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american economic liberties project
In Key State of Delaware, 'Corporate Insider Power Grab' Quietly Underway
"Delaware's Senate just chose billionaire insiders—like Elon Musk and Mark Zuckerberg—over pension funds, retirement savers, and other investors by passing S.B. 21."
Mar 18, 2025
The push to pass Senate Bill 21 in Delaware, the "corporate capital of the world," is garnering criticism from some anti-monopoly, economic, and legal experts this week.
"Delaware's Senate just chose billionaire insiders—like Elon Musk and Mark Zuckerberg—over pension funds, retirement savers, and other investors by passing S.B. 21," Laurel Kilgour, research manager at the American Economic Liberties Project (AELP), said in a Monday statement about state senators' overwhelming support for the "corporate insider power grab" last week.
Delaware lawmakers are swiftly working to overhaul state law after a judge ruled against Musk's $56 billion 2018 compensation package for Tesla. The CEO—who is the world's richest person and now a key leader in President Donald Trump's administration—then moved the incorporation for his other companies elsewhere, and urged other businesses to follow suit. Some are doing so and others are reportedly considering it, including Zuckerberg's Meta, the parent company of Facebook and Instagram.
As Business Insiderreported last month, citing Delaware's Division of Corporations, nearly 2.2 million entities are registered in the tiny state, including two-thirds of all Fortune 500 companies.
"This bill only serves to make it easier for corporate boards to rubber-stamp excessive executive pay and self-serving deals that drain returns from pensioners and retirement accounts," warned Kilgour. "Coming on the heels of another panicked giveaway to the corporate defense bar just last year, this is a reckless move that will undermine investor confidence and further erode Delaware's credibility as a fair corporate forum. The Delaware House must step in and stop this dangerous bill before it's too late."
Specifically, as AELP laid out, "S.B. 21 jeopardizes the ability of investors to protect themselves from harmful board decisions that slash returns to investors' hard-earned retirement savings, such as awarding exorbitant executive pay packages that far exceed any rational benchmark, or overpaying to acquire companies in which controlling shareholders have financial stakes."
"The bill makes it easier for corporate boards to insulate directors and controlling shareholders from litigation over conflicts of interest and self-dealing by corporate insiders, narrows who qualifies as a controlling shareholder, imposes a new presumption that board members are independent no matter who they are appointed by, and makes it more difficult for shareholders to discover conflicts by restricting their access to internal corporate records," the nonprofit detailed.
Joseph R. Mason, a Ph.D. economist and fellow at the University of Pennsylvania's Wharton School of Business, also sounded the alarm on S.B. 21 with a Monday opinion piece in the Delaware Business Times.
"I recently conducted an economic impact study on the likely effects of Senate Bill 21 (S.B. 21) on the Delaware economy. Based on my findings, a reasonable estimate of the annual economic activity lost due to S.B. 21's passage is $117 million-$235 million in decreased economic activity and 450-900 lost jobs, statewide," he wrote. "My analysis very likely understates the impact to Delaware, as it only estimates lost economic activity generated by law firms located in the state."
Mason's op-ed followed a Delaware Onlinepiece from attorney Greg Varallo, who is head of Bernstein Litowitz Berger & Grossmann's Delaware office and represented Richard Tornetta, the Tesla shareholder behind the Musk case in the state.
"On March 5, this paper published an op-ed by William Chandler and Lawrence Hamermesh," Varallo pointed out last week, referring to a former chancellor on the Delaware Court of Chancery who is now a partner at Wilson Sonsini Goodrich & Rosati, and a professor emeritus at the Widener University Delaware School of Law.
"In the piece, my old friends extolled the virtues of S.B. 21, going so far as to argue that the bill restored balance to the corporate law playing field. Nonsense. S.B. 21 is a license to steal for corporate controllers like Elon Musk," argued the lawyer, who spent decades leading a defense-side firm.
According to Varallo: "The idea that S.B. 21 will restore 'balance' between the interests of regular investors and billionaires who control companies is demonstrably false S.B. 21 creates 'safe harbors' for controllers to steal from their controlled public companies and from the stockholders who invested in those companies without having to answer for doing so. The bill overturns decades of thoughtfully crafted common law and puts Delaware in direct competition with Nevada for the state which gives controllers the clearest and easiest to follow road map to commit grand larceny."
"This isn't someone else's problem. If your retirement includes index funds, as most do, you are a stockholder in controlled companies because no index fund operates without owning controlled companies," he added. "As a citizen who believes that the independence of our judiciary is at the very core of our form of government, I can't sit still while the proponents of this legislation continue to attack the public servants who serve on the Court of Chancery, the nation's leading business court."
