It has become human nature to search for "scapegoats" because it
is generally easier to blame others. While there is no doubt that there
have been many business abuses, restricting business earnings or profit
potential is often an error. It is one thing to stem business abuses
such as consumer fraud and/ or deception, usurious practices, etc. It is
a far different thing to create onerous regulations on businesses that
are very costly and time consuming for both the businesses and the
regulatory agencies. The better the potential profit, the more probability for optimizing employment, and overall healthy results.
An obvious example of this "judgment error" relates to the banking regulations that were enacted as a "knee jerk" reaction to perceived anti- consumer abuses by banks/ credit card companies. While there is a need for bank and credit card industry regulation, much of this legislation that was eventually enacted will do little to actually help consumers. While it will cost credit card companies more, there is little or no evidence that it will actually help many consumers. It will simply be different, and probably end up being more costly, but not better for anyone.
The change in bank laws and regulations was intended to get banks to lend more money, especially in the consumer credit and home loans area. However, mortgages are not easier or more streamlined or less expensive because of this legislation! Interest rates on credit cards have not gone down! Credit limits have become considerably more restrictive. Banks and other lending institutions must now follow more onerous regulations and requirements, and they pass along these costs/ risks to the ultimate consumer.
Government must realize that punitive legislation and regulations, while being perhaps politically popular, rarely help cure anything. Businesses, by definition, are generally motivated by profits, and anything that has the potential to reduce their profits is compensated for in other ways. Therefore, when businesses are forced to pay additional fees, or comply with costly regulations, they generally compensate by either cutting services, or reducing employment. It would seem even more ludicrous, in these days when we have still not restored our economy, even after over 7 years of economic duress in the United States, and there remains somewhat of a worldwide economic crisis.
Our government leaders must understand that the best way to "fix" the economy is to get more people back to work. If one thinks the numbers presently are not positive, imagine what they would really be if the numbers counted individuals who are "no longer seeking employment." There are a record number of workers out of work for a record period of time. Government must learn to earnestly speak to businesses, and develop a way to work together in a public/ private partnership, to give business incentives to put people back to work, while still protecting consumers. The time for rhetoric and political posturing is over - - it is now time for real action!
Also, it is important for the government, businesses and each of us, in our individual lives, to clearly differentiate between revenues and profits. In the end result, isn't it really about the bottom line?
An obvious example of this "judgment error" relates to the banking regulations that were enacted as a "knee jerk" reaction to perceived anti- consumer abuses by banks/ credit card companies. While there is a need for bank and credit card industry regulation, much of this legislation that was eventually enacted will do little to actually help consumers. While it will cost credit card companies more, there is little or no evidence that it will actually help many consumers. It will simply be different, and probably end up being more costly, but not better for anyone.
The change in bank laws and regulations was intended to get banks to lend more money, especially in the consumer credit and home loans area. However, mortgages are not easier or more streamlined or less expensive because of this legislation! Interest rates on credit cards have not gone down! Credit limits have become considerably more restrictive. Banks and other lending institutions must now follow more onerous regulations and requirements, and they pass along these costs/ risks to the ultimate consumer.
Government must realize that punitive legislation and regulations, while being perhaps politically popular, rarely help cure anything. Businesses, by definition, are generally motivated by profits, and anything that has the potential to reduce their profits is compensated for in other ways. Therefore, when businesses are forced to pay additional fees, or comply with costly regulations, they generally compensate by either cutting services, or reducing employment. It would seem even more ludicrous, in these days when we have still not restored our economy, even after over 7 years of economic duress in the United States, and there remains somewhat of a worldwide economic crisis.
Our government leaders must understand that the best way to "fix" the economy is to get more people back to work. If one thinks the numbers presently are not positive, imagine what they would really be if the numbers counted individuals who are "no longer seeking employment." There are a record number of workers out of work for a record period of time. Government must learn to earnestly speak to businesses, and develop a way to work together in a public/ private partnership, to give business incentives to put people back to work, while still protecting consumers. The time for rhetoric and political posturing is over - - it is now time for real action!
Also, it is important for the government, businesses and each of us, in our individual lives, to clearly differentiate between revenues and profits. In the end result, isn't it really about the bottom line?
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