I Am Confused

I Am Confused

By: David Van Rossum

                I am confused. Why do so many people get angry at companies that become successful and make a lot of money? Why is it unfair? America has long been self described as the land of opportunity. How come when individuals exploit opportunities and become rich, many people think that those same people are selfish and maybe even evil? I do not want to get into the “fair share” argument over taxation here, but I wish I could understand the mindset of those who begrudge individuals who have done what most of us dream of doing? I am a fan of those corporations that generate profits for their owners and also give charitably. Virtually all of them give.  I am not complaining about the right of the “occupiers” to protest. It is our way to be heard. I am concerned about our legislators that take up the anti-business, anti-rich sentiment. They should know better. The concepts of free market and free enterprises have sparked national success, yet it would seem that these concepts are forgotten when people are protesting that they aren’t getting their fair share. It is fine with me that people want more of the pie. How some want to attain it puzzles me.

                Our government is alternately accused of being too business friendly and being too restrictive. Elected officials are caught between protecting the republic, its constitution, and economic foundations versus enforcing the will of their constituents. That is the way it should be. That balance is what makes our concept of governing great. Balancing the creeds of our nation with the wants of the populace is what we are all about. Temporarily abandoning either side of this well thought out system in order to garner reelection is what gets us in trouble. Most people are not wildly successful. That is no reason to disdain those that are. Most of us want what they have. Most companies don’t reap huge profits. That doesn’t make those that do evil.  

                I believe that our country has done a decent job evolving business regulations throughout our history. Anti monopoly laws to protect the public from unfair pricing and accessibility for those products that are deemed to be necessities were, and are, prudent. Legislation to protect worker’s rights and safety are also important. We have a mixed bag on negotiating trade agreements with other countries. The ideas are good, sometimes the agreements are not. Consumer protection is important but we shouldn’t legislate individual risk out of the picture. Disclosure laws should be adequate in most cases. Government intervention to protect the public interest is sometimes necessary. Oversight is good, but excessive oversight is disastrous. The bailout of a couple of years ago was well intentioned. Should the government restrict businesses from being too big to fail? I don’t think they should, but the track record of some of those in charge of these entities has been atrocious. It is their job to identify and mitigate risk to their investors, and some obviously did not. Those failures should not, however, lead to regulations that restrict companies from doing business by introducing expensive and time consuming reporting rules that ultimately get paid for by the people that the government intends to protect. Onerous restrictions make it harder for our businesses to compete in the world market and consumer prices invariably rise at home.

                A company generally needs to increase in value to attract and reward investors. Growing year over year profits is the aim. When a restriction is placed on companies or market segments that results in rising costs or declining revenue, the customers will surely bear the brunt of the pain. For example, Congress passed a regulation that limited how much money large financial institutions could charge for interchange fees on non-cash transactions. Merchants complained that the rates were too high. Those institutions inevitably will have to replace the lost income by introducing more fees or increasing borrowing rates in order to deliver successful year over year results. The consumers will have to bear those increases and the jury is out on whether the merchants will pass along their decreased costs. I doubt it. Our system isn’t supposed to work that way. If the merchants think that the interchange costs are too high, they should take their collective complaint to the marketplace, not Congress. New options generally materialize to address disgruntled markets. Competition for the merchant’s business should be sufficient to solve construed unfair pricing on services. Remember the outcry from the public when B of A tried to impose a monthly $5 fee for debit cards? They eventually caved but they will find other ways to increase revenue that will fall on their large business base. That doesn’t make them evil. It is what they are chartered to do by their owners. The public can look to other options for their banking needs. Once again, the government should intervene if there is a collusive effort by an entire industry to fix pricing for needed products, but it shouldn’t legislate pricing when there is plenty of competition (anti trust laws are there for a reason). The government sometimes helps to perpetuate the divide between the public and business by reacting in ways that are contrary to our free market system. Business is not evil. Business provides goods and services, and oh yeah, jobs.

                The free market spurs competition. Competition spurs affordability and innovation. Rewarding companies and individuals for building wealth should not be vilified. Those who look for a free piece of the pie that others have earned are subscribing to a viewpoint that is counter to the system that has helped make us great. Following their dissatisfaction to the end would result in nationalizing our businesses much like Castro did in Cuba. Is that really what they want?? I hope not. Not only does that system stunt individual economic well being, it also dissolves individual hopes and dreams of attaining a much better standard of living. I don’t want that, do you?

                I applaud those that have attained success and wealth. I want to be a part of a system that allows me the opportunity to do the same. Professional athletes and team owners are criticized for their enormous wealth. They should be admired for building such an interest in their products that allows them riches. That is the American way. Develop a product or service that the public is willing to pay for, and then find out how much they are willing to pay. The wealth that is generated doesn’t go into a mattress. It goes back into the economy so that those who have can continue to have, and hopefully have more. That investment is used to provide capital to grow other business sectors, providing jobs. Why are so many complaining about our system? Why would a successful country that has been built on individual freedoms and a strong free market be asked to change? Let us applaud those that give, but let’s not boo those who achieve. I love our system. I want a chance. Many in Congress appear to want to curb the ability of our enterprises to thrive and change the way our system works. I am confused.