survived better in bad times, while creating millions of new capitalists. Decades of independent research from prestige institutions such as Rutgers University have documented the success of the plan in multiple ways. Fourteen million employee owners will attest to it.
The plan is the Employee Stock Ownership Plan (ESOP). About 90% of ESOPs are in privately-held companies. ESOPs build significant wealth for employee owners without requiring ANY investment on their part, and the benefits are in addition to existing pay and benefits, with very few exceptions.
But for ESOPs to truly live up to their potential as envisioned by the father of the ESOP, Louis Kelso, the leadership in both parties needs to come together again and implement sweeping changes.
- Excessive bureaucratic red tape which has made the ESOP unaffordable for thousands of U.S. companies needs to be cut.
- Accounting rules that make it untenable for publicly-traded companies to implement the ESOP must be changed.
- Pending bipartisan pro-ESOP legislation in Congress needs to be dramatically expended to end discrimination against minority-owned and veteran-owned businesses, and rollback an excessive tax levied on ESOP employee owners.
- Legal reforms must be made to protect employee owners.
As former Congressman Bill Frenzel was fond of saying “if capitalism is so great, then we need more capitalists!”