The Financial Sector Rescue Plan is Answering the Wrong Question
Asking the right question is the biggest part of getting the right answer. The question the government is asking is “How do we keep the financial sector failures from creating an economic catastrophe?” Answering this question does nothing to keep it from happening again. It is curative and reactive when we need something preventative and proactive.
The right question – “How do we keep from getting into this mess in the future?” (How could we have avoided it in the first place?).
Over the last 30 years, I’ve been involved in managing companies with revenues from $100,000 per year to $100 million per year. And in every case we took great care to avoid putting the security and stability of the company at risk. One of the easiest ways to put a company at risk is to allow one or a small group of clients to become too big a percentage of the company’s revenue. If you lose one or two, the company is put at great risk of collapsing.
This is a fundamental business principle that our government has ignored. We should never have encouraged or allowed a small group of mega-companies to control so much of our economy that going away jeopardizes the security and stability of our nation.
Monopoly laws protect individuals from a few companies taking control of choice, driving up prices, and driving down customer service. If we need any regulations at all, we need one that would ensure no small group of giant corporations could take control of our economy and jeopardize the security and stability of our nation again. It’s just bad business. One possible solution – If a company is big enough that the government has to bail it out for the security and stability of the nation, it’s too big. Revise the monopoly laws to break it up, and we won’t have this problem in the future.
One of the functions of government is to provide security. It has failed us miserably in this case. Instead of preventing economic cancer by following basic business principles, they encouraged economically bloated lifestyles in mega-corporations that were a recipe for disaster. So now we’re spending our time, money, and energy trying to cure something that a good business would have never let happen in the first place.
This band-aid will do nothing to prevent it happening again. Will the government ask the right question? How do we keep a few companies from ever threatening the future security and stability of our nation again? It is the business of government to answer this question. Otherwise the present band-aid will only cover up a wound that will not heal.
