Don’t let corrupt businesses taint us all

The USA Today Editorial Board wrote an article yesterday – “Businesses Behaving Badly” – blaming business for the spread of anti-corporate views in the U.S. They write: “Much of their {corporate leaders} poor standing is the result of their own misbehavior.” I think this is a bit misguided and agree with the “opposing view” writer George J. Terwilliger III that we should not blame all of business for the transgressions of a relative few. Here is my take:

Corruption is as old as humanity itself, and some people have always been excessively greedy. Government’s role is to create a fair and level playing field for everyone that rewards good performance while allowing bad behavior to be punished. Unfortunately, we are living in an upside down world where politicians have rewarded bad behavior and punished good performers. 

“Business” in the United States is not one big monolithic entity. Our government and other segments of society seem to treat the Fortune 500 as a proxy for all business, creating a negative perception of the small- and medium-sized businesses that are the main economic engine of the country and create most of the new jobs.

There is a big dichotomy between the way government treats so-called “big business” and the rest of the business community. Our elected officials keep looking at the Dow Index and see record profits, but they wonder why the employment rolls aren’t keeping pace. Instead of providing an environment conducive to all business, they take actions such as bailing out large companies, thus rewarding them for behaving badly and taking excessive risks. Record low interest rates have led to high corporate profits and over compensated CEOs. Businesses such as GM have benefited from regulation, “too big to fail” and access to cheap capital provided by the Fed. GM is upheld as the golden child of government intervention, but today the company is in all kinds of trouble with vehicle recalls and all the rest. 

On the other hand, the vast majority of our businesses have suffered because they can’t get capital, aren’t in protected markets, and haven’t had government help. Most businesses in this country are struggling to acquire capital from banks that are forced by regulators out of the small business market.

There is not a more honorable calling than creating good jobs, and most businesses are doing their best to grow and thrive. Don’t condemn an entire segment of the economy as a scapegoat for the failures of both parties to build a level playing field.

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