Business Press Gets it Right More Often

Sometimes when I read the responses to my eminently reasonable postings on this blog, I am dismayed. It is not that people disagree with me. Few people agree with me on most things. Rather it is the attitude toward business. It is a kind of us and them idea. Maybe people should read a little more of the business press.

Contrary to what people might think, I do not get most of my news and views from Fox. Most of what I know comes from "The Wall Street Journal", "The Economist", "Barron’s" & various webpages that send me particular news. I started reading the business press when I was in graduate school. I found it to be generally more unbiased, if you define unbiased in terms of being the reasonable basis for decisions. There is a reason for that. People making investments are making decisons. They are going to put their money where their mouths are and demand a higher level of accuracy. Publications such as "The Nation" or "Mother Jones" (is that still around?) can engage in fancifully flying diatribes that make intuitive sense but are wrong. The business press gets pulled down to earth much more often. They also tend to deal with more practical people.

There are two sorts of prognosticators. Those who predict what will happen and those who have a hand it making it happen. The former are more entertaining; the latter more useful.

The subject where I notice the greatest diversion into fantasy is one of my favorites: environment & energy. Few people are as interested in alternative energy as I am, but mine is a practical interest. I want to know what will really work and what the whole effect will be. I understand that any alternative energy source will be more expensive than our current energy mix. I also know that many big firms are working on alternative energy and investing big bucks in it. I read that upwards of 10% of ALL startup money is going into alternative fuels and it has become the new "in thing" among investors. In short, there is no conspiracy to keep alternative fuels off the market and there is no magic formula that will make energy as inexpensive as the air we breathe. There is a lot of work to be done and a lot of people are doing it. Solutions will be available, but not all at once. When they come, they will slip in silently on little cat's paws. Think of the hybrid. It is now common on American roads, at least on the east and west coast. It is now becoming kind of boring and expected.

If you read the business press, you know that some firms are not particularly interested in green technologies, maybe even hostile. You know that other firms are enthusiastically pursuing all possible alternatives. You also understand that this is the way it should be. There will be lots of mistakes and missteps. Those suspicious of business can always find the fools and bad guys. But history has shown that some of these fools and bad guys turn out to be right about some things, and nobody is right about everything. The system is always messy, but it works.

On the down side, yesterday's solution is often tomorrow's problem. Already we know that the zeal for biodiesel is destroying forests in Indonesia (converting to palm oil) and the solution to coal (i.e. oil) had its own problems. We recognize that we will never solve all our problems at the same time. We will solve our share and leave the rest to someone else. That is how it was, how it is and how it ever shall be. So do your part, do it right, plan for tomorrow but know that it is then that you will solve tomorrow's problems. The business of America is business and I suggest you all get subscriptions to "The Economist".

Posted by Jack at December 6, 2006 12:22 PM
Comment #197944

Gosh Jack. Aren’t you just thrilled that you are so much better and so much smarter than the average? I’m so happy for you I could bust!!

Posted by: womanmarine at December 6, 2006 12:51 PM
Comment #197945

Not smarter, but probably more traveled than most and better informed than those who read “The Nation”. I suppose I am about average for readers of “WSJ” and “The Economist”.

Posted by: Jack at December 6, 2006 12:56 PM
Comment #197946

Amen Jack…..I see it didn’t take long for the uninformed to chim in

Posted by: David at December 6, 2006 1:03 PM
Comment #197947

I don’t think there is a vast conspiracy against renewables and eneryg efficiency, either. Oh, I think the Cheney energy plan, which I read closely because I was working for a consulting company dealing with these issues, was a misguided affair, and the 1995 Energy Act was only marginally better, but they are the result of dinosaur thinking. As you say, venture capital is pouring into renewables etc. Any business could benefit from incorporating energy efficiency technologies and practices, many of which have short paybacks. And many industries use combined heat and power applications to get as much bang from the fuel buck as possible. There is huge money to be made here.

Instead of conspiracies, I prefer to think in terms of conflicting interests. But we do know that some big oil companies invest in renewables, though I’ve read they often spend as much advertising these actions. But I don’t care. If a company determines that marketing itself as green is good for business, I don’t see how that is bad. In fact, it helps change attitudes. On a certain level, the coolness factor of hybrids and the cars that are coming that rely much more on electricity than fuel is very important. If these things become status symbols, fine with me. Whatever works.


I will quibble with comparing The Nation to publications such as The Economist. Apples and oranges. A better comparison, I think, would be to the National Review.

I like The Wall Street Journal. Like the NYT, it’s a damn good newspaper.

Posted by: Trent at December 6, 2006 1:03 PM
Comment #197950

Jack, I do think it is important to read a wide range of material across the political spectrum. Unlike some here on both the left and the right, I don’t fear reading stuff I might disagree with and I don’t fear ideas. Maybe that’s why I don’t really get what I consider unrational fear of any idea that could be teased back to Marx. My first degree was in journalism, and the virtue of a “marketplace of ideas” is one I still take on faith.

Posted by: Trent at December 6, 2006 1:11 PM
Comment #197951

David: speaking for yourself are you?

Posted by: womanmarine at December 6, 2006 1:12 PM
Comment #197955


My issue is with excessive CORPORATE influence over GOVERNMENT policy, orienting that policy towards the owning few and not for the greatest number of AMERICANS. This has resulted in our governement of the people, by the people for the people becoming govt. of the company, by the executives, for the money.
I am pro-business not pro-corporation.
I am pro-people not pro-CEO.
There is a major difference in my uninformed chim.

Posted by: Dave1-20-2009 at December 6, 2006 1:23 PM
Comment #197958


Yes. Big government slows progress. You should be a conservative.


I used to read “Nation” but it is just too silly. I do not fear those ideas, they are just a waste of my time.

People trace too much to Marx (as we have discussed). Suffice to say, if Marx were alive today and he wandered in front of my speeding car, I would not apply the brakes.

Posted by: Jack at December 6, 2006 1:31 PM
Comment #197960

I don’t read much in the way of business or political material. I stick to science and news. You’d be amazed at the problems you can see coming when you go right to the experts.

To wit: as a guy with a degree in a broadcasting field, I was sent this thing for a podcast from this guy Chuck Schubin (I think that’s the name). He recently discussed something very interesting: why HDTVs just began to catch on after 2001.

It starts with the human eye’s acuity: 20/20 vision is the ability to distinguish one sixtieth of a degree (or one arcminute)of detail from what’s in front of you. In order for the picture to properly blend, you have to be far enough back that one pixel (short for picture element) takes up less than one arc minute.

That means that for a certain sized television, there is a certain correspondence between height and viewing distance from which you could resolve detail without getting distracted by the individual pixels. It works out to about 9 times the height of the television.

As long as television remained small, it wasn’t a problem. Trouble is, two things converged: the average viewing distance and the size of the televisions.

The average viewing distance for Americans is about nine feet away. When televisions tended to be small, visual acuity in comparison to pixel size was enough to blend them from that distance. In 2001, though, the size of the average television owned became large enough that the person sitting an average distance from the television began to notice the pixels.

