End the SEC’s Access Rule, Don’t Mend It

Activists love it, but it is counterproductive, has no basis in statute, and could be unconstitutional

By Joseph A. Grundfest. He is a professor emeritus at Stanford Law School. He served as an SEC commissioner, 1985-90. Excerpts:

"Investors owning as little as $2,000 of a company’s stock—about 16 billionths of the average market capitalization of an S&P 500 company—can force a vote. Average monthly rent for a New York City apartment is roughly $3,500, 75% more than the rule’s minimum. This holding requirement might be the only thing in America not suffering an affordability crisis.

Only 11% of the proposals that proceeded to a vote in the 2025 proxy season gained majority support from voting stockholders. If a proposal is approved, the corporation’s board typically declines to implement it anyway. The Access Rule thus generates toothless, performative votes.

The rule is wildly popular with governance gurus and policy advocates. It’s a free soapbox that forces management to address issues they’d rather not discuss. To buy peace, executives will often make concessions in exchange for the activists’ withdrawing their proposals. If a proposal fails, activists still demonstrate to supporters a willingness to confront the corporation. Just because a proposal is performative doesn’t mean it’s ineffective."

"The Access Rule . . . commandeers the corporate proxy to compel votes on shareholder proposals, an encroachment not authorized by federal securities law." 

Governors Who Refuse Education Dollars

Not surprisingly, they’re pandering to teachers unions

By Daniel Lipinski. Mr. Lipinski, a Democrat, represented Illinois’s Third Congressional District 2005-21. He is a fellow at the Hoover Institution and the University of Dallas. Excerpt:

"Scholarships can be granted to cover a variety of education expenses. While many will fund tuition aid, scholarship nonprofits can choose to help families pay for tutoring, education technology, special-education services and other expenses. Eligibility will be limited to households earning less than 300% of the area’s median income, but many programs will likely focus on those most in need.

Teachers unions are pressuring Democratic governors to reject this golden goose. Their virulent opposition is revealing. Extra resources are what educators say they want. So why do their unions oppose receiving them? It seems they so abhor the idea that a scholarship might help parents choose which school their child goes to that they are willing to reject support for students in their own members’ classrooms."

The Embarrassing Truth About Tariffs

Why is Trump so upset about Federal Reserve economic research into his trade policies?

WSJ editorial. Excerpts:

"American households and businesses are bearing nearly 90% of the cost of the Trump tariffs"

"Kevin Hassett, director of the National Economic Council, took to CNBC Wednesday to pan the New York Fed research as “the worst paper I’ve ever seen in the history of the Federal Reserve System” and suggested the people who wrote and published it should be “disciplined.”"

"The Fed analysis aligns with other research into the distribution of tariff costs from Harvard economists and Germany’s Kiel Institute—and with common sense. There isn’t widespread evidence that foreign producers are cutting their prices to offset the tariffs"

"Nor is the dollar strengthening, which is the other possible mechanism for making foreigners pay"

"tariffs are causing an increase in post-tariff prices of those goods that are still imported"

"Americans pay higher prices, or “pay” in the form of less choice."

"he said last year that Americans may have to buy fewer dolls for their children as a result of his trade policies"

"So far the manufacturing boom Mr. Trump promised hasn’t appeared, as manufacturing jobs are down over the last year."

"To the extent American companies eat some of the costs of tariffs, that’s less cash available for investment and hiring." 

"The market response to his April 2025 “liberation” tariffs was so negative that the President quickly withdrew them and negotiated lower tariffs"

"He has also laced the tariffs with multiple exemptions." 

State promotion of small-holder agriculture; state promotion of manufacturing; and state controls over finance, especially capital controls DID NOT cause rapid growth in four African countries

See ‘How Africa Works’ Review: Policies and Prosperity; Four African countries—Botswana, Ethiopia, Mauritius and Rwanda—experienced rapid per capita growth. How did they manage it? William Easterly reviewed the book How Africa Works: Success and Failure on the World's Last Developmental Frontier by Joe Studwell. Excerpts:

"the successful countries were, surprisingly, not very good at following his preferred policies. Botswana’s government promoted neither small-holder agriculture nor manufacturing. Mauritius and Rwanda ended capital controls long ago. Mauritius also successfully promoted manufacturing until it did not, and the share of manufacturing in the economy fell to 11% in 2020 from 20% in the 1980s. The author gives Rwanda a tepid grade on the three policy approaches."

"Ethiopia’s government promoted manufacturing with some successes in cement and floriculture, but its leading state enterprise asked North Korea for help to build 10 sugar mills as part of a vast sugar-development project. (It did not end well.)"

