Democrats & Liberals Archives

Swimming Against The Current I: Regulation

Society naturally seeks to regulate behavior it considers harmful. When big disasters shake people’s confidence in a system, they naturally seek to do the impossible but entirely understandable job of making sure it never happens again. Some folks take a dim view of this impulse, and believe that nine times out of ten that after the public hysteria has died down, the status quo will function nicely to keep things in line. Those who dislike change in the organization of society, who value their place in the hierarchy of power tend to resist changes. But sometimes change should happen, and these people are simply in the way.

It's not that they don't have a point. Complete control and prevention of disaster are impossible, and often the standards in place suffice to do the job, if they are properly enforced, or perhaps rephrased to rid the system of the loopholes. But sometimes the approach the industries and their backers take is truly out of date, and the scheme for regulation insufficient.

But sufficiency in regulation is a tricky thing. In terms of more scientific issues, the science will show you what's need, what's necessary, and what you can get away with. Leaving aside the interference and faux-populist rhetoric used there (which I will save for another part of Swimming Against The Current), those issues are relatively easy. But dealing with the issues of regulation elsewhere presents two possibilities not often considered.

The first relates to leaving regulation loose and low. I know this is the preferred method for conservatives, but there they should consider something: you cannot get away with conservative regulation schemes, if business does not adhere to conservative values and pursue the goals of profit and prosperity in harmony with society's interests. You need a culture of honesty, a culture of compassion, and a culture of ethical adherence.

A competition-first perspective can badly warp this out of shape, as the ruthless are willing to take their business practices to the dark-side to win. People mistrust corporations nowadays, because they know that these organizations often have their own interests at heart, externalizing all the burdens and problems they can onto the consumer, the citizen, and the government.

In his book Collapse, Jared Diamond writes of the social license to operate, the informal approval of business activities that plays a crucial role in how willing communities, nations, and cultures are to accept and permit the activities in question. No business acts in a vacuum, and not all externalized costs and problems remain externalized. He cited a pair of contrasting cases, one in which an Indonesian oil company played havoc with the environment around it, and another where Chevron managed in a nearby country to preserve environment, local species, and cultural respect in the running of their oil wells.

There's a reason people balk at locating factories, chemical plants, and other potentially hazardous facilities near them. To put it simply, business has been too willing to allow disrepair, pollution, and other problems get out of hand, degrading the health of people, property, and commerce in the community. The unfortunate solution of many corporations has been to outsource this problem, to avoid America's labor market and its assertive attitude about its communities entirely. By doing that, though, they have merely begun to offend and harm cultures elsewhere, and that lays the seeds not only for ecological problems elsewhere, but indeed, for a repeat of the social disgust for business interests that is displayed in our communities.

Competitive pressures, some would say, are what encourages this attitude. But there's something problematic in this rationalization: its thinking is lazy as hell. It's also fairly short term, dependent on there being another place to run to get away from high wages and environmental regulation. The trick with a global enterprise is that sooner or later, there's nowhere else to run to worth running to.

We assume that these countries will remain politically and economically stable. We assume that our low wages will remain desireable forever. We assume that our trading partners doing this are playing fair, and that the low costs are real and not just the result of subsidies, labor movement suppression, and other artificial methods of price control. We assume that people aren't aware enough of the results of our pollution. We can be wrong here, and that can become a long term drag on the business.

Our biggest boom in the '90s was more technological than anything else. Research and development on any number of technologies expanded our nation's economic power exponentially. Without this efficiency, in fact, Wal-Mart and companies like it could not achieve the costs savings of their supply chains, outsourcing or not.

In the modern motor vehicle any number of technologies, from the onboard computers regulating the engine's performance to the platinum impregnated catalytic converter help to keep fuel efficiency and engine power high. New technologies like hybrid engines promise to improve that even further. Fuel Cells could create an even greater impact. But these are not easy or simple things to accomplish. They are things that effort must be put into. People have to take short-term costs in order to make these things reality.

Efficiency often entails suffering temporary difficulties for the sake of future ease. Not all people can take the long view on that. The truth of the matter is, it's in the interest of business to anticipate problems, and even, if they can, make a profitable solution to it. The Detroit Auto-Makers should have done themselves a favor and not leaned so heavily on the big SUVs as their flagship product. They should have been advancing the technology ahead of their competitors. Unfortunately, they took a conservative view on profit and commerce, risk-averse, unwilling to acknowledge that the status quo could not be maintained.