Thus, the rise of HDTV. It happened earlier in Japan, as a matter of fact, since their average viewing distance is less, owing to their smaller rooms.

It’s this kind of emergent pattern that I think good legislators and policy makers should take note of, the stuff that comes up from the details. When we ignore such issues, we often make decisions that negatively impact citizens. Regulation should pay attention to issues like these. One reason why I think HDTV has been so slow to come out is the multiplicity of standards that were wedged into the ATSC standard as a whole. If they had just come flat out and said what was what, they could have avoided a great deal of the BS. That’s been one disadvantage of such a scientifically and technologically incurious and even hostile Congress and President: they don’t pick up on these important details.

Posted by: Stephen Daugherty at December 6, 2006 1:35 PM
Comment #197962


I have watched a few of the “hearings” on this and other issues. The proble stems from the fact that they don’t ask the right people the right questions. There is some bias there as to who they invite to testify at these things, and their lack of general knowledge leads them to ask the wrong questions. That’s the impression I got from watching some of them.

Posted by: womanmarine at December 6, 2006 2:09 PM
Comment #197968


What kind of legistlation would you have in mind?

Posted by: Jack at December 6, 2006 2:38 PM
Comment #197971


It’s funny, but I think the Wall Street Journal is the most biased rag in the country. Yes, it reports what business is doing very well. But anything else they give short shrift to.

Did you ever read an editorial in the Wall Street Journal that says something nice about workers?

If you are in business, you need to read the Wall Street Journal. But you should read something else to get other viewpoints.

Posted by: Paul Siegel at December 6, 2006 2:40 PM
Comment #197972

Jeez Jack-

You sure make it difficult to agree with you, even when I want to so badly. Such a simple point: those who write necessarily objective and practically applicable articles for the every day decision-maker are more accountable, and thus more relevent, than their brethren who write ideological articles for people to read in their spare time. OK. I’m with you, although there is no real revelation here. There are a bunch of practical and tangable reasons why this is the case.

“There are two sorts of prognosticators. Those who predict what will happen and those who have a hand it making it happen. The former are more entertaining; the latter more useful.”

This is where I get lost. How is writing an article about the market any more influential than writing a political editorial? Both deal with real life. Both are necessarily reactionary to current events (otherwise no one would be interested enough to read it). Both deal in taking a limited amount of facts and trying to paint a broad picture. Comparing the two directly seems uncalled for seeing as how politics (which includes questions about how to best promote free enterprise while preserving individual rights) is obviuosly much more complicated than the vast majority of analysis done in a solely bottom-line driven business context.

The simple truth is that writers are writers, and what they write is based on many factors. You don’t read the WSJ to figure out your view on alternative feuls, Jack. It is a great way to take the pulse of a company or industry so as to help you plan your day to day actions intelligently, but it does nothing to connect the dots outside of the narrow contexts in which they are designed for. Telling someone to develop their political ideology by reading the WSJ is like walking into a room, taking a poll to see what everyone is doing, then proposing that the best course of action is exactly what people are already doing.

One must take a step back from the day-to-day ebb and flow of business to get a comprehensive picture of how that ebb and flow actually affects their life, their economy as a whole, their future, and their society in general. This is where political philosophy and ethics come into play, and for that reason, this is also where things become less tangable. So what? That doesn’t mean it has any less merit than anything else. It just means that you won’t be able to definitively say whether it is “right” or “wrong” in a short period of time. It certainly does not mean that people will not subject it to the same levels of criticism. Often, these writings bring on more criticism than a WSJ article about the markets ever could. On the flip side, an Ann Coulter can get away with being wrong 95% of the time without being effectively ousted from the profession. Still, she is heavily (and rightfully) criticised.

My whole point here is that there is a need for both the WSJ and political ideology. I often find myself getting bogged down by my every day work, that I forget what is truly important. Reconciling our beliefs with our actions is exactly what humans have been trying to do for our recorded history through religion, etc. Why do you suddenly feel the need to buck this trend by saying that one need only focus on the every day concerns and let the chips fall where they may?

Maybe some of us care too deeply about the future than to leave everything up to the whims of the free market. While I agree that a free market can effectively and efficiently solve most economic issues, I disagree that we should be putting all of our societal eggs in that basket. People need perspective to know that their faith is not misplaced. It was nothing more than a reaction to the end results of a free market run amuck that created socialist ideology as we know it today. Instead of allowing the pendulum to swing violently back and forth, maybe a responsible society should promote a more proactive approach involving actively trying to reconcile the general with the specific. They go hand in hand. A direct comparison of “usefulness” is merely assumptive.

So while I will continue to read “The Economist”, I will certainly not stop reading blogs, and other political theory to keep myself from becoming arrogantly and thoughtlessly attached to any particular mode of thinking.

So Jack, I actually agree with most of your points above, but I cannot accept your analysis nor advice because it requires a conscious effort to limit myself. And I’m really not arrogant enough to believe that I’m going to be wiser by doing that. Yet the whole tone of this article seems to be that there are those who read for fun, and those, like Jack, who read to make a difference. All us mental peasants should be taking notes I suppose. Yet, strangely, I’ve yet to ever meet an extremely wealthy economist. And I can regularly find, on the same day, two completely contradicting stories on a given economic topic, sometimes even in the same publication. Hmmm. Credibility?

Posted by: Kevin23 at December 6, 2006 2:49 PM
Comment #197973


I am somewhat conservative on fiscal matters. I’ve been pay-as-you-go since about 1975. I flirted with Republicanism when Ford earned my respect for his self sacrifice in pardoning Nixon and I wasn’t very impressed with Carter as President. Having said that, I believe government exists to serve it’s people, and one of those ways is through an efficient capital market. Inefficiencies are created to both ensure that the wealthy don’t get ALL the money (those who have, get more; is a truism) and that businesses are regulated via protective measures designed to control corporate activities that are socially damaging.
I think we diverge strongly on at least these issues; progessive taxation is beneficial to society, and corporate profit is second to “the greater good”. Your threshold of what is “restrictive” is much lower than mine. You seem to view “progress” as “more profit”, I don’t.

Posted by: Dave1-20-2009 at December 6, 2006 2:56 PM
Comment #197974

Yes, we need to read a lot. I’m very conservative in this regard in that I worry that too many people get their information solely from the television or radio. Just for the sake of being polemic, I’ll say it’s easy for me to tell when I encounter someone who gets their information solely from talk radio. They have strong opinions based on a weak knowledge of the facts. People who know more typically have weaker opinions based on greater knowledge. That’s how it works. The more you understand the issues in any particular field, the more you are aware of what you don’t know.

Dogmatism is rarely impressive.

