Who Votes the Stock ?

President Bush proposes privatizing part of Social Security to provide each worker with a personal account composed of "conservative" stocks and bonds. A new proposal would entirely replace Social Security (at least the retirement portion) with government funded private accounts. The government would make $2000 annual deposits in each citizen's account from birth to age 18 and these funds would likewise be invested in "conservative" stocks and bonds.

Setting aside for the moment all the questions about fees and potential corruption (either or both of which have plagued the British and Chilean privatized systems), I would like to focus on the question of who votes the tens of billions of dollars of stock that will be held in these accounts.

The question is not idle. In the past, e.g., during the anti-Apartheid campaign, and in the future, as labor unions and others realize the potential power represented by the stocks held in their own pension funds, corporations will be presented with shareholder resolutions demanding better social behavior from the company. Better envirnmental policies, better labor standards in Third World factories, less support for repressive regimes like Burma (and even China ?).

When these questions come to a vote, who votes the billions of shares held in the "private" accounts created by the Bush and other proposals ?

Given the "ownership society" rhetoric of the Bush Administration one would expect that the individual "owners" would enjoy this privilege. National campaigns could then be run by both sides seeking the votes of all of these individuals. But they would also have to be sent voting materials (called "proxy materials") by the affected company and surely there would be a grievous cry from the richly rewarded fund managers about the burden and expense of providing materials to all these new owner/voters.

Since the "ownership" of these accounts will apparently be seriously diluted at the outset ( you will not, for instance, choose the investments in "your" account), perhaps it will be suggested that the benevolent fund managers who are making "conservative" investments in your name should be authorized to vote the shares in "your best interest". Better yet, why not let Congress vote the shares ? Corporate interests have already bought and paid for them.

While this detail, like every other detail, of the Bush proposal remains shrouded in mystery, I cannot believe that the Ultra Elite redpresented by the Bush folks have not given this matter some thought and have formed some very definite ideas about where this voting power should lie.

Admittedly, this whole discussion may be a "bridge too far" in that the entire private account scheme appears to be collapsing at the starting gate. I, however, have sold the Bush Administration short too often to be complacent about the final outcome and think it best to begin thinking about next steps now.