It is in the best interest of companies to anticipate the future interests of clients and customers, both product wise and relationship-wise. They should not be playing catch-up to the public when it starts demanding that they cease harmful behavior or when its interests start heading in some other direction. They should, like any healthy individual, be capable of not only exercising their enlightened self-interest, but working in harmony with the consumers, the employees, and the citizens who have to absorb the problems they externalize.

Posted by Stephen Daugherty at March 31, 2006 9:36 AM
Comments
Comment #137096

Stephen,

You said a mouthful. Most of which is hard to disagree with, in the same way that the statement, “we should hope that all newborns are born healthy and to happy homes.”

I got to ask, what is the real point? Are you arguing for more regulations? Better regulations? Better business? If one or all of these could you lay out your plan for achieving this?

Posted by: Rob at March 31, 2006 11:34 AM
Comment #137098

Stephen

You make some good points about putting off future gratification, but you may have chosen the wrong tool – government - to achieve it.

What works best is a system of rule of law, free markets and light regulation.

Government is political, by definition. Politics doesn’t mean that we do what is best for the people. It means that groups of people get together and hash out their differences and come to agreements and compromises. Unfortunately, those who play the political game best are often those that do the producing game worst. It makes sense, when you think about it. Everyone has only so many hours to devote to his interests. If you are doing politics 8 hours, it means you can’t be doing something productive.

We need politics and we need law, but we also need someone to do the work and make the things. Politics often results in absurd priorities. Think of the case of New Orleans. Private firms would never rebuild below sea level without government guarantees and subsidies. They couldn’t afford the risk. But government will pour billions into this destructive venture because the politics demands it.

What we need is strong property rights. You don’t destroy what you own. Most of the problems we have with environment etc, is caused by external costs, i.e. someone able to pass his costs on to society, as you point out. Property definition would help this.

You mention the SUVs. You are right that was a mistake, but we often only can tell mistakes after the other solution has been found. The value of the market (among other things) is that it is statisical. We try lots of things. Some work. Failures are part of the system, but they are smaller. Again, think big government (Soviet Union). They put all their eggs in one socialist basket and the whole thing collapses.

If you read that Collapse book carefully, you find that lack of property rights is a major problem. In Easter Island, the forests were owned collectively. The government owns grazing land in the west. In those cases, regulation is in place. It just works counter to what you are trying to accomplish.

If we could always have GOOD regulation, there would be no problem. Of course if men were angels no law would be necessary. We have to deal with the real world corruption and most of the big screw ups (think Soviet or Chinese economy) are done with the cooperation or at the instigation of government.

Posted by: Jack at March 31, 2006 11:43 AM
Comment #137108

Rob-
I’m arguing for a more mature perspective on regulation, and understanding of why people seek it, and what business can do to keep people from seeking it. If they want conservative regulation (that is, minimal) Theirs has to be a genuinely self-regulating system. Otherwise, the public will act in its self interest and regulate them themselves. I think this is crucial.

Jack-
Your market theory is too idealized. The pressure to regulate doesn’t automatically mean regulation, but you should be concerned, if you want to keep regulation to a minimum, with avoiding the kind of crises and disasters which lax business attitudes towards these things foster.

The Real world is non-ideal, and that means that places like New Orleans will be rebuilt until the problems take those options permanently off the table. As bad as New Orleans is, many other places are even less ideal for those purposes, and New Orleans, being at the gateway to the Mississippi Delta, is primely placed. Many cities and population centers are non-ideally placed for just such reasons. The market is not immune from the necessities of the non-ideal and the irrationality of human thought processes. It is, in fact, a consequence of how those processes and non-ideal realities work out.

Public regulation and works can do their part here. But that takes imagination and leadership, and often those who advocate market measures lack for either. They’re too willing to take the lazy way out and put things back as they were.

I think you read Collapse less carefully than I did. I acknowledge that a lack of defined property rights can lead to the tragedies of the commons, but that is one side of the coin. Diamond lists any number of situations where a tendency to regard private interests and property above other concerns has caused difficulties. Take the Montana Mines, and the issues of watering rights. Take the lack of zoning laws that he feels are partially responsible for the environmental and residential issues taking place there. A careful reading of his work reflects that different situations require different responses, but all situations entail good observation of the environmental issues at hand. In Montana, water is a significant concern. In Easter Island a lack of political unification. IN other places, too much political unification made it difficult to deal with these issues.