Posted by: Trent at December 6, 2006 2:56 PM
Comment #197977

“Amen Jack…..I see it didn’t take long for the uninformed to chim in”

The only comment above yours, David, was womanmarine’s. She simply took Jack’s words to be at least moderately arrogant. I agree. Does that make me somehow less informed about the subject matter as well? If so, I’m calling you out. I’ll bet we are at least equally informed on the subject…thus making you a liar. Since you’ve already demonstrated your willingness to blindly attack for the sake of attack, I see no good reason for you to decline now. Then again, I saw no reason for baseless attacks to begin with.

Posted by: Kevin23 at December 6, 2006 3:06 PM
Comment #197980

I have my own hypothesis regarding the role of business and government. It is not exactly germane to the discussion nor does it contain groundbreaking revelations but I have the bug to explain it so here’s goes!
Business and government are not in conflict with each other but it is more of a very dynamic tension that holds the economy up. It is the role of business to control costs, maximize gross income and, through the combination of the two, maximize profits. It is not the role or obligation of business to “serve the community”, or donate a portion of their profits back to the community (I often see signs in Target, for instance, saying “We donate %5 of our profits back to the community”. As a long time stock market investor who expects publicly traded companies to be TOTALLY devoted to the shareholder’s benefit, i am appalled by this!!) I expect business to, in the court of public opinion, fight any proposal that would increase costs (trans fats, minimum wage, you name it) or reduce profits directly (“excess” profits tax) (bad idea, by the way). They have the obligation (to the shareholders) to make their best case.
Government, providing the tension on the other end, has the obligation to have a more expanded view of what the costs of doing business are and charge accordingly through taxes (simplistic notion, i admit, but there is an aspect to it that is true). What if, for instance, we got the government out of the business of regulating the safety of food in restaurants and simply let the market place decide. E coli outbreak at taco bell? No problem!! People will just stop going there and the market place will solve the problem!! Illness? death? just stop eating there! Maybe expand that fear to all fast food restaurants. The problem with that is that those few taco bells are part of a huge chain (YUM ?) that would , in its entirety, be affected if it did not have the cover of a food safety program administered by government paid for by them THROUGH THEIR TAXES. Minimum wages are another good example. Why is it so surprising that a company like Wal-mart, an enterprise castigated for their low wages, comes out IN FAVOR of more intense regulation through an increase in the minimum wage?? They understand fully, that such an increase would raise the costs of their competitors and results in an increased flow of business to them!!!
Just as there is such a thing as private enterprise, there is also the notion of “public good”. I don’t expect private enterprise to take care of the public good; I expect government, on all levels, to do this. After all, isn’t government, at its most basic level, people chosen by people to oversee this public good?

Posted by: Charles Ross at December 6, 2006 3:42 PM
Comment #197981


Your ego is astounding.

The problem with ‘Business’ is not business itself, but the underhanded practices employed by a few. …not all, but a few.

This was brought to shocking clarity by the surfacing of the scandals from ENRON, Worldcom, Adelphia, etc. etc.

However, we must all understand that any corporate enitity is essentially going to see things and choose actions based on a rather narrow set of ideals. All those in the company will have retained their positions based on loyalty and efficacy and will be searching for the most expediant means to rise and be recognized. Only those companies with a self-created and energetic image of selling themselves both to themselves and to clients and investors as being green, responsible and ethical in their acctions and goals will maintain that image in the face of those within who are looking for fast and effective ways of benefitting the bottom line.

That’s the way it is.
Sometimes capitalist forces work against the interest of common sense and the greater good.

Posted by: RGF at December 6, 2006 4:04 PM
Comment #197983

David: speaking for yourself are you?

Posted by: womanmarine at December 6, 2006 01:12 PM

I know you are, but what am I???

Pleeaaasseee…playtime is over. next up is milk and cookies.

I think it is quite telling that you made the association that Jack was “speaking” to you…

Posted by: b0mbay at December 6, 2006 4:18 PM
Comment #197988


That made no sense.

Posted by: Kevin23 at December 6, 2006 4:44 PM
Comment #197990

The Wall Street Journal is a funny newspaper. It seems to be widely agreed that the news content is pretty fair and balanced, but the op/ed page is shamelessly biased and manipulative (more on that shortly).

You have to pay to read the news content, but I trust liberals who say it’s pretty fair. I read the op-ed content regularly on, which is free. Sometimes they make interesting arguments, sometimes it is just fun to see their tricks. One of their favorite tricks is to give an op-ed piece a tagline/subtitle that contradicts what the person is actually saying.

I remember one where there was a guy bashing John Kerry. The tagline (roughly) was “I served on the same boat as John Kerry. He isn’t fit to serve.” A reasonable person would assume that this gentleman knew and worked with John Kerry, right? Wrong.

While he did in literal sense serve “on the same boat”, they weren’t on the boat at the same time! This was clear if you read the full text. Most people of course, would just look at the tagline and think “Ah, here’s a guy who worked with Kerry and thinks he’s a jerk.”

The NYT has a totally opposite business strategy: They give away the news and charge for opinion. I think WSJ has a better strategy. If you are going to churn out propaganda, you should give it away.

Posted by: Woody Mena at December 6, 2006 5:19 PM
Comment #197996


“I often see signs in Target, for instance, saying “We donate %5 of our profits back to the community”

You do understand the marketing side of this? Large chains don’t feel so large if they become “part of the community”. If they can give away 5% but increase overall gross of the store by 10-20% where’s the harm. Also don’t forget local regulations which may have dictating the need for this in order to get permits to lacate there.

Posted by: Keith at December 6, 2006 5:46 PM
Comment #197999

I think Charles Ross has the model right: dynamic tension. The trick with business is that it’s in the game for its own gain. This is the way these institutions are set up. When confronted with legislation on issues, their response is often to work things out for their own benefit. Ideally, these people would think broadly in terms of their interests, and take a moral position.

However, the ideal does not always take place.

In the case of HDTV, the plethora of standards, while a gimmee to those who don’t want to have to make up their minds as to what to broadcast, makes it more complicated to create the electronics and software for dealing with all this. Compromise should have been the name of the game: there should have been fewer, better-defined standards. Government, in issues where it has such power, should not simply punt the responsiblity for deciding things to business.

It should also have a firmer hand than it’s had under the Republicans. I don’t know how many deadlines they’ve let slip on this matter. By not putting this on a defined schedule with greater commitment, they’ve introduced a level of uncertainty for both broadcasters and electronics makers- the former on account of the lack of penetration for the devices (no use broadcasting HD content when HD sets are scarce), the latter on account of the lack of content (demand for HD sets depends on being confident that you’ll have HD to receive)

The good news is that all new sets will soon be capable of receiving ATSC signals, though not all will be capable of outputing full HD splendor. The bad news is that this took so long.

This has added expense for broadcasters, since they’ve had to broadcast Digital and Analog (the signal you receive on good old fashion television at the same time)

By not getting things sorted out sooner, The Federal government has increased costs for the businesses, as well as increasing risk. So, the lesson here is that when the Fed set the standards, they should be firm enough about them to actually get these kinds of things straightened out. Trying to please everybody generally pleases nobody.

