Clad in a violet robe, Bill Clinton told thousands of cheering graduates at New York University’s commencement that there have been “two bad ideas” that have taken hold in the U.S.
“I believe America has been hurt badly in the last 30 years by adopting two bad ideas that serve the interests of people serving atop the various totem poles in American today.” One of those “bad ideas” has to do with what he believes is taught in most business schools today.
Speaking before the NYU graduating class of 2011 at Yankee Stadium on May 19th, Clinton said, “I was probably the last generation of Americans until the present day who could have gotten an MBA, if I went to business school instead of law school, with the prevailing theory being that American corporations had obligations primarily to all their stakeholders.
“Ever since then we’ve been teaching our young people that your primarily obligation is only to the shareholder. The problem is if you do that you ignore the other stakeholders. That could be why wages have been virtually stagnant for the past 30 years, because the workers are stakeholders.
“It could be why communities haven’t been able to undertake economic transformations in many places, because communities are stakeholders. It could be why customers don’t care so much what the source of their purchases are, they’re stakeholders.
“I think we have to move back to a stakeholder not just a shareholder-only society in the U.S. and throughout the world.”
His comments, made from a grandstand erected at second base, won loud applause from the audience on a rainy day.
The second bad idea? “The second wrong idea is that the only problem America has is that the government, especially the national government, messes everything up that it touches. It would mess up a two car parade.”
“There is no such thing as a good tax, no such thing as a bad tax cut. No such thing as a good regulation, no such thing as a bad deregulation. That contradicts the evidence in the United States and every other country in the world that only truly successful countries have both strong economies and effective governments, and a public/private partnership to share the future.”