But deal with these issues we must. In terms of my subject, the issue is, how does the market remain free enough to avoid regulation. My answer is, it pre-emptively addresses the concerns of those the business serves, and those the business affects, before the behavior in question becomes a problem. This I pose in contrast to what we often see, and that is manipulative public relations, denials of the real harm done, and stubborn, irresponsible resistance to doing something about the problems. One reason I appreciate Jared Diamond’s book is that it presents a situation where corporate interests and that of the public do not necessarily have to be in such strident, adversarial conflict. That, though, will take a change in the culture and attitude of business that I don’t see the Republicans heading up.

The question here is when you are going to realize that The Republicans cannot forever stonewall and undermine regulatory efforts, that the appropriate approach is to deal with these problems, rather than spend millions dealing with the consequences when disaster strikes, or having to face stringent regulation in the aftermath. If you want to be free, be responsible, so nobody feels obligated to get in your way.

Posted by: Stephen Daugherty at March 31, 2006 12:12 PM
Comment #137113

Stephen,

Why do you feel that Republicans or Democrats can effectively lead a change in the culture or attitudes of business?

In regards to you last paragraph, you seem to indicate that there is some precisent knowledge available to us to ensure that mistakes are not made. While I can see that in some cases (zoning laws, for example). How do you suppose that disasters from the result of business or human activity are that easy to predict?

Posted by: Rob at March 31, 2006 12:25 PM
Comment #137118

So at what point do you quit regulating business?
After it’s outsourced all it’s operations and there’s no jobs left for the American folks?
Regulations are necessary to a degree. After that they become burdensome. Most small businesses can’t afford all the regulation there is now. And add to that the fact that I can violate one regulation while trying to follow another it becomes a nightmare.
What we need is less conflicting regulations from a hundred different bureaucracies. Have only one agency to oversee business regulations instead of the 10 or 12 we have now.
We use solvents at the factory to clean parts before rebuilding them. OSHA tells me I can’t store these solvents inside at all once they’re opened. The EPA says I can’t store them outside but have to put them in a separate room that has venolation to keep vapors from getting into the atmosphere. Either way I do it I’m violating someones regulations.
It’s most likely that conflicting regulations like these is one of the reasons we see the bigger corporation outsourcing so much.

Posted by: Ron Brown at March 31, 2006 12:41 PM
Comment #137126

It is not government’s role to dictate to business how to be profitable either short term, or long term. It is however, a responsibility of any society to teach its young the essential importance of deferring immediate gratification for longer term gain. Education is the problem. GM achieved its highest profit margins on the big luxury and utility vehicles. GM management was unwilling to sacrifice some of those short term high margin profits in order to adjust their product mix to anticipate and compete with foreign manufacturers who were gearing toward high fuel costs and broadest potential market, rather than narrow more exclusive market segments.

The management of GM acted very much like a majority of Americans today. And that is why our future continues to unfold as more bleak with each passing year. It is also why national polls about America’s future keep going down even during a time when economic numbers are stabilizing in the short term in very healthy fashion. We spent an enormous 5 Trillion dollars we didn’t have, (had to borrow) to make our current economic numbers look healthy. But, the public is realizing that is not sustainable: borrowing from tomorrow to make today feel good.

Posted by: David R. Remer at March 31, 2006 1:12 PM
Comment #137131

Stephen

Not trying to be difficult or ask rhetorical questions, but …

what specifically don’t you like? I know something about forestry, for example. In the U.S. (not worldwide) regulations are sufficient and generally well followed. That does not mean everybody is happy or there are no troubles, but additional regulations would not create a better situation, and might make it worse by encouraging fly-by-night operations. One example, only, but one that many people misunderstand.


Posted by: Jack at March 31, 2006 1:20 PM
Comment #137132

Excellent article and follow-up posts, SD.
David, I absolutely agree. So many people adhering to a greedy, short-term gratification agenda that ignores the needs of the future is exactly the mindset that has been screwing up this country and making our prospects for tomorrow so bleak. Common sense combined with education is definitely the key to fixing this problem, and it should have nothing at all to do with petty political partisanship.

