IT’S AMAZING THAT HILLARY, WITH HER EXTENSIVE PRIVATE-SECTOR EXPERIENCE, DOESN’T GET THIS: What Clinton’s Capital Gains Plan Won’t Do:

On the margin, it’s probably going to affect investment if you raise capital gains taxes by a lot — and nonetheless, this is not going to do much to shift the incentives toward longer-term thinking at companies. That’s because Clinton seems to fundamentally misunderstand the reason that public companies are so focused on short-term results that impact their stock price, rather than longer-term growth. To the extent that you think this phenomenon is real, and a problem, the issue is not that American investors, for reasons known only to themselves, have developed the attention spans of gnats. Instead, I’d argue that the problem is the massive shift toward institutional management of equity assets.

Here’s SEC Commissioner Luis Aguilar on this phenomenon in 2013: “The proportion of U.S. public equities managed by institutions has risen steadily over the past six decades, from about 7 or 8 percent of market capitalization in 1950, to about 67 percent in 2010.” Stocks used to be the province of affluent people who might hold them for decades — and might well take it into their head to show up at your shareholder meeting and delicately inquire why the chief executive officer is getting paid so much when quarterly results look pretty dismal. Now they’re the province of everyone — and everyone is in the hands of professional managers who don’t care how much the CEO is getting paid, would rather sell and buy something else than chivy the board into doing its job, and need to deliver price appreciation pretty regularly, lest their Morningstar profile become tarnished, or the regulators start asking the company to increase contributions.

Add to that the fact that you can now log in every day to see exactly how your 401(k) is doing, and you can see how short-termism might come to dominate executive offices.

But whether or not you think that institutional management is actually unleashing a great plague of short-termism upon the land, the important point is that the prevalence of institutional management will prevent you from fixing this problem by manipulating the capital gains rates. Pension funds do not pay taxes on the assets in their funds. Neither is your tax-deferred retirement fund subject to these taxes. And even taxable mutual funds are probably not going to be very responsive to this change, for a few reasons.

How are cattle futures treated under her plan?