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Monday, February 20, 2012

Defending Commerce

One would assume that a nation built on the belief in a free market economy would appreciate the enterprise of commerce. But amazingly, business and industry is held to a much higher standard of conduct than most other entities. And even when business leaders are recruited for input on a complex issue; their recommendations are ignored and rarely implemented.

Let’s start with conduct… most businesses that I have been involved in have a very high standard for conduct. Due to the effects of employee behavior on a business’ reputation or success, most have very strict codes of behavior. If a manager or someone in a supervisory position behaves inappropriately, they are routinely and quickly terminated on the basis of violating company policy.

Recently a school teacher who was arrested for driving under the influence on the way to school did not immediately lose her job. I am sure that the teachers union required the school system to pay her while on administrative leave until acquitted or convicted. But in the business world, an employee would in most cases be terminated for such an offense.

Consider the many, many examples of elected officials who have been accused (and in most cases eventually admitted their guilt) of all kinds of inappropriate behavior and remained in office long after the media became distracted by the latest “news” event. It is unfathomable for me to understand how the congressman from New York can even consider remaining in office. It is even more unconscionable to think his district would reelect him. Again, such behavior by someone in the business or corporate world, would be grounds for immediate termination.

Recently a column ran in the Chattanooga Times Free Press that discussed a study that members from the business community performed on behalf of the Hamilton County Board of Education. The school board, in espousing that business leaders might be able to recommend ways the system could save money or operate more efficiently, created a task force to study the school system and make a report of their recommendations.
According to the story, the task force recommended sweeping changes including closing small and inefficient schools, reducing the paid staff of the system by over 1400 employees, and consolidating some functions that were deemed duplicative. As you probably guessed, most of the recommendations were ignored. In the three years since the recommendations were presented, approximately 34 positions have been cut – a far cry from the recommended 1400.

I am not advocating wholesale layoffs. Our community, state, and nation have far too many of our citizens unemployed. But I am advocating that the inefficient and ineffective use of scarce resources eventually negatively affects the golden goose – businesses and industries that employ most of us, contribute generously to all non-profit causes, and pay most of the taxes. Why do we consistently abuse our nation’s golden goose?

Last year our state leaders created by law a tax reform council who were tasked with studying our tax code and making recommendations to improve the code and our state’s competitiveness. The special council included academics and business leaders. Their recommendations were supposed to receive an up or down vote with no amendments. At the ninth hour, the council’s recommendations were not considered supposedly because the financial assumptions made in making the recommendations could not be validated.

The truth is the recommendations were inconsistent with certain political assumptions or philosophies, not the validity of the numbers. The XYZ Americans Against Taxation (fictional name) argued that reinstating the sales tax on food constituted a tax increase and a majority of our state elected officials have vowed to never raise taxes. The result – tax reform is in a coma and another group of well-qualified business leaders, after their work was ignored, will be hesitant to ever serve a similar purpose again.

So although our business leaders are extremely successful in managing their businesses and in serving their communities, commerce remains under attack on a variety of fronts. We are overly regulated and overly taxed. Government may not be able to be run like a business, but sound business principles could amazingly improve much that occurs in the public world.

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