Posted by: Stephen Daugherty at December 6, 2006 5:50 PM
Comment #198001

Stephen Daugherty,

This is TV you’re talking about! To me it makes as much sense for the government to be involved with HDTV standards as it does for it to get involved in baseball!

Posted by: Trent at December 6, 2006 6:02 PM
Comment #198004


Yes. Big government slows progress. You should be a conservative.

Posted by: Jack


You “wrote off” a very good post by Dave with this dismissive quip. You’ve disregarded major facts about Laissez Faire economies and Democracy. There is NO SUCH THING as a “free market”. Markets require governments and the best form of government is democracy not a Corporatacry or Fascism. The last time true free markets existed we lived in caves. There IS something called democracy and in a democracy the people have a right to decide the rules of business….and corporations, CEO’s and their money SHOULD not undermine Democracy. They should be subservient to it.

So do you think in a free market system the CEO’s aren’t gonna take advantage of profits they can make via government funded corporate welfare? Or will their honesty and integrity prevent them from doing so? Or do we have to democratically decide what limits we want on corporations and democratically decide the rules of business.

Because if you’re telling me that We the People should not interfere with running of business in our country then you are telling me that reading the Economist and the WSJ has taught you NOTHING of democracy and free markets and dare I say fascism.

Don’t you think it’s the responsibility of WE THE PEOPLE to call for laws and policies that keep the markets fair and prevent corporate welfare?

Don’t you understand that their is no such thing as free markets or Laissez Faire economies because such economies will always seek to find profits in governmental largess, government favors, government policy, government pork and government contracts?

Do you understand this is a major contradiction of modern conservative economic thought…that has just been clearly demonstrated by 6 years of conservative rule with resultant booming government spending, booming debts, booming corporate welfare and an economy on the brink because of these policies?

You’re the one so well informed yet you tell us to be a conservative. Does that mean voting Democrat or Republican.
I know at least when we had a democratic President the budget was far more sane. Since we’ve had 6 years of Republicanism which has busted the budget to all extremes and given away yours and my tax dollars to war profiteers, the drug companies, the insurance industry and the oil companies and those profits had little to do with fair markets and a lot to do with undermining democracy.

Here’s the question for you ….do you believe the economic system of Laissez Faire capitalism should be subservient to democracy of, by and for the people

You’re right it ‘s not us against them…its a political system Democracy against an economic system that left to its own will clearly subvert Democracy.

So what’s the WSJ say about all this?

Posted by: muirgeo at December 6, 2006 6:12 PM
Comment #198020


Re prognosticators - I didn’t write clearly enough. I was not talking about the journalists, but rather their sources and their customers.

Re point of view - You are right that you cannot get your values from WSJ or from any news source.

Re the free market - I always repeat that the free market includes democracy, rule of law and market mechanism. The three are connected. You cannot have a market economy w/o rule of law, since you cannot create the predictability and respect for agreements. Thus, free market depends on government. But government can smother market forces if it starts interfering too much in the process. You need democracy also to maintain the market. Otherwise it will tend toward consolidation and the government will protect the status quo too much. The three need to be simultaneous. It is possible to have a market w/o democracy if you have liberty and rule of law, but such a system will be unstable moving either to tyranny or democracy.

You should trust the market economy, since there really isn’t anything better in the long run. There are market failures (just as there are failures of democracy) that must be corrected by extralegal mechanisms. I dislike communism with a passion, but I recognize that they did a good thing (although at very high cost) when they destroyed the hold of big landowners. Could I ever advocate that? No. But it is the kind of extreme measure you sometimes get and sometimes need.

BTW - I do not consider myself MODERATELY arrogant. If you are going to do something, do it right.


Taxes should raise revenue and leave the market alone as much as possible. I personally break with most of my party in advocating taxes on gasoline, but generally we need to be careful with engineering. American corporate taxes are among the very highest in the developed world. It might be good to lower that a bit. If you create a very progressive tax system with high rates, you also need a lot of complication and exceptions. The example I give is that a guy who harvests a forest he has been working on for 30 years may make $1 million in one year and then not make any more for another 30 years.


Yes. The regulated eventually capture the regulators. Government can be a dangerous weapon. Do not put it in the hands of your friends unless you are prepared to see it wielded by your enemies.


See above re arrogance. The big scandals you mentioned were uncovered first by the market. The free market does not always produce perfect results, but it is self correcting. When you get a monumental market failure, you get ENRON. When you get monumental government failure you get the Holocaust.


Setting standard is good, but you have to be careful not to do it too soon or in an inappropriate way. Remember QWERTY.


Read some of the things I write about the free market. Actually I wrote a little of it up above. A longer article is here. After you get to know me better, you may have a better appreciation for my humor(s).

Posted by: Jack at December 6, 2006 8:12 PM
Comment #198033


So we agree, progessive taxation is a good idea. And, that like any tax structure, it needs to be done carefully, with fairness, behavioral incentives and revenue adequacy in mind. We also agree that a large amount of the current complexity needs to be pared down. Finding loopholes for the wealty is a multi billion dollar business that costs us hundreds of billions in what would otherwise be tax cuts for the middle classes. As for your $30MM once every 30 years, there already is income averaging in US tax code.

Posted by: Dave1-20-2009 at December 6, 2006 8:58 PM
Comment #198042


Re: point of view - glad you agree. Did I at least restate your point properly?

Re: prognosticators - does this mean you agree with me about economists?

Re: free market - Of course you are right that the three go hand in hand. What I really meant to imply was that factors that cause market crashes and recession/depression scenarios are always in existence. I just read yesterday in the Times that the Federal Reserve Board, based on the rhetoric coming from the chairman as of late, has become more concerned about quelling foreign banks’ concerns about the value of their dollar holdings than it is about controlling inflation domestically. Now I don’t know exactly HOW true that is, but it seems to be a valid concern. Our trade deficit is starting to make its presence felt politically as well.

This, I believe, is a valid time for the public to demand their leaders at least investigate. In other words, their needs to be a certain degree of accountability to government inherent in the system. How much involvement is, of course, left to the people and their leaders. I abhor communism in its corrupted modern form as much as anyone, but I don’t mind the government skimming off the top at times when an industry is booming so long as it is done responsibly and for the clear benefit of the society as a whole. Another reason I like the idea of a consumption tax coupled with extraction taxes on finite resources. The rates depend on need…pay as you go is the most fiscally responsible way of doing important business.

Sometimes deregulation is the perfect shot in the arm for an economy. But other times a government figures, rightly I think, that the best way to control any industry is to attack its bottom line. That is the basis around which business works, so that is exactly where meaningful regulation should aim. Now I will agree every time that taxing tobacco companies to pay for anti-smoking ads is insane governmental involvement. But I think that when you have massive energy scandals and a market dominated by a small oligarchy of companies, the government should be able to apply a profits tax until reasonable fears subside. It should be clear that the taxes are not permanent, and then there is a huge amount of independent incentive on the part of companies to ease the minds of consumers who are now reading about the problem on several different fronts in the newspapers.

These are a few small real world examples…hopefully you get the idea well enough.