Posted by: Adrienne at March 31, 2006 1:34 PM
Comment #137157

Rob-
1)The future doesn’t unfold in a vacuum, and foresight does not require psychic powers. There are signs of the way things are going out there. Groupthink and bureaucratic selfishness can lead people to dismiss and deny the signs of how things may turn out. One has to look beyond the status quo and one’s current best interest at time to see where one really needs to be.

2)The saying “Those who do not know their history are doomed to repeat it.” has some basis in fact. History is complex, but many things remain the same, nature and human nature alike. Building a dam with permeable rock below was a bad idea with the St. Francis Dam many decades ago, and is still a bad idea now. Allowing one organization to both sell stock and make loans to the same company has always been a bad idea. So is allowing the same accounting firm to do audits for a corporation as the one that does its consulting.

Human beings are human beings, and history shows that many kinds of mistakes are repeated. Shoddy construction, for example, is so old that there are provisions for executing builders whose houses fall in on people in the Code of Hammurabi, and in the Bible. When mistakes and frauds are so sadly predictable, we have a duty to deal with them to prevent future harm.

Ron Brown-
You have a point on conflicting regulations, and measures should be taken to clarify and work them out. But your question about where do we stop with regulation has already been answered:

a)where the businesses as a matter of course take the initiative to regulate themselves, and

b)where the people are satisfied that their interests are served.

You assume what seems a rather defeatist way of handling things to me. If a regulation doesn’t make sense, expose it, make a media issue of it. Perhaps you can get people to agree and get the government to clarify it. It won’t happen though, if people just try and get out of it. Worse, you might make people anxious enough to feel like increasing the regulatory burden.

The trick here is feedback, rather than denial and rejectionist politics, cooperation and informed debate as opposed to outright conflict and unscrupulous rhetoric. Nobody will truly win the argument if the basis of victory is misinformation, and the mode of discourse is needlesly divisive.

Jack-
I don’t think you’re prescient enough to anticipate all the regulation we might need, or which might be exchanged for better industry control or whatnot. Remember the example in Collapse about that lumber association dealing with better forestry practices?

The question of how much regulation to apply is a deceptive one, because the point is not to get up to a certain level, but rather to achieve a certain positive result. Naturally, we need to make such regulations both enforceable and binding. We shouldn’t have laws on the books that do nothing or ask the impossible, and in all cases, we should do our best to gain insight as to what’s working well and what’s not. It’s a balancing act, one that is dependent on the context of the situation.

The point isn’t making government big or small; it’s making it work.

Posted by: Stephen Daugherty at March 31, 2006 3:52 PM
Comment #137165

Stephen,

So why do you think Democrats or Republicans can actually create the kind of change in the business community that you believe is necessary?

Posted by: Rob at March 31, 2006 4:36 PM
Comment #137168

Because our leaders in Washington write the bills and sign into laws all the provisions that define what’s required of a business. That simple. What I suggest here is that Business leaders curb bad behavior informally in order to avoid the social necessity of our government doing for them. Like I said before, if you want to be free, be responsible, so nobody feels obligated to get in your way.

Where it is in the public interest to curb bad behavior, and the factors involved are discernable, it is the government’s duty to step in, and at the very least make such practices more difficult so it’s not worth people’s while to pull stupid stuff. But I believe the market can discourage much misbehavior if there is more transparency in business, so the regulation doesn’t necessarily have to be “thou shalt not” style all the time.

Rule of law and self regulation of market are important, but for them to work they require that these dealings in question be vulnerable to exposure. Disclosure is a necessary part of any self regulating system, otherwise such systems are just running on fictions.

Posted by: Stephen Daugherty at March 31, 2006 5:31 PM
Comment #137169

Stephen,

It seems to me that you’re not calling for a tweaking of our economic system, but a major overhaul. If you are simply saying our corporate laws should always be a living document, I agree with you. The day we claim perfection is the day we lose our amazing economy. But if you’re calling for a major revamp, whether it’s loads more or loads less regulation, I would say you’re taking an oval wheel and trying to make it square. I would prefer less dramatic changes. We have oodles of regulatory laws right now, we should worry about enforcing those first before we claim them unhelpful and go down some other more drastic, dangerous path.

