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June 2008: In Our Humble Opinion: The Power to Tax Is...

Commentary by Charlie Grantham and Jim Ware

The chickens come home to roost, or "Where the blazes did that come from?"

As part of our re-vamp of the whole newsletter we're also changing our editorial format a bit too. Maynard, Buford, and the boyz are retiring - moving on to the Home for the Outmoded and Not Backward Compatible (they've earned it, after all). Unless - oh well, we'll see how this re-vamping thing works out.

Following on with our theme this month of "I fought the law and the law won," we have a little something to say about public policy and policymakers (big surprise).

Most people in business don't think very much at all about how public policy can shape, impinge upon, or otherwise affect what they are doing. Well, at least not until they screw it up and here comes Johnny Law. Enron, Worldcom, Adelphia Communications - remember them? Well, that gave us Sarbanes-Oxley. Unhealthy food? Bad drugs (the legal type, of course)? More regulations than a legal department can keep track of.

Now, not that we think this is all bad, because unbridled greed can do some rather nasty things in the marketplace. But the point is, people never seem to be on the lookout for these kinds of nasties until they hit. So here we are once again trying to keep your buttocks out of the sling. In Our Humble Opinion (we haven't retired that phrase) we think that's exactly what we should be doing.

Staying humble, we're convinced (and we plan to convince you) the next ten years will bring American business right into the cross hairs of public policy makers. And much more so than the crash of '29; more so than the Tylenol scare of the 1980's; and more than the EPA/FDA/NTSB scares combined.

By the way don't you just love all those initials? Why don't they just have a Department of Don't Do Bad Things (probably would be called the D3BT, which to the nearsighted would look like "debt." That's a joke, folks!)

Anyway, back at the ranch. Here's the lowdown. The way we work, where we work ,and how all that fits into the rest of our tangled web of life is way out in front of the laws and regulations our esteemed (?!) leaders have given us. One might go so far as to say the lawmakers are out of touch, perhaps even have "lost their bearings" (that's not our original, of course - wouldn't want ot be accused of plagiarism, now would we?).

We have ranted on other occasions about employment law, environmental impacts, education, and the like. And right here in this newsletter we even talk about that evil, dreaded giant sucking sound of taxation. If memory serves, the last time a guy named King George stuck his hand too deep in the pockets of the downtrodden we had a revolution. It was somewhere around 1775 or thereabouts (of course that's not the last time taxes got out of hand, it's just the last time we had a revolution with shootin', redcoats, and all that there stuff).

Today things have gotten so far out of whack between public and private interests that entire industries are collapsing (or about to). Hey, this financial mess we're stuck in at the moment clearly goes to a lack of regulatory oversight, and the health care (or, as we prefer, the death management) industry teeters on the brink of extinction. When doctors quit practicing because they can't make a middle class living we've got have a very big problem: we suspect it may actually be a case of over-regulation. Under in some industries, over in others - what a fine mess we've got!

So it ain't working. What does that mean? It means, In Our Humble Opinin, that we desperately need a major re-think of public policy to support health, safety, clean environments, and an increased quality of life. That's the bottom line, bunky. If you are doing something that either doesn't support those lofty policy goals, or gets in the way you will get slammed like a bug on a windshield at 60 miles per hour (or, more importantly, $60 per fill-up).

The run-up to the looming election has an undertone of '"Whoops, this isn't working," and that's true no matter who your favorite candidate is. Cry's for "Fix it," "Make it right," and "Make it fair" are being shouted out on every street corner. Politicians are fast becoming watchdogs for the larger public interest; and that, dear hearts, is what will drive that increased public policy impact on business.

The "less government is better" crowd might just want to go take a "calmative."

Let's dig a little deeper here. It used to be that you didn't have to worry about things that happened two counties over. It used to be that some idiot could blow up a country on the other side of the planet but you didn't even have to think about it. But in today's world of YouTube, iPhones, blogs, and broadband Internet everywhere it doesn't work that way. Everything is connected, and a little tweak here or there impacts the whole shebang.

And where does the responsibility of managing the whole system lie? We happen to believe that's the realm of government, the institution that's responsible for the common wealth, In a word (or two): public policy. Now we're not going to get into a debate about political agendas because they don't really matter anymore. Left, right, center, up, down, old, young, black, white, brown, blue, red, green, or purple. Doesn't matter. We are so interconnected now that somewhere, someone has to step up to the plate to make sure what Joe does doesn't kill Bill somewhere down the road.

In Our Humble Opinion (just in case you want to know), we (all of us, together) need public policy to tackle some pretty incredible challenges in the medium term. Like:

• Mandate environmental management;
• Redefine the relationship between labor and capital;
• Push investment into quality of life improvements (like education and healthcare);
• Decrease income inequality;
• Rebuild our crumbling public infrastructure (roads, highways, bridges, parks, libraries);
• Foster regionalization of economies (like the European Union); and
• Make bad guys go in a corner and stay there

Now you may disagree, and we hope to hear from those who do. But let's start the conversation. Clearly our existing public policies aren't doing a good job of supporting improved quality of life, fairness in social relations, and a peaceful existence. Enough is enough; we've reached a tipping point. Get off your butt, get involved at your local level, or whatever. Do Something!

We all have a responsibility to serve a greater good than our itty-bitty self-interest (because without public policy and a responsible government, there's no room for self-interest). Leave this world a better place than you found it. Is that really asking too much?

Now that's rant if ever we heard one.

Please direct your comments to us at any time. We'd love to publish your reactions and suggestions here next month. Or post a comment directly on the blog version of the June newsletter. And thanks for listening.

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