In response to Doug Henwood's question: I don't believe there is any point
to coupons if you can't trade them. If you couldn't trade them there would
be no need to hand them out. The government chould simply send each citizen
an equal size annual dividend check -- which was Lange and Lerner's original
proposal.
Roemer wants them traded to generate market signals about the relative
performance of different firms -- or at least coupon holders' opinions and
expectations about the prospects of different enterprises. As I try to
explain in the forthcoming issue of Z (October): 1) the price Roemer pays
for permitting coupons to be traded is that non-labor income will not be
equal -- contrary to Bob Pollin's statement to the contrary. 2) The market
signals generated are unlikely to be very accurate if they are the collective
opinion of millions of small shareholders with little at stake and with few
resources to gather accurate information. 3) Roemer himself doesn't seem to
think even semi-egalitarian coupon market signals are accurate indicators of
firm importance because he proposes two additional mechanisms for monitoring
firm performance: the investment bank trusts who would be their source of
loans for investment, and large mutual funds whose managers would have
incentive and resources to monitor carefully.
In which case, I ask why pay the price of unequal non-wage income? i.e. why
trade the coupons, or as Doug puts it, why have the coupons at all.
At which point we're back to Lange and Lerner -- not that I thought much of
their model either -- but we don't need the intellecutal services of John
Roemer.