Posted by: Brian S. at March 31, 2006 5:42 PM
Comment #137174

Stephen

We don’t disagree (I don’t think)

I want regulations to be clear and effective too. I don’t object to goals. What I don’t want is for government to determine means. I also don’t want regulations to achieve “fairness” or redistribution. These are things not well handled by government regulation.

Regulation must also follow market rules, i.e. you can’t make someone do something that doesn’t work.

Government also should stay away from setting prices or determining markets.

In other works - goals not means. Safety regulations and environment regulations legitimate. Social ones, not. No determining winners and losers.

Posted by: Jack at March 31, 2006 6:03 PM
Comment #137183

I would like to see follow up evaluations built into the propsed regulations. It wouldn’t be too difficult. A matrix of goals and measurement. Then, each law would have specified time with which to justify itself.

For example, NAFTA. This treaty was sold to the American public as the means to move low technology, labor intensive jobs to Mexico. We were told the temporary pain of losing those jobs would be off set by the increase affluence of the Mexican workers. This would reduce pressure to come to America for work and increase markets for our products. This should be evaluated to make sure it is performing as intended.

Tax Breaks creating jobs. Sometimes the requests are very specific, such as in Wisc. companies saying that a Wisc. tax was causing them to be less competitive. They assured us that with this tax break they would be able to create new jobs. Since the signing, one of the companies present at the bill signing ceremony and spoke has since laid off about 2,000 employees and is closing 2 plants.

Even pollution… some of the most pristine counties here in Wisc. are being threatened with heavy fines because of the air pollution levels present. This pollution is being carried to their counties from Milwaukee and Chicago.

These are just a few that were on the top of my head… but there needs to me a mechanism built into relgulatory to measure their effectiveness.

I agree that the accounting scandals, environmental disasters show that companies are not policing themselves… as in the NIMBY… there are many inner cities with abandoned factories and warehouses… just up and left.

Along with all the benefits of being a CEO, we might have to make them criminally responsible for the actions of their companies to a degree that they aren’t now.

Posted by: Darren7160 at March 31, 2006 8:04 PM
Comment #137205

Brian S.-
I wouldn’t be so presumptuous to say that I know the answer of which way things should be done, or that anybody knows that exactly in advance.

What I have in mind is more like a change in attitude, a change in different sets of goals based on a calmer, more educated, more humane sense of what we do. We make false gods of too many human institutions and forget their fallibility, and our own as well by extension.

Don’t worry. I am neither want a Government with its fingers in everything, nor one of the size to drown in a bathtub. I’m a member of the Goldilocks faction, if you take my meaning.

Jack-
You get too precise on how you want to limit government. A government should be able to forbid certain means of doing things. I would add, though, that I don’t take the napoleonic code approach of prescribing everything that is acceptable.

As for fairness and redistribution, I think that is your opinion. While the government should not attempt the impossible and make things fair and all people’s share of wealth equal with it, sometimes government is able to help with fairness and resdistribution of wealth These are only means of government action, which we should not reflexively reject.

As for regulations following market rules, two things can be true: 1)Market rules can produce nasty results with the nice, and 2) Nobody can predict everything that is possible under the market. That’s the very point of their being a market; the economic world is so complex that there’s no calculating all ends. Therefore it’s follow to think you can do central planning from DC.

Ultimately, goals without means are dreams without the means to get something to come true.

Posted by: Stephen Daugherty at April 1, 2006 12:40 AM
Comment #137234

Stephen,
Exactly concerning markets. Actually, Economics is based on theories… not laws of science. They might be pretty good at predicting… but they are not immutable laws.

That is why I would like to see goals within certain legislation. This is our intent with this regulation, these are the goals, this is how we will measure them, and this is the date for the evaluation. I believe that GAO does some of this, but it seems sort of piece meal to me.

Regulations and laws should be monitored to determine if they are having their desired effect. If not, then they should see what can be done to correct it.

NCLB might not be a very good law in many ways… but it does specify what it hopes to achieve.

We make laws for intended purposes… not just to make laws. It is very difficult to actually write a law that cannot be circumvented if we only believe in the letter of the law.

Evidenced the campaign reform attempts? The governmental code of ethics?

This is why I always say a great title for a law does not necessarily mean a great law. Such as the flawed NCLB. Who could argue against it with that title?

Again, NAFTA. This might be seen as a “social redistribution of wealth” but it was one sold to us by Republicans and Democrats. Why?

