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  • We need stronger business regulation

    Nice blog entry by free market advocates advocating more regulation:

    http://www.downsizedc.org/blog/we-fa...ess-regulation

    Inspired by Amose's post here:

    http://www.tacticalgamer.com/sandbox...ml#post1150548

    Originally posted by AMosely
    Then again, why say it. The only minds that remain unconvinced at this point are those which most likely cannot be changed. Sortof like people still espousing regulation-free financial markets. There's also the political aspect, which brings about a similar pattern of inaction leading to catastrophe. Interestingly it is typically the same people who are backing both (anti-regulation, anti-action on global warming), the same people who pushed the term 'climate change,' and a major reason behind Bush being snubbed so harshly at the recent G20 meeting. Fortunately it appears this political position, especially on a global scale, is not following the same trend as climate readings.
    Dude, seriously, WHAT handkerchief?

    snooggums' density principal: "The more dense a population, the more dense a population."

    Iliana: "You're a great friend but if we're ever chased by zombies I'm tripping you."

  • #2
    Re: We need stronger business regulation

    Won't work. Never has never will.

    As soon as you go that rout the masses of the destitute left behind will either:

    A. Form a strong government to place regulation on the market so that it benefits them.

    B. Form strong mobs that will simply destroy what they don't have.
    Iím not racists, I have republican friends. Radio show host.
    - "The essence of tyranny is the denial of complexity". -Jacob Burkhardt
    - "A foolish consistency is the hobgoblin of little minds" - Emerson
    - "People should not be afraid of it's government, government should be afraid of it's People." - Line from V for Vendetta
    - If software were as unreliable as economic theory, there wouldn't be a plane made of anything other than paper that could get off the ground. Jim Fawcette
    - "Let me now state what seems to me the decisive objection to any conservatism which deserves to be called such. It is that by its very nature it cannot offer an alternative to the direction in which we are moving." -Friedrich Hayek
    - "Don't waist your time on me your already the voice inside my head." Blink 182 to my wife

    Comment


    • #3
      Re: We need stronger business regulation

      I don't have a problem with "strong government". My concern is what that strength is used for. Currently it's used to achieve your "A" goal. My desire would be for it to protect an entity's right to say "no" to participating in a transaction. Ie. protecting one's right in one's own property.

      The blog entry points out how our ability to say "no" has been curtailed, and our money is grabbed to bail out the undeserving yet politically-well-connected. The government's strength has been corrupted to serve those who know how to play the beltway, and screw over those who mind their own business and stay home.
      Dude, seriously, WHAT handkerchief?

      snooggums' density principal: "The more dense a population, the more dense a population."

      Iliana: "You're a great friend but if we're ever chased by zombies I'm tripping you."

      Comment


      • #4
        Re: We need stronger business regulation

        This blog post seems to be saying that the 'strongest business regulation' is 'free market regulation,' in other words, self regulation or even more simply, self-regulating markets. I'm not an economist, but this is a cornerstone of capitalism - free to succeed, free to fail. Mitt Romney is apparently a supporter of this, voicing his opinion of 'Let Detroit Go Bankgrupt' in the New York Times this week. Sounds like a simple answer for a free-market capitalist, but it sounds like a trainwreck for the nation. The Detroit automakers brought about their own demise, made worse by the economic slide - they should be allowed to fail. But that's not really the issue - the question now is whether or not the country should allow it to. If you really think about it, the choice is obvious. Is the self-regulating market principle worth taking this much of a hit to the nation's economy when it's already bent over a barrel? Are we prepared to see unemployment hit depression-era levels?

        If you ask me, the problem is that these companies were poorly run, poorly watched (by federal regulators) and perhaps worst of all carried far too much political protections through corporate donations and the congressional lobby. The exact same story goes for the financial (mortgage and investment) firms. Each one of these factors needs to change, and the free market can only really address one of them. I think the answer undoubtedly requires government intervention, no matter how much we all hate it.

        Comment


        • #5
          Re: We need stronger business regulation

          I read Romney's article the first time you posted it, and his position is a bit more complicated than simple free market capitalism. Yes, he does argue for the Big Three to be allowed to go bankrupt. But that's merely the catalyst for structural changes. Some, like the position that the union should accept lower compensation, have already happened. They took large pay cuts, allowed new hires to be brought in at 50%, and agreed to what I think was called a VEBA...whatever it's name it was a private fund for health care.

          The other points: that executives give up stratospheric salaries and perks and offering stock grants/employee owned operations have yet to be talked about much. They also aren't cornerstones of laissez-faire capitalism, though. Actually, quite the opposite.

          Farther left than socialism; in fact, worker ownership of the means of production is, well to put it bluntly, a page out of communism. Whatever one's personal feelings about that, it's not pure capitalism, not even mixed-modal capitalism. It's straight up co-op worker-owner philosophy.