Posted by: Kevin23 at December 6, 2006 9:33 PM
Comment #198045
American corporate taxes are among the very highest in the developed world.

By the same token, aren’t their incomes and CEO salaries the very highest?

Posted by: womanmarine at December 6, 2006 9:44 PM
Comment #198060

Corporations provide people with jobs. You are tearing down people’s hard work. Taxes should take away 10% of everybody’s paycheck. Taxing the wealthy more than the poor is communism.

Imagine that if you had a business degree and were good at it and had taken your business to the corporate level and the govt allowed you to do so. You are very successful. Then a bunch of people demand you go out of business?

Wasn’t that fun?

Posted by: stubborn conservative at December 6, 2006 10:21 PM
Comment #198078


I believe in progressive taxation, but not very steep. I also believe in earned income credits and credits for children and tuition. My goal, however, is not income redistribution. It is just good public policy to tax where the money is. We should also keep government small so that it does not cost so much.

I don’t think we have income averaging anymore, BTW, but I don’t really know.


We may agree on the idea, but probably not all the details and the mix. I am afraid that government intervention is like alcohol: makes you feel great, but too much gives you a headache and constant consumption may kill you.


Yes. Our CEO salaries are generally higher, which would indicate that high corporate taxation doesn’t hold down CEO salaries.

I think that the lowest corporate taxes these days are in Ireland. We Americans are a little behind the curve on this one.

Posted by: Jack at December 6, 2006 11:09 PM
Comment #198115

If you’re just joking, don’t take this the wrong way: All television standards are set by the government, the FCC more specifically. That’s part of the control they have over the use of the broadcast waves.

The dominant specification at the moment is known as the National Television Standards Committee, or NTSC for short. You’ll see this on the specs for video recorders, cameras, and TVs.

NTSC has the virtue of being simple: about 640 by 480 pixels, with interlaced scanning at 60Hz. If you’re counting whole frames, that’s about 30 a second. That’s the only NTSC standard for broadcast.

ATSC is anything but. You have three main resolutions: 480, 720, and 1080. There’s two flavors of video, in terms of the scanning: progressive and interlaced. Then there’s frame (or field) rate. It’s all over the place.

Ultimately, its up to the government to decide what goes out, what qualifies. If they had been clearer earlier, and had narrowed down what was acceptable, we might have seen HD much faster.

Posted by: Stephen Daugherty at December 7, 2006 1:40 AM
Comment #198118

It won’t be to much longer till corporations will no longer have to buy politicians. They will produce them. In the not to distant future, ad agencies will be the most powerful corporations.

Posted by: jlw at December 7, 2006 2:06 AM
Comment #198122

Let’s see: Enron, Junk Bonds, Arbitrage, Land Flips, Savings and loan collapse. Yep, the business press is so prescient it’s scary (dripping sarcasm).

Posted by: gergle at December 7, 2006 5:50 AM
Comment #198128

Stephen D.,

Yeah, I know. But we’ve moved into an era in which most content is not broadcast anymore. Ideally, I think such standards should just shake themselves out as video tape standards did. I haven’t really followed the debate over HDTV standards, but if the Feds have taken a mostly hands off approach, I don’t have a problem with that.

And nothing personal. I was half joking.

Posted by: Trent at December 7, 2006 7:54 AM
Comment #198130


You never get pefect. Most predictions will be wrong most of the time. My standard is simpler. If you have to make decisions based on what you read, where will you go for that information.

Stephen makes a good point re science, but science is limited by it practical applications and its market acceptance. Many things are scientifically possible, but practically clumsy or nobody wants them.

Look at all the futuristic predictions of the 1950s. Most of those things did not happen. Others that nobody predicted did (for example, how we use computers is totally different than anyone predicted back then).

Science does not make much sense outside its cultural context. Scientists hate it when I say that, but it is true. Business creates the context.

The TV is an excellent example. TV was invented back in the 1920s. Politicans were happy enough with radio and saw no need for it. Consumers didn’t want it because there (obviously) was nothing to watch. It caught on big when cultural conditions were right about 20 years later. Science never would have predicted this. Science was ready in 1926.

Posted by: Jack at December 7, 2006 9:04 AM
Comment #198134

“It’s funny, but I think the Wall Street Journal is the most biased rag in the country.”

Wow, I actually chuckled out loud on that one.

Posted by: Matt at December 7, 2006 9:37 AM
Comment #198141


Why do you think that is funny? I am serious about the question. If you think it is not true, it is just a strong incorrect opinion. If you think it is true, it is just an opinion too. It is not amusing in any way. It does not have a clever twist. There is no use of irony etc.

Posted by: Jack at December 7, 2006 10:03 AM
Comment #198148


You are right on about the attitudes of people toward business. This started when the libs started attacking corporate entities with the class warfare thing. It has stuck because liberals know that every worker out there has at one time or another either been jealous of their boss, or has come in some type of conflict with him. After all, all bosses are jerks sometimes. Powerful liberals feed and gorge themselves upon the fat of the Corporations, and then pass out the baby bottle of skim milk, while singing a lullaby of discontent keeping baby libs unhappy about their jobs and financial situations. The fact is, to be a lib, you have to be “woe is me”. If you are not a victim, why would anyone support the Democratic Party? Corporations are simply the targets to keep people unhappy about their own lives, so that they will support the Party. Sorry, Jack, that is not likely to change any time soon. It is too profitable for Democrats, Inc.!!!


Posted by: JD at December 7, 2006 11:49 AM
Comment #198155

While most content is not literally received by broadcast anymore, they nonetheless work off of the Broadcast standards. A way to look at this is that VHS, DVD, HD-DVD, and Blu-Ray are all storage media of a certain format, using certain technology, but each one has to conform to some kind of standard for what kind of signal the TV gets from the player, receiver, or whatever source. Because of this, VHS and DVD, as video formats, are NTSC based in the signal they create. In fact, you’ll see it right on your DVD box. Video formats determine how the content is stored, VHS doing it with an analog signal magnetically stored on tape, DVD doing it with compressed format on a laser-read optical disc in digital binary code, and Blu Ray and HD-DVD doing the same with a laser of smaller wavelength, which can therefore create tighter, tracks for greater information density. Regardless of that, what each format translates to, natively, is an NTSC and an ATSC signal that the TV’s electronics knows how to translate into a picture.

The trick here is that for a home video, satellite, cable, or broadcast feed to have any hope of displaying on an HDTV, both the content provider and those manufacturing the sets and displays have to know what signal to create and to interpret, so the damn thing actually displays on the TV. For example, some TVs run 1080 progressive, which is nice if you can get it, but you have to have a format that outputs this resolution to see the full benefit of it. Similarly, 1080 progressive players aren’t going to get much extra mileage competing against 1080 interlaced sources, if the sets they’re displaying on can’t do better than 1080 interlace.

The FCC’s involvement is crucial, unlike any involvement with baseball. Baseball can continue without federal help. However, if the government doesn’t establish that signal broadcasting it is, you don’t see the game on television, regardless of the format.