Its intent was to redistribute wealth with the older and simpler manufacturing to Mexico which would create jobs that would eventually allow them to become consumers of new American products. This would benefit all.

However, if in actuality the companies are simply paying much lower wages and keeping the prices the same and pocketing the difference as additional profit… there aren’t many people benefiting from this as predicted.

Yes. The companies are obeying the letter of the law… but not its intent. Net result? Lost jobs in America, poorly paying jobs in Mexico that are not allowing them to become affluent consumers… a growing middle class.

I agreed to it because I was just completing my BA in Business and it sounded reasonable and matched what was in my text books. Today, I am a bit more jaded and less enthused… now it is CAFTA and the President touting the need to open Global trading…

Most “protectionists” understand how global trade is supposed to work… but they have seen little benefits so far… so, like me, they are a bit skeptical.

It is presupposed that no company would willingly make a product harmful to their customers. It doesn’t make sense. Of course it doesn’t. But, as with so many “ism’s” human nature has a way of messing things up. Let’s call them the 7 deadly sins.

People continue to get sick and die from eating mishandled or prepared food. A bunch of children’s rings given as toys with a product are being recalled because of the high level of lead. Can you believe that? After all these years someone still is putting lead in something that a child wears on their hands (lead never leaves the body… “Mad as a hatter?” comes from their working with lead!).

Without regulations… would we even be able to force a recall of the rings? Or of cars with defective brakes? What about poorly placed gas tanks?

Just one more “social engineering” regulation. Ayn Rand would say that segregated businesses would also be irrational because the person is in the business of serving customers… not races… however, again, human nature. Some tried to pose this as a “private ownership” right… to serve the customers that the owner wanted to. However, the business uses public services that are paid for by everyone… yet discriminates against some of those people that helped pay for the roads, police and fire protection.

Now, my “social engineering” aside… wouldn’t we call our nation that was created the largest Social Engineering feat ever attempted? Radical? A step out into the unknown?

That is why the “social engineering” label does not invoke fear and revulsion in me. Its benefits include:
1) America
2) Woman’s voting rights
3) Minorities voting rights
4) Elimination of segregation
5) Safer jobs and less industrial accidents
6) Safer food
7) Equal access for everyone to America’s bounty

The list is almost endless. If we want to see how much, just compare us to other nations that have remained “cautiously” moving in that direction… Some believe that “social engineering” helps a group and the expense of the individual… but isn’t the group a number of individuals… ones that might not be receiving the benefits to which all Americans are entitled?

Some proudly thump their chests and declare America the greatest country in the world (rightly so) yet do not always contemplate why this is so… we like to sometimes believe that it is us as individuals… while it might be OUR government (that serves us) that allows the individual to flourish.

Yes, there are many things that government tries to do, sometimes successfully, sometimes less so.

Individually, most Americans do understand the intent of laws and try to live by them, unless it is taxes, we mostly disapprove of their actions. Because we understand why these things are necessary.

How can we evolve as a society and grow to be even better? Morally, spiritually, economically if we are afraid of change?

People want to blame the government, and sometimes it is very valid… however, why not put the blame on the actual problem… individuals and companies using the “letter of the law” instead of its intent?

Posted by: Darren7160 at April 1, 2006 4:12 AM
Comment #137241

Actually, mad as a hatter comes from mercury poisoning. Lead poisoning does figure into crackpots. I think there was some lead lining in the cooking pots of yesteryear, and when the ceramic around it cracked, the metal would dissolve into the stews and whatever else.

Results, naturally, would be the same neurotoxic effects we’ve come to know and love.

My next essay will focus on effects like this.

Posted by: Stephen Daugherty at April 1, 2006 8:19 AM
Comment #137306

Stephen,

I was right with you up until fairness and redistribution of wealth being tools that the government should be able to use. I can take ideas and regulations that ensure that business don’t exploit or harm their employees, customers, or communities. However, to try to use goverment as a way to ensure that business is fair is a sure fire way to guarantee that the opposite will happen. The law of unintended consequences. As for redistributing wealth, I suggest you get some good code words fast for that plan, because I can’t see it playing well without a prolonged greed and envy campaign. There is a reason that most folks think that the inheiritance tax is unfair.

Darren,

I don’t think all of the things you described are social reengineering. I agree with America, desegregation, and voting rights. But the safer workplace and safer food strike me less as social re-engineering and more as good solid regulation of businesses. Maybe splitting hairs here if so ignore. I’m not sure at all what equal access to America’s Bounty means.

