Senator Baldwin took inspiration for this bill from an example of so-called shareholder short-termism when Starboard Value said in 2011 that the Wisconsin-based Wasau Paper should focus on its tissue paper business instead of its free-sheet printing paper business. Starboard made its case for change, arguing that the world was moving away from free-sheet printing paper and toward tissue paper. Essentially, Starboard said Wasau should focus more on its most profitable business and take resources from businesses where it was losing money. Wasau Paper argued that it should focus on both.

Eventually, Wasau Paper decided to close a money-losing free-sheet printing paper plant in Brokaw, Wisc. One hundred jobs were lost. Local tax revenue was lost. It hurt that town’s economy. Hence, the name of this bill is the Brokaw Act.

But let’s examine the facts here.

Was Starboard wrong?

No. A Wasau Paper competitor, Verso Paper, has maintained a focus on free-sheet printing. Verso just went into bankruptcy for the second time. The tissue paper-focused competitor Kimberley Clark, however, appears to be thriving. It’s stock price has increased more than 110 percent over the last five years.

Was Starboard a “short-term” investor?

No. Starboard held its Wasau Paper stake for more than four years until Wasau Paper agreed to be acquired by SCA in October. That’s hardly “short-term game playing,” as Senator Merkley called it.

Did it act in a “wolf pack” with other investors?

No.

Do Senators Sanders and Warren favor companies running unprofitable lines of business until the entire company goes into bankruptcy and all jobs across the company are lost?