Business People Are Terrible At Governing

[_LittleNipper]

In all fairness, government runs best when represented by a variety of backgrounds. Business people do have a place in government as do trash collectors, artists and even community organizers. It runs best with a variety of perspectives. It runs best when it is run by We the People.

That said, Politicians are TERRIBLE at governing. They think they should be re-elected over and over. They feel that their wages, etc., should be higher because they are not average. And they think runnung the government is all about robbing Peter to pay Paul.

[_subgenius]

because we just experienced how great a hack professor governs???
Last time i checked Romney had a pretty good run at governing a state....so good they referred to him as a Governor.



I appreciate the point that government should not be run as a business, but can not agree that successful business experience, church administration experience, and Governor experience are bad qualities in a President.

[_cinepro]

I'm confused by your example of employee bonuses cutting into your profits. you write as though bonuses were some undeserved plum you offer out of the goodness of your heart and to the detriment of your company's interests. can this really be correct? bonuses are just another form of compensation, and in a free market the compensation package you offer is going to affect the quality of workers you're able to attract, which will in turn impact the long term revenue and profitability of your company. so why do you describe this one part of your compensation package as being altruistic?

I have a few senior employees that participate in a profit-sharing program which is part of their compensation, but for my other "hourly" employees (including temps and part-time workers), there is no agreed upon bonus structure. I suppose long-time employees may now expect something at the end of the year, but newer employees aren't told they'll get anything.

I suppose the argument could be made that these bonuses still help the business to retain employees and improve morale and so they still work to benefit the company (and improve "profit" for the next year), but I'm not so sure this is the case. My employees are paid above the industry average as it is, so even without the bonus there isn't an incentive for them to quit and seek comparable work elsewhere. Especially in today's economy, there is a surplus of talent that I could hire. My most recent job posting in July brought in over 150 moderately qualified resumes in less than a week (and several hundred more unqualified ones). If I wanted to "maximize my profits", I could easily pay my employees less, cut out any type of bonuses (and the free sodas in the breakroom), and just replace any that quit.

Additionally, there have been cases where employees have left the company and I've thanked them for their hard work with a bonus. So in those cases, I've lowered my profit for the year with no possibility of the employee working to benefit the company in the future.

I also make charitable contributions to local youth sports teams, charity runs and bike rides, and when my bookkeeper passed away last year, I made a donation to her favorite animal shelter in her name.

According to Kevin's claim, all of these acts would be "illegal" because they directly reduced the company's profit.

[_palerobber]

thanks for responding, cinepro.

all i can say is i believe you're the exception to the rule, and paying higher than market value for workers is a luxury not all businesses even have.

[_mledbetter]

thanks for responding, cinepro.

all i can say is i believe you're the exception to the rule...

Based on what?

[_cinepro]

thanks for responding, cinepro.

all i can say is i believe you're the exception to the rule, and paying higher than market value for workers is a luxury not all businesses even have.

My point is that there is no "rule". There are as many different kinds of businesspeople as there are people.

The only "rule" is that your business must make more money than it spends, and if it doesn't, and you can't borrow or otherwise acquire more money, it's game over and you lose.

Some businesspeople are kind and generous, others are tyrannical, some are wasteful and unwise, others are shrewd and canny. Anyone can start a business and run it any way they like (within the laws of economics and the country in which they're living, of course).

Our attitudes toward "business" shouldn't be based on a caricature of what a businessperson is, or what they have to do.

[_mledbetter]

thanks for responding, cinepro.

all i can say is i believe you're the exception to the rule, and paying higher than market value for workers is a luxury not all businesses even have.

My point is that there is no "rule". There are as many different kinds of businesspeople as there are people.

The only "rule" is that your business must make more money than it spends, and if it doesn't, and you can't borrow or otherwise acquire more money, it's game over and you lose.

Some businesspeople are kind and generous, others are tyrannical, some are wasteful and unwise, others are shrewd and canny. Anyone can start a business and run it any way they like (within the laws of economics and the country in which they're living, of course).

Our attitudes toward "business" shouldn't be based on a caricature of what a businessperson is, or what they have to do.

I'm not sure that this answers the OP as to whether the businessman will make a better crony capitalist than the community organizer.

[_Gadianton]

but I'm not so sure this is the case. My employees are paid above the industry average as it is

In all fairness to Kevin, while showering employees with money -- I'll be sending you my resume, fyi -- may not be "illegal" depending on how extreme the showering is, a distinction needs to be made between one's own business on the one extreme, and a publically traded one on the other. If I have my own private company, then beyond raising red flags for fraud with the IRS, I can pay my secretaries a million a year. However, if I'm a boss in a public company, that would be a huge conflict of interest with investors and depending on circumstances, may actually be illegal. It would certainly be unethical.

I'm guessing the above is along the lines of what Kevin meant by "corporation", not someone's private LLC.

[_Kevin Graham]

but I'm not so sure this is the case. My employees are paid above the industry average as it is

In all fairness to Kevin, while showering employees with money -- I'll be sending you my resume, fyi -- may not be "illegal" depending on how extreme the showering is, a distinction needs to be made between one's own business on the one extreme, and a publically traded one on the other. If I have my own private company, then beyond raising red flags for fraud with the IRS, I can pay my secretaries a million a year. However, if I'm a boss in a public company, that would be a huge conflict of interest with investors and depending on circumstances, may actually be illegal. It would certainly be unethical.

I'm guessing the above is along the lines of what Kevin meant by "corporation", not someone's private LLC.

Yes, I'm referring to Corporations whose stock is publicly traded (A must see documentary, by the way). By law the board of directors must put profit before all else fr the sake of the shareholders. Cinepro, you really didn't know this? It is their fiduciary duty to increase the value of the stock holder's shares!

This is also one of the reasons why I choose to work for the company I do. It is a privately owned company and managed by a small wealthy family that doesn't have to bend to the will of stockholders who at any time, can fire the CEO for making corporate decisions that result in less profit. So for example, when American oil companies in South America or Africa, have the choice between spending money to clean up their oil spills and leaving it be, their choice will almost always be to leave it be because they have no legal obligation in those countries to clean up their mess. Most of this is due to the fact that these same corporations are in cahoots with the corrupt governments that don't care either, which is one of the primary reasons why they moved to those countries in the first place.

[_Bob Loblaw]

I've worked at four different publicly traded companies, two of which were run the way Kevin describes. Both of these companies are on the verge of extinction because they were so focused on quarterly earnings that they had no long-term plans for continued viability. Well-run, publicly traded companies who want to stick around are smart enough not to engage in policies that will in the long run, make it impossible to do business. For example, Union Carbide used to have a huge presence in India, but cost-cutting and lax management led to the Bhopal disaster. After paying half a billion dollars in damages, the company quietly closed up shop in India. Similarly, Gulf Oil took advantage of military dictatorships to exploit South American workers and take oil and natural gas out of several countries in the 1960s without fair payment to their workers or the host countries. All of Gulf's assets were eventually seized by the different countries' governments, and Gulf exists today only in holding intellectual property with few assets and very few employees.

But yes, some companies engage in predatory practices, but that's not unique to publicly held companies. I work for a publicly traded company that has an excellent record in its dealings in Africa, South America, and elsewhere.