Btw, CEO’s are criminally responsible for the actions of their companies under Sarbanes-Oxley. So are CF0’s. At least as far as there responsibility to report real and honest data to the markets. It’s a law that ensured more transparency in business accounting than ever before in the U.S. and there are real civil and criminal teeth in it.

Posted by: Rob at April 1, 2006 3:21 PM
Comment #137310

Rob, well you can tell me why people think its so unfair. I mean, here you have somebody getting a lifetime’s worth of somebody elses income in one shot, and they’ve never had to pay an income tax on it. Inheritance taxes even the score, and with the amounts being given in inheritance cases, hardly leave the person in poverty. The question is whether you define fairness in terms of just wanting to keep all your money, or in terms of different parts of society being asked to do their part together.

As for redistribution of wealth? Well I’m not advocating that their assets be liquidated, their property be divided amongst their servants, or their money given, above a certain level, to everybody. I have no interest in balancing the scales like that.

Information and professional obligations are the best way to ensure fairness. Other than that, the business world is the business world.

Posted by: Stephen Daugherty at April 1, 2006 3:50 PM
Comment #137322

Seems to me that had the government increased CAFE standards for fuel use,as worked before,detroit would have been forced to make more efficient suvs and light trucks and would be in much better shape now and our trade balance would be much better. Less forign oil and auto imports, better for the enviorment etc. The technology involved is off the shelf stuff.They just did not want to do it. The country and the industry would be better off if there had been more regulation.

Ron Brown
You might try useing a different,less dangerious material for your process. I do not know the specifics of course but sometimes alternates exist that may cost a bit more but after figureing in storage cost and potential employee injury, employee training cost etc. might be cheaper and maybe even better.

Posted by: BillS at April 1, 2006 4:25 PM
Comment #137331

Stephen,

Why it is unfair is easy. The money left to heirs is not income but a transfer of their property to their heirs. The person who has worked all of their lives to see that their children are taken care of now are taxed again on income they already paid taxes for. I take exception to government trying to “even the score”.

In addition, in the cases of small business and farms, the inheiritance tax can ruin those businesses. Have a farm that has land valued at a $3,000,000. It produces about $800k in annual revenue with 12% margins or about $100K for the owners. Give it to your heirs and they have to come up with approximately $600k to pay the taxes or about 6 years income (gross not taxed). Guess that property goes up for sale soon. The same can go for any small business. But you can take solace in the fact that you can create more turnover in the upper middle class every generation and look more fair. But fair is always true for those on the way up isn’t it?

Posted by: Rob at April 1, 2006 4:49 PM
Comment #137345

Stephen, this kind of corporate dishonesty at the highest levels of government is something we should also be very worried about. It’s getting so damn hard to know who we should trust these days. They’re spending our taxdollars like they’re water, and we may be getting nothing but ripped off.

Posted by: Adrienne at April 1, 2006 6:40 PM
Comment #137375
Stephen, this kind of corporate dishonesty at the highest levels of government is something we should also be very worried about.

Dwight D. Eisenhower: the last honest and honourable Republican president.

(He was the Wes Clark of his day, y’know. Although balder.)

;o)

Posted by: Betty Burke at April 1, 2006 10:32 PM
Comment #137467

OR wes clark is the dwight david eisenhower of today. back then bald men had character

Posted by: mb at April 2, 2006 7:44 PM
Comment #137573

Stephen Daugherty,
You are right! My bad… sorry about that. It was mercury. I believe that we agree that, while it is intellectually vaild that no company would endanger their customer, it does happen. Too often. If you really do have something coming up like you mentioned I would love to read it.

Rob,
Sarbanes-Oxley is an interesting example. The leading Democrat on the committee (I wish I could remember his name) was on C-Span about 2 weeks ago defending the bill in a speech. Why? Because people are now going back and saying that it was too draconian and too hastily passed.

He was citing the costs of the actions of the companies to society, the shareholders, and the loss of confidence in our stockmarket due to poor accounting, conflicting consulting and auditing as well as conflicts of interest or nefarious motives of analysts.

By equal access to America’s bounty, you are right… it was a bit “meaningless” when analyzed. I meant a quality education, access to capital to create the American dream… freedom to know you are equal to all others.

