Before I get started please pardon me as this is my first attempt at a diary (thought helpful advice would be welcome).
The recent diary on financial services reform got me to thinking, why it is that republicans are seen as pro business and democrats as anti business. We need to change this perception and develop a thoughtful pro capitalism agenda on how we need to reform our economy.
Let's face it capitalism is the most effective system that the world has implemented to date, but it has some problems. WE have a tool to fix the negative aspects, it is our government.
Through pushing thoughtfully crafted legislation, I do not know why Democrats can't be viewed as pro-Business. I do not understand why GOOD businesses would not support careful regulation and stand with Democrats on these issues.
The most significant areas where capitalism has been allowed to go unrestrained are business size, regulation, compensation, and stockholders rights.
- Business Size - Very large businesses are able to dictate to the rest of their marketplace how business is conducted, for example Wal-mart, due to their large size were able to unduly strong arm their vendors, which caused the vendors to aggressively move offshore or loose their business. Once this was started in earnest all competitors needed to follow suit or see their businesses evaporate. Though via lower prices this may have seemed to benefit some, it savaged our middle class. A smaller Wal-mart would not have been able to reshape their market like this. Smaller businesses would have also been of benefit in the banking business, during the recent crisis the smaller banks were better off as they were much less likely to have participated in the risky derivatives market. The big banks were all swept into this as needing to do the same as their most successful competitors.
- Regulation - We need to turn the tables on how we are perceived here. Good regulation is good for business, it provides a level playing field to those businesses that want to act responsibility when others in there market want to take advantage by not. Without good regulation bad ideas can be forced on good businesses by the nature of competition. A good example is the abuses in the credit card business. I am sure there must be some bankers that did not want to abuse their customer's with tricky terms and deceitful practices. But once your competition implements such money making practices, they find they have to also or loose out. The normal business take on these issues is, if it’s legal, we need to play or be left behind. Why do we not have GOOD businesses standing up with us to propose regulation that avoids these kinds of abuses?
- Clawbacks - Why is it that people can come into a company and basically plunder it, leaving before this is noticed and taking all their winnings with them? While everyone else is left holding the bag. How is this right? There needs to be some system whereby gains are securely retained and disbursed over time to execs or a reasonable method to clawback when their poor behavior is discovered.
- Stockholders Rights - The basic design of a corporation is that those that buy the stock are the owners. The executives and board of directors work for the stockholders. Though this is the concept the reality is the CEO and board of directors can for the most work together for their mutual benefit leaving the stockholders by the wayside. Today it is almost impossible for the stockholders to effectively have a say on their executive's compensation.