Posted by: Stephen Daugherty at December 7, 2006 12:43 PM
Comment #198157

On that note, let me inform you of a fact: TV didn’t take off until they had resolved the patent dispute on who actually owned it. It was because some RCA scientist couldn’t keep his mitts off the real inventor’s work, and RCA backed him. They could have settled, but in trying to get everything, nobody got anything until after the war.

Business does not get conducted in a vacuum. Supply and Demand are not the only things that can get in the way of a technology’s success.

Posted by: Stephen Daugherty at December 7, 2006 12:49 PM
Comment #198158

Stephen D.,

Honestly, this stuff barely blips on my radar! :)

Posted by: Tremt at December 7, 2006 1:12 PM
Comment #198166

I guess what it boils down to is that the government uses its power in this case to standardize how television signals are sent and recieved, so that there can be a stable basis for a television market.

The Government under Bush has been going this way and that trying to throw together a grab bag of what people want, only to end up slowing the process by making compliance with the standards as a whole more technically difficult. By being lax about enforcing deadlines, they’ve allowed the bottomline oriented broadcasters and electronics makers to drag their feet on making the transition, which means that HDTVs haven’t sold that much until recently, and content hasn’t been that forthcoming to match it.

If the transition were better managed, we’d see electronics makers and content providers figuring the costs into their plans, rather than getting conservative about it, and dawdling on the soon to be obselete formats and devices.

If our government is to take regulatory roles, catering to the whims of business will not necessarily be good for business in general. Sometimes, business needs to have the band-aid ripped off, to know what they have to do and when they have to do it, and plan accordingly. If they know that the Government’s not going to coddle them, they’ll know its in their interests to expedite whatever changes are necessary.

Government should exercise its power with due concern for the needs of business, but it should also wield its power with a firm enough hand that changes in policy do not become muddled, ineffective messes. Government shouldn’t be afraid to govern, to mandate things. It shouldn’t be done arrogantly, but neither should it be done negligently.

Posted by: Stephen Daugherty at December 7, 2006 2:04 PM
Comment #198168


The problem is that government does not have the knowledge to properly regulate new developments. It is by nature status quo and much more likely to be slowing new developments than speeding them along. Government does not have the right or the capacity to govern with a firm hand on flexible developments.

There is a lot government should do in the nature of rule of law. It should not try to manage businesses or pick winners and losers.

The operative metaphore is that government should build the road and establish the basic laws, but within those laws it has no business deciding who gets to use the road.

Business is the engine of wealth creation. The business of America IS business and government’s business is to serve that.

A patent dispute, BTW, would be part of the business press more than anything else.

Posted by: Jack at December 7, 2006 2:23 PM
Comment #198171

Stephen D.,

Yeah, but I don’t care if HDTV standards are delayed! Seriously, this is TV! So what! “It just doesn’t matter,” as Bill Murray chanted on my obsolete, rinky dink, 31’ idiot box the other day.

I’m covering my ears with my hands and chanting like Murray as I leave the field. …

Posted by: Trent at December 7, 2006 2:57 PM
Comment #198172

The business of America is business.

Jack, is that why politicians wear business suits? My business is NOT business. It’s to lead a happy life, to take care of my daughter and my loved ones, to develop intellectually and spiritually as much as I can before I croak, etc. Insofar as I can manage, I try to make my avocation my vocation, but that’s a means to an end, not the end itself.

And before you say I can’t do some of these things without a job — I know that! “Means to an end, means to an end” — that just replaced Bill Murray’s mantra for the rest of this snowy day.

Posted by: Trent at December 7, 2006 3:04 PM
Comment #198174


You can live the good life because of business and commerce. Even if you do not want that HDTV, everything that comes to you that you do not personally hunt, fish or gather is the product of business (and your gun, rod or gathering basket came to you via business). It is so ubiquitous that we pay it no mind.

Government lives off business too. It is the energy source for everything else in society.

I am not making an argument that we do not need & want other things. It is more a Maslow’s hierarchy proposition. If business is supplying society’s basic needs, it can think about other things. You cannot be self actualized unless you have satisfied the homeostasis need, either as an individual or as a society.

Posted by: Jack at December 7, 2006 3:21 PM
Comment #198175


Ditto. Business is a means to an end. The end is to live a happy and fulfilling life and to support your offspring to give them the greatest chance to do the same. An oganized system of creating of wealth is nothing more than putting order to chaos. Money does not equal happiness anywhere but the world of business. There are great correlations, but “but for” causal connection.

Jack, come on now. I know you’ve been brushing up on your economic theory lately (as evidenced by the post topics and anti Marxist sentiments therein), but there is no need to pretend that we care more about the Amercian way than we do about being human. When I kiss my kids every night, I rarely think about how much money they’ll be able to make one day. I merely am thankful that they make me so happy and proud by just existing.

Posted by: Kevin23 at December 7, 2006 3:29 PM
Comment #198177

Abraham Maslow’s pyramid, Jack? Wow. You really are dusting off the old books, eh? I remember learning about that pyramid in 8th grade. Sorry for the nostalgia.

Posted by: Kevin23 at December 7, 2006 3:31 PM
Comment #198191

If I’m trying to evaluate the governance of our nation I would not look to a business journal as my primary source of information. Capitalism’s Concentration of wealth and its influence on legislation can be one of the greatest threats to a democracy.
Also, business journals are primarily reporting historical data (the last month,quarter or year). This data is then disected, analyzed and interpreted for the reader. Then the prognasticators and economists write their opinions. How is their opinion any more or less valuable than a political opinion?
Business journals are only one of many sources that should be considered when evaluating the governance of our nation. Other journals can be much more visionary or forward thinking [scientific, medical,environmental, etc.

Posted by: Viv at December 7, 2006 4:13 PM
Comment #198205

Jack, it’s all perspective. My point of view doesn’t mean I think the stuff around me magically appeared.

There are many ways to look at a country or a world. It is arbitrary to insist that only one lens be used. One of my friends studied economics in college. For awhile, she insisted that everything — and I mean everything, including love, generosity, hate — should be understood using the economic theories she had studied. And, of course, there is a certain validity to that point of view, no matter how cold or reductionist it may be. Other points of view lead to richer understandings, imo.

I realize, Jack, that you may not be guilty of this species of dogmatism. I only intend to illustrate how we view things is heavily influenced by perspective, and how arbitrary it can be to insist on only one perspective.

Posted by: Trent at December 7, 2006 4:54 PM
Comment #198207


I do not think you can find a better general interest magazine in the English language than “The Economist”. It should not be the only thing you read, but it is a very good start.

The reason, as I stated, to trust business oriented publications is that they tend to be more tethered to reality. I was thinking specifically about alternative fuels. I have been hearing about the alternative fuels just around the corner since 1973. When they really start becoming viable, you read about people & firms investing in them.

I had exactly this experience with solar power. I own some land far from utilities. People say, “oh you could use wind/solar.” When you really look into buying, maintaining and depending on these things, you stop talking about them so expansively.