Just an example that it wasn’t too long ago… In the early 1970’s my family adopted my baby sister. She passed just 2 years ago at the age of 30… Anyway, because she was African-American, or Black, if anyone prefers, we were told by a bank in Birmingham Al. that the loan on the house my father got from them was withdrawn. They were upset that my father had not mentioned the fact that my sisiter was Black.

They then proceeded to tell us which neighborhoods we could chose that they would give us the loan for.

Was a company, like insurace companies, able to discriminate based upon neighborhoods, zip codes or area-codes? Possibly… However, since the neighborhood we were first moving into was affluent it would be assumed that statistically anyone being approved for a loan would be a good financial risk… right? They had already looked at my father’s credit history, his income and all that and had approved the loan.

So, access to capital I would include as a bounty though I understand if other disagree. It can be argued that the anti-discrimination laws prevented this legally… but there are ways to discriminate that are seemingly color blind and just “good” business sense.

There are so many intangibles that make up a person’s relative place in life… how others view them and how they view themselves… so I will maybe be overbroad again, but say that the bounty is believing that you are an American, with as much worth as the next person. Regardless.

CAFE was a pretty good idea. However, the small trucks didn’t fit into the CAFE regs and neither did the SUVs because they were classified as trucks. Same with the safety regs.

I would like to see that revisited. As I was saying… I want regulations to have goals and expected results, like CAFE and then a scheduled evaluation after a set period of time to see if the regulations are meeting those goals.

Posted by: Darren7160 at April 3, 2006 9:22 AM
Comment #137630

Darren,

Nothing I agree with in your post. It’s awful that that happened to your family. I do believe that it is the government’s role to protect people from discriminatory treatment (it’s usually a pretty lousy business decision to do it anyway, so they shouldn’t be doing it from a pure market perspective either).

CAFE was a pretty good idea. I was under the impression that SUV were governed by the standards, but I could be wrong. They should have been if they weren’t.

Sarbanes-Oxley is no doubt onerus and draconian. But I think it was the only appropriate thing to do in the wake of the scandals in 2001. The bill was passed with a supermajority in the House and is a great example that bipartisanship can still work. Over the next few years, it may be dialed back, but I think that we should run with it for 5 years or so before making any drastic changes. Like HIPPA, Sarbanes-Oxley may not seem so onerus once you get over the hurdle of adjusting every day business practices to ensure compliance.

Posted by: Rob at April 3, 2006 12:33 PM
Comment #137632

The third word should have been disagree not agree. So used to arguing on these threads that I can’t even agree when I mean to.

Posted by: Rob at April 3, 2006 12:37 PM
Comment #137675
The third word should have been disagree not agree. So used to arguing on these threads that I can’t even agree when I mean to.

Yes you can!


(Oh! I’m sorry - I thought this was the Argument Clinic!)

Posted by: Betty Burke at April 3, 2006 5:23 PM
Comment #137704

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Corporate Average Fuel Efficiency standards were working well until the Reagan administration sabotaged them. Henry Ford knew that you can not persuade Americans that the weight of their vehicle has little to do with safety. Senators like Myrkowski, Stevens, and Lott are opposed to fuel efficiency.
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Test message, is the site working?
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Posted by: ohrealy at April 3, 2006 8:47 PM
Comment #137840

Dan,
I agree that rationale people would go into business to make a deserved, respectable living. Discriminating against anyone is counter to good business… which just kind of illustrates the illogical nature of discrimination.

Sarbanes-Oxley should be reviewed after time. I really do believe that goals, a system of measurement and a time table should be included into regulatory law… if it, or any regulation isn’t meeting its intent then it either needs to be eliminated or modified.

Some people just seem to attach an almost religous significance to economic theory. When Christians (of which I do believe I am) are questioned about all the bad things done in the name of God, they reply that it is man distorting His world.

I believe it is the same with capitalsim… it isn’t the system at fault… it is the greed and avrice of the people… and any attempt to limit it becomes heresy… They don’t want to acknowledge that we are trying to deal with the “bad apples” that keep costing us billions… they want to make it appear to be an attack on capitalism.

Posted by: Darren7160 at April 4, 2006 8:28 AM
Comment #149152

Fun-Fun-Fun…

Posted by: BettyBurke at May 18, 2006 6:08 AM
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