Meanwhile, as the Delaware Business Timesnoted Monday, S.B. 21 is backed by "two of the most powerful Delaware business organizations, the Delaware State Chamber of Commerce and the Delaware Business Roundtable," and groups that testified in support of it include ChristianaCare, the Central Delaware Chamber of Commerce, and the Home Builders Association of Delaware.
Despite expert warnings, Delaware lawmakers are continuing their efforts to send S.B. 21 to the desk of Democratic Gov. Matt Meyer, who last week called on them to pass the legislation "as quickly as possible." According to the Delaware General Assembly website, the state House introduced an amendment to the bill on Tuesday.
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Trump Opens Door to Medicare Cuts After Backing GOP Plan to Gut Medicaid
The president's contradictory statements in recent days "cannot mask his betrayal to millions of people across the country who believed he would lower their costs," said one critic.
Feb 20, 2025
Beltway journalists reported Thursday on "confusion" spreading throughout the White House and the Republican caucus following U.S. President Donald Trump's endorsement of a House plan that would slash Medicaid and comments from the administration that suggested Trump will not protect Medicare—but Democratic lawmakers and progressive advocates said the message was crystal clear.
" Donald Trump and Elon Musk want to cut taxes for billionaires like themselves—and pay for it by gutting Medicare and Medicaid," Maurice Mitchell, national director of the Working Families Party, said in a statement. "They don't care if families have to take on crushing debt to pay for care, as long as it makes them much, much richer."
Mitchell offered the translation of contradictory statements from Trump that came Wednesday, with the president expressing support for a House resolution aimed at imposing his border and energy policies and extending his 2017 tax cuts that primarily benefited the wealthy.
The House resolution "implements my FULL America First Agenda, EVERYTHING, not just parts of it," the president said, suggesting his opposition to a Senate proposal that would push for two separate bills.
Calling for $2 trillion in spending cuts in order to fill the $4.5 trillion hole the tax cuts would blow in the deficit, the proposal would include potential cuts of $880 billion to Medicaid, which have made some Republicans in Congress express doubt that they could support the package without angering millions of constituents who rely on the low-income healthcare program.
Sen. Josh Hawley (R-Mo.) is among the Republicans who have expressed "concerns" about the "very deep cuts to Medicaid" included in the House proposal, which Larry Levitt of Kaiser Family Foundation said would "go well beyond eliminating fraud and abuse."
Hours before he endorsed the House plan, Trump said neither Medicaid nor Medicare "is going to be touched" in the Republican budget, and his later comments reportedly came as a surprise to his top aides who were unaware of what Medicaid cuts Trump would be willing to approve.
The White House further muddled its message about how it intends to fund tax cuts for the wealthiest Americans and corporations, including those who helped fund Trump's election campaign, when a spokesperson attempted to clarify that the government healthcare programs relied on by more than 100 million people would be preserved.
"The Trump administration is committed to protecting Medicare and Medicaid while slashing the waste, fraud, and abuse within those programs—reforms that will increase efficiency and improve care for beneficiaries," White House spokesperson Kush Desai told Politico Wednesday, before sending an updated statement that left out the mention of Medicare.
The administration's attempt to remove Medicare from the conversation about possible cuts didn't get past Democratic lawmakers including Sen. Ed Markey (D-Mass.), who said the original comments indicated "a war on Medicare."
Voters who supported Trump because they believed his promises to protect Medicaid and Medicare "were had," according to the administration's latest comments, said Helaine Olen of the American Economic Liberties Project.
"By endorsing House Republicans' budget plan, Trump once again is putting the interests of the ultrawealthy and corporations over the needs of everyday Americans, supporting a plan that devastates the healthcare of tens of millions of Americans," said Accountable.US executive director Tony Carrk. "Trump's statements to the contrary cannot mask his betrayal to millions of people across the country who believed he would lower their costs. Medicaid is more than a pawn in the administration's game: It's an essential program for millions of Americans of all ages."
Trump's newly confirmed commerce secretary, Howard Lutnick, further made the White House's objectives clear when he claimed on Fox News that Social Security, Medicaid, and Medicare are rife with "$1 trillion of waste, fraud, and abuse" and will be slashed.
"We have almost $4 trillion in entitlements and no one's ever looked at it before," said Lutnick. "You know Social Security is wrong, you know Medicaid and Medicare are wrong, so he's gonna cut $1 trillion, and then we're gonna get rid of all these tax scams that hammer Americans."
"Howard Lutnick, Trump's billionaire buddy turned commerce secretary, has confirmed that the administration was simply lying to MAGA supporters about not touching Social Security and Medicare," wrote Malcolm Ferguson at The New Republic on Thursday. "This is a long cry from the party that was telling its voters—many of whom are elderly conservatives on government benefits—that they wouldn't lay a finger on the programs they need most."