It is an easy way to quiet somebody giving you advice to buy something to just ask, “and how much do you own.”


You may have learned about Maslow in 8th grade, but it is a more important concept than 8th graders can figure out. Some people are willing and able to live in voluntary poverty, but not many. When most people say they do not care about money, it is because they have enough or they have a source that they do not fully understand. Your 8th grader is like that. So are most sophomores.

It is an old tune. Think of all those Romantic era writers: Byron, Shelley etc. They hated money, greed and capitalism BECAUSE the inherited their money and didn’t have to think about it.

I never said that money equals happiness. I said that business supplies the power on which other things run. It is a simple tautology, but one that people often forget. Government cannot give you anything unless it takes it from somebody else, and where does that person get it?

Posted by: Jack at December 7, 2006 5:02 PM
Comment #198212

I do not think you can find a better general interest magazine in the English language than “The Economist.”

Jack, this statement of yours will serve to develop and illustrate my point about perspective. You, as an MBA, are interested in economics and economic news. Because of your perspective, you value The Economist more than other general interest magazines. But instead of saying that, you claim it is the best general interest magazine in English. As a longtime student of literature, I would not call The Economist the best general interest magazine. I like other magazines better because of my perspective, but I’m not going to claim that my preference is intrinsically superior than yours.

A mistake we often make is to assume that our own point of view is universal or should be.

Consider the sublime. Is that cliff soaring thousands of feet straight up sublime? Or is the sublime a psychological state that viewing the cliff may not produce in everyone?

Posted by: Trent at December 7, 2006 5:27 PM
Comment #198216


That is my opinion about “The Economist”. I am comparing it to things like “Time”, “Newsweek” etc. Even though it has a business perspective, it has much better coverage of arts and science than those others. “The Economist” also has a clever way of writing lacking in others.

I do not work for them or own stock, BTW. I just think that if I could read only one magazine every week, that would be the one. In actual fact, of course, I read others too.

As long as we (I) am talking about the best, the best cliffs are Yosemite falls(seen from half way up to glacier point), Grand Canyon (north rim) and Geiranger fjord. But I assume you might also want to see other cliffs too.

Posted by: Jack at December 7, 2006 5:42 PM
Comment #198217

Jack, fair enough. I won’t go out of my way to defend Time or Newsweek. I do like Harper’s and Atlantic Monthly quite a bit. And I do like The Economist though I don’t pick it up as regularly as some others.

Sorry about the lecturing tone; it’s a bad habit I sometimes don’t resist.

Posted by: Trent at December 7, 2006 5:53 PM
Comment #198221

I suppose this smug, self-satisfied post is supposed to pass for intelligent discourse. I looked back to see your post on how we will so miss George Bush when we don’t have him to kick around any more, and I thought of this little nugget about the bipartisan Iraq task force report:

“WASHINGTON - The Bush administration routinely has underreported the level of violence in Iraq in order to disguise its policy failings, the Iraq Study Group report said Wednesday.”

If this is the kind of person your careful reading of business news lets slip under the radar without your excoriating him, then I don’t think much of your sources or your ability to assess what is going on. These guys are business men, pure and simple, and they have proven stupid, cynical, and corrupt at every turn.

Posted by: mental wimp at December 7, 2006 5:57 PM
Comment #198231


It evidently does pass for intelligent discourse, otherwise you would not so frequently scorch us ordinary guys with your sagacity.

Actually, if you want to see what I read (besides magazine) you can click on the sources I post most weeks, as you obviously did this week.


It is our jobs to lecture each others.

Posted by: Jack at December 7, 2006 6:31 PM
Comment #198237


You talk about “business” alot here as the “nexus” of our lives. Do you define “business” as economic activities? Or do you define “business” as the entities that perform the economic transactions, services, manufacturings, etc…? Transactions do not require money.

Posted by: Dave1-20-2009 at December 7, 2006 6:46 PM
Comment #198239


In retrospect, I think I had a pretty good handle on Maslow from my 8th grade studies. I haven’t thought about it in almost 20 years, yet I remembered the general concept….although I did look it up just now to be sure. But don’t sell our youth short. Sometimes they know more than they grasp more than they let on. I’m often surprised by the intelligence of the youth. Of course, I’m also often surprised by their ignorance as well. But give them some credit….it is a much more complex world today than ever before, yet people aren’t jumping out of windows in record numbers.

So back to the point. Maslow’s idea is that a person worried about food and shelter, for example, is not concerned about things like freedom of speech. No problems there. But that doesn’t translate well to your point about economics in America. I still maintain that we work to live, not the other way around. If the world were to become devoid of humanity tomorrow, there would be very little, if any, incentive to make money to support our families. Personal bonds are under the concept of money in the pyramid. Developing and maintaining those bonds then leads to feeding them, sheltering them, etc.

Posted by: Kevin23 at December 7, 2006 6:57 PM
Comment #198241

I should have added to the very last line: “impressing them.”

Posted by: Kevin23 at December 7, 2006 7:03 PM
Comment #198248


I agree that we do not live to work. I am only pointing out that if we do not produce the basics to keep us alive we will neither work nor live.

I am thinking of business in the very broad sense of what we do to make a living in relation to others. If you live on a self sufficient farm, you probably are often exempt. Otherwise not.

Posted by: Jack at December 7, 2006 7:30 PM
Comment #198252

Many who champion corporate capitalism also champion the cause of individual rights over collective rights. Many of them believe that workers should not have a right to unite their individual rights with others in a union to collectively bargain with their employer for better pay, working conditions, etc. The individual worker should do this on his or her own and if unsatisfied with the results can seek employment elsewhere.

A corporation is a union. It has individual members which are share holders rather than workers. It has a CEO rather than a union president. Instead of a business agent which is a go between the workers of a local and the local contractors, there are stock brokers which are a sort of go between the individual share holders and the corporation.

A corporation may have seven factories in seven different American towns. These factories may be the life blood of those towns and the corporation may play a major role in the civic culture of those towns and prowd of the role that they have. Individual share holders acting as a collective can tell the corporation that they feel that the corporation can best serve their needs by closing those factories abandoning the towns and relocating in a foreign land where labor is cheaper and profits can be improved for each individual in the collective. The individuals of such a collective can use their power over the corporation to nulify the individual rights of a businessman who is competing against the corporation. There are many business tactics which while seeming to be unfair, are not illegal. That is why we have free trade rather than fair trade. Many of those individuals are very vocal when proclaiming their patriotism for their country. ” Ask not what your country can do for you but what you can do for your country” are just meaningless words to corporations and many of their share holders.

Posted by: jlw at December 7, 2006 8:33 PM
Comment #198263

Free is an easier concept than fair.

I bet if you and I talked for a few minutes and compared scenarios, we would agree almost all the time whether or not which represented freedom, but we would have a real hard time agreeing whether or not something was fair.