          Where has Saturn been in all of this? I haven't heard anything about their financial situation lately, but my understanding was the company was originally founded on the principles Romney is alluding to. I don't know if it's still the same way, but I'd be interested in seeing how they comp their workers as well as how they're doing as a business model.

          Comment


          • #6
            Re: We need stronger business regulation

            If we bail out Detroit, that money will be unavailable to the many smaller and less-well-connected companies that are successful, or marginally successful, and they'll fail.

            The positive effect of the bailout will be easily seen, but its negative effect will be invisible.

            From "Economics in One Lesson", which documents the long list of unintended consequences of benevolent but misguided action:

            http://jim.com/econ/chap14p1.html
            Dude, seriously, WHAT handkerchief?

            snooggums' density principal: "The more dense a population, the more dense a population."

            Iliana: "You're a great friend but if we're ever chased by zombies I'm tripping you."

            Comment


            • #7
              Re: We need stronger business regulation

              If ?
              The Democrat President and the Democratic controlled Congress are not going to let the auto makers fail.
              It simply won't happen.

              Comment


              • #8
                Re: We need stronger business regulation

                Originally posted by ScratchMonkey View Post
                The positive effect of the bailout will be easily seen, but its negative effect will be invisible.
                Yes, but isn't that better than GM or Chrysler liquidating, and having the negative effect obvious as plants close, suppliers go out of business, and an entire state's economy is literally ruined?
                "No bastard ever won a war by dying for his country.
                He won it by making the other poor dumb bastard die for his country."

                - Attributed to General George Patton, Jr.

                Comment


                • #9
                  Re: We need stronger business regulation

                  Bailing out the auto makers will only be bad if they do not make permanent changes to their decision making.

                  Can we count on that? Maybe not. Power corrupts, absolute power corrupts absolutely. Maybe they are just to big and need to be shrunk a bit.
                  Iím not racists, I have republican friends. Radio show host.
                  - "The essence of tyranny is the denial of complexity". -Jacob Burkhardt
                  - "A foolish consistency is the hobgoblin of little minds" - Emerson
                  - "People should not be afraid of it's government, government should be afraid of it's People." - Line from V for Vendetta
                  - If software were as unreliable as economic theory, there wouldn't be a plane made of anything other than paper that could get off the ground. Jim Fawcette
                  - "Let me now state what seems to me the decisive objection to any conservatism which deserves to be called such. It is that by its very nature it cannot offer an alternative to the direction in which we are moving." -Friedrich Hayek
                  - "Don't waist your time on me your already the voice inside my head." Blink 182 to my wife

                  Comment


                  • #10
                    Re: We need stronger business regulation

                    My views are just a little left of Fidel Castro, but even I dont think we should bail out Detroit.. The one thing that does make me think we should consider it is the argument that we need them "in case we need to Re-Tool for a time of war.." a good old fashoned World War, not the current Global War on Terror..

                    Looking forward to hearing input regarding this argument..

                    Comment


                    • #11
                      Re: We need stronger business regulation

                      Since we are going to bring the 'big three' into this, I would like to share a random internet e-mail going over the subject of the US automakers.

                      Originally posted by Random E-mail

                      A Japanese company ( Toyota ) and an American company ( Ford Motors ) decided to have a canoe race on the Missouri River. Both teams practiced long and hard to reach their peak performance before the race.

                      On the big day the Japanese won by a mile.

                      The Americans, very discouraged and depressed, decided to investigate the reason for the crushing defeat. A management team made up of senior management was formed to investigate and recommend appropriate action.

                      Their conclusion was the Japanese had 8 people rowing and 1 person steering, while the American team had 7 people steering and 2 people rowing. Feeling a deeper study was in order; American management hired a consulting company and paid them a large amount of money for a second opinion. They advised, of course, that too many people were steering the boat, while not enough people were rowing.

                      Not sure of how to utilize that information, but wanting to prevent another loss to the Japanese, the rowing team's management structure was totally reorganized to 4 steering supervisors, 2 area steering superintendents and 1 assistant superintendent steering manager.

                      They also implemented a new performance system that would give the 2 people rowing the boat greater incentive to work harder. It was called the 'Rowing Team Quality First Program,' with meetings, dinners and free pens for the rowers. There was discussion of getting new paddles, canoes and other equipment, extra vacation days for practices and bonuses. The pension program was trimmed to 'equal the competition' and some of the resultant savings were channeled into morale boosting programs and teamwork posters.

                      The next year the Japanese won by two miles.

                      Humiliated, the American management laid-off one rower, halted development of a new canoe, sold all the paddles, and canceled all capital investments for new equipment. The money saved was distributed to the Senior Executives as bonuses.

                      The next year, try as he might, the lone designated rower was unable to even finish the race (having no paddles,) so he was laid off for unacceptable performance, all canoe equipment was sold and the next year's racing team was
                      out-sourced to India.