"As for the nonsuccesses, Mr. Studwell notes that some of the three policies were followed there, too. Promoting manufacturing has been a popular idea throughout Africa for decades. Ghana’s enthusiasm for manufacturing contributed to the long decline of its economy, from independence in 1957 to the 1980s. As the author notes, the country encouraged the assembly of automobiles, from kits of car parts, when the value of a finished car was sometimes less than the cost of the parts kit. The author worries that Ghana is repeating this automobile nonsuccess today."

"Nigeria’s Ajaokuta steel plant, which cost billions of dollars but never got around to producing any steel."

"Capital controls were also popular among the nonsuccesses. The author notes how the International Monetary Fund insisted on removing capital controls in the majority of African countries in the 1990s, an indication that the restrictions were widespread at the time. He does not note that these capital controls often went to extremes. When inflation is high, controlled interest rates are far lower than inflation, and capital controls are fierce: Savers can’t preserve their wealth by moving it to dollar-denominated assets outside of the country. Some called such a package financial repression and suggested that savers move their wealth out of banks and into real estate or other real assets (or do not save at all). If savers don’t deposit any money in domestic banks, then the banks will have no money to lend, and borrowers will not get the subsidized bank loans Mr. Studwell favors. Destroying both savings and credit does not seem like a win." 

A Hard-Knock Life? Not for the Middle Class

Since the 1960s, the share of U.S. households earning more than $100,000 in real terms has tripled

Letter to The WSJ.

"Jordan McGillis writes in “Why the Middle Class Feels Poor” (op-ed, Feb. 12) that middle-class families feel they’re “losing ever more ground to the upper middle class.” He calls this “intensifying income stratification.” His measurement of stratification begins in 1975, which gives you a low growth rate. Virtually every other measure gives a more robust picture.

Between 1967 and 2023, the share of U.S. households earning in real terms more than $100,000 tripled, while the share earning less than $35,000 fell from 31% to 21%. Then, only 5% of American families earned more than $150,000. Today, more than a third do so.

How did this prosperity happen? We became more productive. The typical U.S. factory worker produces more in one hour than the typical 1947 worker did in a 10-hour day.

Scott Kaufmann

President, Kaufmann Financial" 

Dead people received internet subsidies

See FCC Overhauls $2.9 Billion Lifeline Subsidy Program to Curb Improper Payments: Regulators vote to tighten vetting for phone and internet subsidy after investigation found millions went to dead subscribers by Patience Haggin of The WSJ. Excerpts:

"The Federal Communications Commission voted Wednesday to advance sweeping reforms to its Lifeline program, tightening eligibility requirements and procedures for the nearly $3 billion phone and internet subsidy for low-income households."

"A government review, released by the FCC Office of Inspector General last month, found that over a nearly five-year period about 117,000 deceased individuals across California, Texas and Oregon received Lifeline benefits totaling $5 million. Thousands of these subscribers were already deceased at the time they were purportedly enrolled in the program. Another nearly $5.5 million was claimed for duplicate enrollments, in which more than one monthly benefit was claimed for a single individual, according to the report." 

Medicare Advantage Saves Taxpayer Dollars

Studies show that the Medicare Advantage program costs less than traditional Medicare

Letter to The WSJ. 

"When It comes to the Medicare Payment Advisory Commission (MedPAC), Matthew Fiedler and Benedic Ippolito get it wrong in “The Higher Price Tag on Medicare Advantage” (Letters, Feb. 18).

In claiming that the Medicare Advantage program costs taxpayers 20% more than if the same patients were in traditional Medicare, MedPAC makes no attempt to separate out the different kinds of enrollees. For example, many people in traditional Medicare are also in an employer plan. (Those people are probably relatively healthy.) Some Medicare Advantage enrollees are in special-needs plans. (Those people are less healthy.)

A true apples-to-apples comparison would separate out 16 categories of enrollees and compare the taxpayer cost for each. Yet for that to happen, the government has to do something it has never done: release the data.

Rep. Aaron Bean (R., Fla.) has introduced a bill in Congress that would force that very kind of disclosure. In the meantime, a rigorous study by Milliman estimates that taxpayers save $576 per enrollee per year when an enrollee joins a Medicare Advantage plan. This is consistent with an industry-financed study by Elevance Health.

The Elevance study also found that as Medicare Advantage penetration in a market increases, all doctors in the area begin to practice more efficient medicine. Owing to these “spillover effects,” a 10% increase in market share by Medicare Advantage plans leads to an average decrease in spending on all Medicare beneficiaries of between $105 and $127 per person per year.

John C. Goodman

President and CEO, Goodman Institute for Public Policy Research"