Let me give you a concrete labor example. I believe in firing some people. Whenever I get to a new operation, I fire a few people. I do not do it to be cruel, but rather to be just. Most managers avoid firing people and that leave malingerers on the payroll. I firmly believe that it is unfair to allow lazy or incompetent employees to remain on the payroll. The people getting fired never think it is fair. They always say things like, “you are making new standards” or “nobody has ever wanted that kind of thing before.”

I believe workers have a right to unionize, but they do not have the right to impose their union on others workers.

Returning to the unfair, it is unfair to force someone to stay in business in a particular place if he is losing money doing it.

Fair trade is one of the hardest concepts of all. It usually means protectionism. The seller usually thinks he is getting too little and the buyer often thinks he is paying too much.

I think I used the example before, but let me use it again. I own a forest. Some years ago, you could make decent money on a first thinning. Now prices are low. Do you think we should be able to charge the old price (adjusted for inflation)? If cellulous ethanol becomes feasible, we will probably be able to sell for higher prices. Should we accept (demand) lower prices for our products?

Posted by: Jack at December 7, 2006 9:44 PM
Comment #198278

“I believe that workers have a right to unionize, but they do not have the right to impose their union on other workers.”

So,70% of the workers of a particular company vote to join a union. They negotiate and gain better pay and or benefits and or better working conditions. The other 30% can accrue the benefits gained by the union workers without acknowledging the union or paying tribute to it or do they have the right to continue to work at the reduced level of pay and benefits.

Are you saying that workers should not be allowed to form a union unless 100% rather than 51% of them vote to do so? If a company was in financial difficulty and ask the union to renegotiate the contract and give concessions to the company and if 51% of the workers vote to do so, should the new contract be binding even though 49% of the workers think it is a bad deal?

Since you ignored my comparison of unions and corporations, I am assuming that you think there is no comparison. I am also assuming that you think that if a majority of stock holders impose their will on a corporation to increase the value of their stock, this is fair for the stock holders and whether or not it is fair to the workers, their communities and the country has no bearing what so ever on the decision.

Posted by: jlw at December 7, 2006 11:46 PM
Comment #198282


People should have the right to work. Workers can join any legal organization they want, but the union doesn’t represent the workers unless more than half of them vote for it. If they cannot persuade others to join, too bad.

I do not think there is a valid comparison between the union and the firm re membership. Shareholders can sell at any time w/o significant costs. Selling shares is the primary way individual affect the firm. Most workers do not quit their jobs, get another the same day and maybe come back to work at the same place a few months later.

You should also recall that the distinction between workers & managment and owners is blurred today and most American households own stock. I think that is one reason unions are less popular than they were. Unions have trouble with complex relationships. They thrive when there are only a few classes of people and most of the distinctions are based on seniority. It is kind of an old fashioned system.

Re “fair” you have to define that a bit closer. Do you think my getting rid of some workers is fair? I do. BTW - I do not get more money for doing that. I do it only because it is the right thing to do.

Posted by: Jack at December 8, 2006 12:41 AM
Comment #198293

Government must keep up with new developments, and if it lacks the knowledge, it can ask people to inform them of the facts.

Government should not manage business, nor should it pick winners or losers. However, it should regulate business behavior to prevent chronic problems from putting a drag on the system. When a stockbroker sells people stock for companies not because they are a good investment, but because their company holds the debts of that company, they have a conflict of interest. Now, it might add to a financing company’s bottom line in the short term to be able to both finance debt and sell stock in the same companies, but neither the investors they serve, nor the investors in their own company are served by having one company do both in the long term. Now, the Republicans in charge currently would tell us that such regulations interfere with the free market, but what good is a free market if it doesn’t set prices in a way that reflects the reality of the situation?

What you’re missing here is the tautological abstractness of the statement “the business of business is business”. It neglects the fact that Business in society is there to perform certain functions beyond just making money for themselves. There is something they must do in others self-interest to earn the money they seek in their own self-interest.

Posted by: Stephen Daugherty at December 8, 2006 9:21 AM
Comment #198294


Government should regulate, but lightly. It can ask people to inform about the facts, but the decision makers still are generalists. Experts in science and tech often cannot explain their ideas very well. Their lack of communications skills is legendary. Beyond that, they may not understand the implications of their own work. Technologies are often put to different uses than the inventor envisioned. Software developers even try to take advantage of this.

You and I have a differnce not of goals, but of methods. I do not trust bureaucrats to decide on innovation. I like decision making to be nearer to responsibility.

We sometimes cannot have the elegance of theoretical system.

As I mentioned, I am in the process of reorganizing an operation. There are many points of overlapping responsibility. It does not make sense on a chart, but it works. The market is like that. In theory, we could have a rational system where wise men decide what is best. In fact, such a system cannot work and besides there is a shortage of wise men.

Posted by: Jack at December 8, 2006 9:49 AM
Comment #198316


I think that describing government’s role in business as light regulation is missing the point of such regulation. There is much social harm that can come of unrestrained capitalism, a fact recognized early in the history of the country. As you rightly observe, workers cannot easily slip in and out of jobs the way investors can slip in and out of ownership. Large businesses and extremely wealthy individuals can and will use their disproportionate economic power to increase their own wealth at the expense of the common person. Unless you view the only social good as increasing wealth, then fairly strong regulation of the behavior of economic interests in a capitalist system needs to be done. Light regulation has led inevitably to major social problems, as witnessed by the more recent spate of deregulation in our history: rampant fraud and abuse by corporate executives, the defunding of pensions for huge employee groups, the dislocation of workers, the devastation of US manufacturing, decreasing statndard of living for the vast majority, and the increased despoiling of the environment. As you have argued, at least this last is now better than it has been for a long time in history, but that is because of pretty heavy regulations regarding what business can pump into our environment.

That said, this (what I would call pretty tight) regulation should be done only to the extent it prevents problems. Your excellent point is that over-regulation can choke an industry, making it less light on its feet and unable to respond to challenges from less hobbled competitors. Although some regulation has led to expansion of some industries (e.g., scrubbers for smokestacks & alternative energy sources), close governmental regulation of internal operations and compensation will be detrimental to growth and prosperity. The total dysfunctionality of the former Soviet Union is a prime example of this. China previous to its more recent market-friendly make-over was another.

This need to avoid fettering companies also argues for fairness in regulation, to ensure that all players are equally restrained or unfettered. In a global environment, this requires international agreements, as competitors come from all areas of the world now, not just the US and a few other big economies. This in turn leads to the need for treaties like Kyoto (which you may argue was well or poorly written, depending upon your tastes, but I’m talking about the principle of involving all countries in these efforts, not the specifics of this one treaty). Perhaps we should focus on those efforts and less on arguing whether business is good or bad or smart or stupid.

Posted by: mental wimp at December 8, 2006 12:52 PM
Comment #198374

Investors are making decisions?
We’re all making decisions; many involving money.
And do we always go out of our way to become informed before making the decision. Sometimes I do, but not for the majority of transactions. You have fun with commercial research teams, and their payed off opinions.

Posted by: alastor's heaven at December 8, 2006 5:28 PM
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