from Frank Corden
Businesses are neither Republican nor Democrat. Businesses large and small are about making money, and there isn’t anything wrong with that. In fact there is everything right with it, our country is a good place to live because anyone regardless of their economic standing at birth can rise to wealth.
Were we have a breakdown is principally with big businesses, especially big public companies. These organizations (and I’ve worked for several) are overly focused on stock price and what the numbers are for the next quarter. Since leadership in these companies is often in place for only a handful of years (and retire as multimillionaires), these companies have lost sight of the strategic picture 25 or 50 years from now.
It’s this short term focus coupled with a lack of both regulatory enforcement for the regulations we have and enactment of new regulations appropriate to the times that led to the current financial debacle. If one bank took on high risk and showed good returns to shareholders, this pushed the other institutions to follow. If they didn’t jump on the bandwagon, the investor money would follow the “better” returns and the more conservative institution would have a drop in stock price. Thereby leading to the untimely departure of the soon to be wealthy CEO.
Conversely, many family owned small businesses at least have an incentive to plan for the next generation. Their horizon is often longer. Also, family businesses are better connected to their community so there is a greater desire to maintain good will with their community. So I would agree that overly regulating or burdening small business is bad economics and bad social policy.
However, not all small business owners or corporations are benevolent. Safety, environmental, consumer protection and financial regulations are all necessary to keep businesses large and small in line. I’m not an expert on the Clean Air Act (though I am very familiar with it) but I have been an expert on Superfund and the Resouce Conservation and Recovery Act (hazardous waste regulations). Though I’ve seen over zealous enforcement of these regulations, the Clean Air Act, Clean Water Act, Superfund et al, have left us with much cleaner rivers, safer drinking water and better air quality. Case in point salmon’s return to the Connecticut river along with eagles. The use of lawyers occurs as a result of businesses’ desire to avoid the responsibility to “do no harm” to others.
On the whole, environmental and safety regulations cause companies to produce less waste, be more efficient and work safer. In total, the outcome is a more profitable company and a safer healthier community. A win-win.
Let’s go back to the premise of our founding fathers, we have a right to life, liberty and the pursuit of happiness. If we all have those rights, we also all have an obligation not to impinge each others rights to the same. So, regulations in general are intended to assure that the actions of individuals and businesses don’t adervsely impact others.
My original post was intended to pose the question, what is the right role of government (at all levels) and what are our collective responsibilities. So in this vein, regulations that prohibit individuals and corporations from degrading the air and water that we all need to live would seem to be appropriate. The devil is in the details of what is degradation and when does it cause harm. That’s where the lawyers come in. Also, there is a fine line between preventing an individual from causing harm to others and infringing on that individual’s liberty. We aren’t very good at consistently walking that fine line, instead we as a society tend to traverse back forth.
Where we end up on the slippery slope is when government takes on the role of promoting life, liberty and the pursuit of happiness. So is promoting commerce by building highways and maintaining ports as well as enacting tariffs and negotiating free trade agreements an appropriate role of government? We have agreed as a society that a free public education is good public policy, but it is promoting the pursuit of happiness, not just protecting it? Is leveling the playing field through social programs like free public education appropriate? How is providing access to affordable health care any less appropriate? What line was crossed when the government promoted access to home ownership through institutions like Fannie Mae? I believe there is a line. I’d like to understand where you all think that line is and what rationale you use to draw the line.
Frank, you’re all over the park on this one, I don’t even know where to begin.
I’ll give it a shot with a couple of comments:
1. Clean air is GOOD, Title V permitting (Title V of the Clean Air Act Amendments of 1990) doesn’t do ONE thing to make the air any cleaner therefore that part of the Clean Air Act is NOT GOOD, not good at all. All it does is make the lawyers and consultants wealthy (and their clients poorer) cataloging sources and permits that are already there. No new restrictions to make the air any cleaner result from this incredibly expensive activity.
2. “Access to home ownership” oh please! I’d love access to a Rolls Royce Frank but let’s get serious, I can’t afford one and just because I can’t, why should the government allow me to? People don’t NEED to own homes at the expense of the taxpayers any more than I NEED a Rolls Royce.
I don’t agree with a large majority of your assumptions here Frank. What cracks me up is there seem to be two sets of rules here in John’s little fantasy world aka the WoodstockDTCCafe, one set allows guys like you to carry on and on and on and on with your blather yet when someone disagrees with you or the rest of the liberals here, they are shouted down, belittled and insulted and DEMANDED so show “facts” and “proof” you know, none of the things you’ve provided here or pretty much anywhere else for that matter.
Frank, I hate to pop your balloon about those Connecticut River salmon, but after decades of effort and enormous amounts of money they are getting a couple of dozen fish. The CT DEP won’t tell you the program is a failure, because that would mean cutting staff, but they certainly admit to the pathetic salmon numbers.
WVG, Fannie Mae didn’t allow anyone to buy a Rolls Royce of a house. The borrowing limits essentially cap the program at a new smallish to moderately sized middle class home. Because of the restrictions, it’s more difficult to buy a “fixer-upper” because of the minimum standards set relative to construction.
Nor did I say anywhere that people need to own homes. Only that government and the banking industry benefit when home ownership increases. The President and congress get re-elected and banks made lots of money (which of course some of them subsequently lost but the executives in charge still have their bonus checks).
What we do know is that in most periods, home ownership generally leads to more wealth accumulation over the individuals lifetime (this recession period of course excluded). The primary home has over the last 50 years been the cornerstone of most middle class family’s net worth. It leads to a sense of security and well being (see the recent lack of consumer confidence which has been linked to decreasing home values).
So should government be in the business of promoting home ownership. I take it from your post, the answer is no. Fair enough.
One key question in this discussion is how “public housing” fits into the equation. Large public housing complexes have generally been a failure. One contributing factor in the failure has been the lack of community in these complexes and the lack of a sense of responsibility for the buildings themselves, a sense of “ownership” not in the financial sense but rather in a general enthical sense. Dispersed/decentralized affordable housing for the poor and indigent is currently the approach. Should government be in the business of building these facilities or not, and if so how do the tenants get sense of “ownership” so they take care of the place.