                      Sadly, the End.

                      Here's something else to think about: Ford has spent the last thirty years moving all its factories out of the US , claiming they can't make money paying American wages. TOYOTA has spent the last thirty years building more than a dozen plants inside the US The last quarter's results: TOYOTA makes 4 billion in profits while Ford racked up 9 billion in losses.

                      Ford folks are still scratching their heads, and collecting bonuses.
                      Having an uncle who at one time was a Ford employee, there is a lot of satire, but also a grain of truth in this story.

                      As to the original topic I personally favor a 'free market' approach IE deregulation when possible. However time and time again has shown that once a company becomes powerful enough they will fail to focus on improving their company or their product and instead turn to doing whatever they can to make a profit. This unquenchable cooperate greed is why there needes to be regulation. In an ideal world this would not be the case, but as it is now there is no other real option other then the bureaucracy of the Government.

                      Now if we could weed out all the abuses in the system (fraud, waste, corruption) things would be a lot better off. Yet I regret that it is almost impossible given the lure of money and the power of greed and envy.

                      ~ Draken

                      Comment


                      • #12
                        Re: We need stronger business regulation

                        Originally posted by llPANCHOll View Post
                        My views are just a little left of Fidel Castro, but even I dont think we should bail out Detroit.. The one thing that does make me think we should consider it is the argument that we need them "in case we need to Re-Tool for a time of war.." a good old fashoned World War, not the current Global War on Terror..
                        In the event of WWIII, assuming that the entire continental United States are not obliterated in the opening couple of hours, then the US can always expropriate the numerous American located factories previously belonging to Toyota, Honda, Mercedes, BMW, and others.

                        Of course, the HMMVW (Humm-vee) will still be produced in the US, as will the Abrams tanks et al - albeit by other manufacturers (non auto).

                        Additionally, Chapter 11 bankruptcy does not mean that the existing factories are wiped off the surface of the earth. It simply means that the debt is restructured, existing ownership wiped out and replaced, and management likely replaced as well. Under Chapter 7 the stuff is liquidated, but that doesn't mean it's dismantled - a different company (Renault, perhaps?) may wind up purchasing some of the factories and putting them to use.

                        Or, hey, the US military could buy the factories and let them sit idle, in preparation for the joint Cuban-Guatemalan-Russian invasion!
                        A policy of freedom for the individual is the only truly progressive policy. -F.A. Hayek

                        "$250,000 a year won't get me to Central Park West."

                        Comment


                        • #13
                          Re: We need stronger business regulation

                          Here's something else to think about: Ford has spent the last thirty years moving all its factories out of the US , claiming they can't make money paying American wages. TOYOTA has spent the last thirty years building more than a dozen plants inside the US The last quarter's results: TOYOTA makes 4 billion in profits while Ford racked up 9 billion in losses.
                          This is an incredibly ironic line in an e-mail that is supposed to appeal to workers. The absolute #1 reason Toyota can come here and be so competitive is because they do not have the absurd legacy costs the domestics have racked up by caving to the UAWs every demand. Toyota does not have to pay 90% of laid off workers' wages while they sit on their asses in Job Banks, they don't have to pay lifetime pensions on thousands of retirees, they don't have to pay nearly all of their workers health care premiums, and their unskilled employees don't start off making unreasonably high hourly wages.

                          With the UAW unwilling to budge, it will be impossible for the Big Three to restructure in a meaningful way because they will still be bleeding cash like a sieve from programs and policies for workers put into place when the Big Three had no foreign competition.

                          I'm not blaming all this on workers, I'm just responding to that random email you posted. I think the management at the Big Three deserves to be in the situation they're in right now, because they just could not give up the gas guzzlers because they are the highest profit-margin vehicles they make. Now that they're not selling, they can't come up with a new business model and don't have the capital to invest in changing their operations. An incredible lack of foresight and complete ignorance to the market on the part of the Big Three management led to this, and if they are given a large government loan, there need to be some strings attached that carefully dictate how that money is to be used. I realize that's not normally how a loan works, but this is a special enough case that I don't think the government should be putting the taxpayer on the line for these companies to continue down the same path.
                          "No bastard ever won a war by dying for his country.
                          He won it by making the other poor dumb bastard die for his country."

                          - Attributed to General George Patton, Jr.

                          Comment


                          • #14
                            Re: We need stronger business regulation

                            The scary question is WHAT strings get attached ?
                            They seem to have gotten access to the first 25 BILLION by avoiding the restrictions about building green cars and re-tooling but then again we are still in the lame duck session.
                            What strings does the next government attach to the money, which from what I hear and read, will not be enough.
                            More "green" mandates seems more likely than renegotiating the labor contracts but I am a pessimist at heart, so we can HOPE that the unions Change and that our 25-50 BILLION dollars isn't pi$$ed down a hole.

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