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Even Those Who Believe Tariffs Are Useful Think Trump's Trade War Makes 'Zero Sense'
One economist warned the tariffs would amount to the "largest tax increase... that has ever been imposed" on working-class families.
Feb 03, 2025
The trade war that U.S. President Donald Trump launched over the weekend by announcing sweeping new tariffs on imports from Canada, Mexico, and China drew intense criticism from experts and analysts across the ideological spectrum, including those who believe strategically deployed tariffs can help protect domestic jobs and workers.
"Tariffs are a powerful, effective tool to deliver certain goals. But Trump's Canada/China/Mexico tariffs make zero sense. And even undermine tariffs' legit uses," Lori Wallach, director of the Rethink Trade program at the American Economic Liberties Project, wrote on social media late Sunday, expressing agreement with United Auto Workers president Shawn Fain.
Fain said in a
statement that the UAW "supports aggressive tariff action to protect American manufacturing jobs as a good first step to undoing decades of anti-worker trade policy," pointing specifically to the North American Free Trade Agreement (NAFTA) and its successor agreement that Trump negotiated during his first White House term.
The union does not, however, "support using factory workers as pawns in a fight over immigration or drug policy," Fain continued. "The national emergency we face is not about drugs or immigration, but about a working class that has fallen behind for generations while corporate America exploits workers abroad and consumers at home for massive Wall Street paydays."
The officially stated purpose for Trump's 25% tariffs on Canadian and Mexican imports and 10% tariffs on Chinese imports is to confront what the White House described as the "extraordinary threat" posed by the movement of migrants and drugs across the southern and northern U.S. borders.
But Wallach argued Sunday that using tariffs to address immigration and the flow of drugs "is like trying surgery using a saxophone—wrong tool!"
"After decades of an American trade policy run by and for the largest corporations and to the detriment of American workers, independent farmers, and small businesses, we certainly do need a new approach," she added. "But simply imposing 25% tariffs on Mexico and Canada and another 10% on China will not rebuild American manufacturing/create U.S. manufacturing jobs or raise wages. Particularly, if such tariffs can be axed, lowered, or upped at the president's whim for reasons unrelated to trade/jobs."
"While tariffs can play a constructive role in protecting U.S. jobs and enforcing labor and environmental standards when part of a strategic industrial policy, Trump's approach is neither strategic nor appropriate."
Trump told reporters late last week that he is "not looking for a concession" in response to the new tariffs, which prompted swift retaliation from Canada, Mexico, and China.
The announced tariffs, which are set to take effect on Tuesday, also shook U.S. and global equity markets as Trump threatened additional duties against imports from European Union nations and admitted Americans could experience "some pain" stemming from the trade war. Mexican President Claudia Sheinbaum said Monday that her country reached an agreement with Trump to delay implementation of the tariffs on Mexican imports for a month, reportedly in exchange for the deployment of 10,000 Mexican soldiers to the country's northern border.
Contrary to Trump's insistence that tariffs are paid by targeted nations, they are in fact paid by U.S. importers, who then either eat the costs or pass them on to consumers through higher prices. Economist Dean Baker noted that the new tariffs amount to "a tax increase of roughly $200 billion a year ($1,600 per family) that will overwhelmingly be paid by moderate-income and middle-income families."
"It is the largest tax increase on them that has ever been imposed," Baker wrote Sunday. "And retaliation from both countries is likely to impose additional costs."
Melinda St. Louis, Global Trade Watch director at the consumer advocacy group Public Citizen, said in a statement that "no matter the intractable problem, Trump's go-to playbook is to bully our neighbors through tariffs and to scapegoat immigrants."
"Instead of addressing the actual causes or seeking real solutions to the complex public health crisis surrounding fentanyl, Trump jumps to impose damaging and self-defeating across-the-board tariffs and to spout more hateful rhetoric that dehumanizes our immigrant neighbors," said St. Louis. "While tariffs can play a constructive role in protecting U.S. jobs and enforcing labor and environmental standards when part of a strategic industrial policy, Trump's approach is neither strategic nor appropriate."
"Using tariffs to bully countries to advance an anti-immigrant and anti-humanitarian agenda will do nothing to support U.S. workers and will make our immigrant neighbors less safe," she added.
The tariffs also drew backlash from the right-wing Wall Street Journaleditorial board, which slammed the president for launching "the dumbest trade war in history."
"Bad policy has damaging consequences," the editorial board wrote late Sunday, "whether or not Mr. Trump chooses to admit it."
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