Question by ano.nymous1986: How should government regulated a businesses practices?
Okay let’s start from the beginning. With the dying job market there will be a increased interest in alternative ways to make money for the average American. The option most Americans will probably be looking toward will be new/small businesses. The government’s red tape combined with the competition makes it virtually impossible for a new business to survive. If the government were to lessen their control over small businesses by means of zoning laws, permits, inspection costs, and taxes, the possibility of creating a new business would become a more viable option for mainstream Americans. Though American should not expect to become super rich, rather instead hope to make enough to replace the income they lost.
For the business that don’t just survive but rather thrive this would increase the amount of jobs available for those who can’t handle their own business. For when a business grows to a certain size the government should create a new type of government job. This new position is one that people are trained in the fields of economic decision making and smart business planning. Once a business grows to the point where it employs say 1000 people, a person trained for this position is sent by the government to monitor and advise the company and find the best ways for the company to not go under, preventing the loss of jobs to many Americans. Though this person has no actual power and is strictly an advisor.
When a company grows to ten times this size (10,000 employees) a higher ranking government employee, with a higher level of training comes in. This government employee has more power than the previous. This one has voting power of ten percent of the company, and also has the authority to release information about the companies decision making to the government and recommend whether the government should intervene more with the company.
If the previous government employee recommends more government intervention and the government’s review of information provided is reasonable enough then the government should launch an investigation into the company and it past business practices. If it turns out that the company is at risk of going under or outsourcing then the government should create a list of possibilities for preventing the loss of American jobs and sit down with the company owner(s)/ Executive officers and attempt to determine a viable option.
If a viable option can be reached and the owner(s)/ Executive officers refuse to take it then the company must pay 50% of the salary to all employees that are to be laid off until they are able to find another position paying more than 60 % of their previous income, or pay for the employee to be retrained in the field of the employees choice. If no viable option can be found then there is no way that it may be prevented and therefore will be no penalty as long as the company gives adequate notice to its employees and stockholders.
I believe this is a very fair way government could get companies to compromise on what’s best for the company as well as what’s best for the employees. And therefore best for the economy. What do you think?
You don’t have to read this^^^^ If you don’t want to, just tell me you plan instead.
Best answer:
Answer by Captain Credit
An interesting and lengthy question that possibly deserves an equally lengthy answer.
I have worked for various companies. Everything from a family owned business that employed 3 family members, to a large Wall Street firm that employed roughly 40,000 people.
The issue that we have here is that in trying to regulate businesses, it’s as if the government is trying to please everyone…and in doing so, they please no one. Like the saying goes, “You can’t just be a little bit pregnant”.
As a shareholder in a wide range of publicly traded companies, I have had a few of my common stocks go to zero, while the companies filed for bankruptcy (Lehman Bros. and WaMu are just 2 of them). Even though it cost me money personally, I am thinking that the best way to go about things is to simply allow the grossly mismanged businesses to fail completely. That is what capitalism is all about; survival of the fittest. The ones that made the biggest mistakes and have taken the biggest falls, are also the ones that were perhaps the greediest.
What bugs me MORE is that fact that the executives of these failed companies have now come come to the US government for money to keep their businesses solvent. And, while holding their hats in their hands and asking for a taxpayer funded bailout, they also have their friends in the backrooms writing bonus checks to themselves.
As another saying goes, “You make your bed, you have to sleep in it”. These folks made their beds. Whether it be in the form of sub-prime lending, or using derivatives to squeeze more profits from their balance sheets, or manufacturing vehicles that American consumers can not afford because of the high cost of fuels, the executives were providing the leaderhip that led to this mess and at the very least, they should suffer the consequence of unemployment themselves.
Here’s a novel idea. Before these HUG banking conglomorants became what they were, who was servicing those home mortgages in the past? The answer? Local banks! It used to be that when someone in Middletown USA wanted to buy a home, they applied for a mortage with the Middletown USA banks. The loan officer would review the application, look at their own banking records, verify employment with a simple local phone call, and possibly even drive to the property to inspect it to make sure that the home was worth what the buyer was paying (ensuring adequate collateral for the bank). Compare and contrast this rather old fashioned idea to what has been going on for that past 20 years! The mortgage lender is 2,000 miles away and has absolutely no idea who they are dealing with. For all they know, the property is a spruced-up double-wide trailer that they are lending $ 400,000 against. So, my question is…what’s wrong with going back to basics and allowing these motgage banking giants to fail? There will be a void that would quickly be filled by…small town banks.
I could go on and on here. But I wish to make one more point. It’s time that shareholders take back ownership of the companies. The boards of directors are often bloated with upwards of 15 people that do absolutely nothing in the way of corporate oversight on behalf of the real owners, the shareholders. Often times, these people serve on multiple boards of directors and are paid six figure salaries PLUS benefits from each company. For what? To rubber stamp their approval on everything that the CEOs say? It’s time for a change…and the change needs to happen on the ownership level.
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