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Are Liberals Right? "Big Business is BAD"
July 1, 2002
What a week! The week of June 23, 2002 may well be discussed in future history books. Without claiming to be a Miss Cleo, I predict that three events of that week will greatly alter the future direction of our country:
1. the Supreme Court ruling that breaks up the monopoly of government schools;
2. the revelations of accounting wrong doing at World Com, et al; and
3. President Bush's speech making the Middle East problem crystal clear.
See the "Headlines We Will Never See" in this edition (7/1/02) of rightturns.com for how Bush has cleared the air in the Middle East. As for the Supreme Court ruling, I am still too giddy and excited to write about it with clarity; but I will after I calm down and reflect some more.
So that leaves for discussion the horrendous news of more (after Enron, Global Crossing, Xerox, et al) corporate shenanigans that screwed shareholders.
Rightturns.com reader Gary from Oklahoma recently emailed me the following note:
" In the new kids movie "Hey Arnold" big business is portrayed as evil. One quote from the movie even says, "This is a classic example of the little guy taking on big business." Why does everyone think Big Business is so bad?" Well, Gary, in light of recent corporate shenanigans, "Big Business" can easily be portrayed as bad!
The image of bad "Big Business", however, is a problem that severely rocks key conservative building blocks: the supremacy of the freedom to pursue business interests; the supremacy of personal ownership; and the "business of America is business", not government.
So, let's not hide from this issue and let the liberals take center stage. There are conservative responses to your liberal friends that attack "big business" with renewed vigor these days. Let's review them:
1. "Real prison time, real personal loss" We hear of the wrong doers being fired and when reached in their homes in Vail/Boca Raton/the Hamptons they have no comment. Or we see them testifying before some Congressional committee after being granted immunity. We need to STOP this. We want prosecutors to investigate, fully prosecute, and convict those that are guilty. Because they are CEO's, CFO's, or audit/consulting firm partners does not matter. Throw the book at them.
Sentencing should not be in any Club "Fed" but in real prisons where we send robbers, thieves, and people that wantonly destroy property and lives. In addition, upon parole, there should not be any Vail/Boca Raton/ the Hamptons house or any other assets to return to. If Bernie Ebbers or Scott Sullivan is convicted, make them start over completely when they get out of prison in twenty years. We make blue-collar prisoners start over. If there is plea-bargaining as part of the going after the big violators, then make stripping of personal assets part of the bargain. Conservatives are the upholders of law and order and we should demand it in all cases of corporate fiduciary violations.
2. "Separate consulting and auditing" Consulting and auditing are two opposite forces. Consultants are hired to figure out ways to help a client pursue unique opportunities so the client can gain a competitive edge by differentiating itself from its competitors. Auditors are suppose to make sure clients are following the rules and reporting activities in a commonly accepted way so apples to apples comparisons can be made between competitors.
So consultants create uniqueness and auditors strive for sameness. Having these same services under one roof does not work. Make the firms that have both split them up.
3. "Not everyone is doing it" It sure seems that way, doesn't it? But it is not true.
a. The rules are working for the majority of companies. We do not need more regulation. We need more enforcement and real prosecution (see #1 above). And remember the current system IS catching violators.
b. We should feel sympathy for those employees unknowing of and unconnected to the corporate shenanigans that lose their jobs. I feel no sympathy for those that lose their "life savings" because it was all in the company stock. A former Enron employee whispered to me at dinner one night that the Enron employees she knew willingly overloaded on Enron stock. Diversity of investments still works.
America's faith in its business community is taking some hits. With full prosecution, the faith can be restored. So take the issue to your liberal friends. Don't shrink from it. In the long run, our economy and our investments will be better off.
Sam T. Harper graduated cum laude from Vanderbilt University. Following a tour in the US Navy and a stint as Operations Manager at Roadway Express, he earned his MBA from Stanford University Graduate School of Business. He was a contributor to In Search of Excellence, the best selling business book of all time. Sam was also Manager, Economic Planning & Analysis at Sohio Petroleum, Partner and Chief Financial Officer at investment-banking firm Bridgemere Capital, and Chief Operating Officer of the Institute for Contemporary Studies, a San Francisco Bay Area-based think tank and international publishing firm that specializes in self-governing and entrepreneurial public policy. Sam was a chairman of the San Francisco Republican party and the GOP co-host of California Political Review on KALW-FM in San Francisco. Sam is currently the co-owner of the Tennessee based Institute for Local Effectiveness Training, LLC a management consulting, training, and coaching firm.