Monday, February 09, 2009

Better Big Business

Carpetbagger's got a post about how the business community has taken Obama's side in the stimulus debate, but suggests that "regulatory, labor, and environmental issues alone should keep Big Business on the Republicans' side indefinitely."  And while I believe this is correct, this is a huge mistake on their part.  

As I wrote at Carpetbaggers, for the business community to still support deregulation and these other issues just shows how short-sighted they are. Perhaps they like having their peanut butter recalled on a regular basis, or being sued for the deaths their unsafe products caused, or having the banking industry evaporate due to loose loan standards, or having investors distrustful of financial statements and unwilling to invest. Perhaps these are GREAT for business, but I have to disagree.

It's not just citizens who need protection from Big Business; Big Business needs to be protected from itself. Only by enforcing high standards on them can they be assured to have high standards. Otherwise, they'll all keep cutting corners until there's nothing left of the platform they're standing on. It's ironic that, while the Bushies were gutting our business standards, China was imprisoning and executing people who get caught disgracing theirs. They're trying to raise their standards to be like ours, while we were lowering ours past theirs. If they knew what was good for them, Big Business would support Democrats too.

First World Standards

And that's the thing, what separates first world countries from second and third is that first world countries do things right.  Corruption and bribery are bad for an economy.  Fraud is bad.  Crappy products are bad.  Uneducated workers are bad.  Monopolies are bad.  And even spending the extra money to ensure proper environmental codes is good for the economy, both by increasing expenditures and preventing health problems.  

But it all must be a level playing field.  All companies need to obey the same rules and maintain the same basic level of service.  Doctors, lawyers, and CPA's can maintain high fees because the standards for entering their professions remain high.  If Joe Idiot could become a doctor without training, then medical fees would be in free-fall; as would their patients.  The same thing applies to all businesses.  If every retailer but Walmart is paying overtime, then Walmart benefits by keeping their prices down.  And so these other retailers are punished for obeying the law.  But if everyone obeys the law, then prices remain consistent, which would be ok, because consumers would have more money from the overtime they're getting.  A good labor law pays for itself in the long run.

Overall, Big Business needs to understand that their short-term, quarter-based outlooks are causing them harm.  That's not to say that every regulation is a good regulation.  But their blanket aversion to all regulation is clearly bad for their bottom lines.   And that's the thing, it's not just Republican social policies which are out of date and losing voters.  Their pro-business policies are equally out of date.  Perhaps some day businessmen will realize that those Walmart employees who are denied overtime have less money to spend at other businesses.

1 comment:

Mahakal / מהכאל said...

Good regulations mean that companies that do the right thing will be more likely to prosper, whereas poor or no regulations mean that the most unscrupulous operators benefit most, and competitive pressures drive better companies to become worse.