Tuesday, August 02, 2011

Do You Really Want the Fox to Guard the Henhouse

Americans hate Socialism. It is perhaps the worst insult that a Conservative can smear a Liberal with. But as with so many insults it is used inaccurately; in this case as a blanket condemnation of any Government presence in business.

If Government proposes a regulation - that is 'socialist'. If Government adds a worker safety law - that is 'socialist'. If Government proposes a consumer credit protection agency - that is 'socialist'. If Government proposes laws to protect the environment - that is 'socialist'. If Government tries to reduce the price of prescription drugs - that is 'socialist'.

Anything that the Government does that protects the average American from the rapaciousness of business is 'socialist'.

Who says so? Well the voices may be from the 'average Joe', but the money for the anti-government campaigns and the money to buy the politicians to parrot the company line comes from business.

Why should business do this? Do you have to ask? A corporation's fiduciary responsibility is to it shareholders; spending money to protect their workers, customers or the environment is seen as detracting from its mission.

Conservatives argue that it is in the Corporation's best interest to not cheat or poison its customers. But that contention is not supported by the facts.

Enron, Tyco, Global Crossing, the housing bubble, the savings and loan crisis, Long Term Capital, industrial food, PCBs, Love Canal - do I have to go on? Business takes short cuts, usually with bad consequences to individual finances, personal health, the environment and the economy.

But despite this litany of abuse there are many who cling to the 'marketplace' as being the best guarantor of ethical behavior. As Franklin (or maybe Einstein) is supposed to have said "The definition of insanity is to do something over and expecting different results."

Back in the day when most business was local it made sense for businessmen to behave ethically, after all they lived in the community, their kids went to school with your kids and reputation was important. Now the chances of corporate executives living in your neighborhood and their children going to school with yours are remote (nonexistent?).

The only reputation that counts is how much you are worth. Nobody even knows who is responsible for anything anymore. Bank of America is America's largest bank; can you name its CEO?

Politicians are not usually the most talented of people, but unlike corporate executives they do have to go to the electorate periodically and ask to keep their job. Usually they do get to keep it, but at least we have the option to 'throw the bums out'.

I would rather have a say in the process (no matter how minor) than relying on American business to do the right thing.

I hope that American companies continue to prosper and start hiring again. I think that Capitalism (genuine capitalism - but that is a future post) is the best system for creating wealth and prosperity. I think that entrepreneurship, risk taking and hard work should be rewarded. It is obvious and apparent that it was American business and the American work ethic that drove the US to preeminence.

But to think that American business is capable or even willing to police itself is deluded. Let business generate money and jobs, but let our Government ("of the people, by the people, for the people") look out for our interests.

Umpires and referees are not called socialists, but they do the same thing for sports that our government should do for business. No one like the officials penalizing their team and all of us prefer that the officials' role should remain small and discrete. But we all realize that without them, you couldn't play the game.

By Pitt Griffin

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