Friday, November 04, 2005

Pie-Eyed Points: Reforming Corporate Culture

DISCLAIMER: In the vein of the Strib redesign, I'm going to take this opportunity to introduce a new section for the Pie-Eyed Picayune: Pie-Eyed Points. To provide some coherence and order in the blog, the purpose of Pie-Eyed Points is to create dialogue between the Pie-Eyed contributors surrounding a specific topic. Each of us will aim to write one blog entry covering the topic, in addition to our regularly-scheduled wit, charm, and hilarious musings. Feel free to let us know if you have any topics you'd like us to discuss. For our inaugural edition of Pie-Eyed Points, this entry is a response to Ilya's screed about the Fed Reserve.

Eliot Spitzer, the New York attorney general running for governor there, received way more press in Minnesota than the Minnesota attorney general running for governor here. In filing a suit against Guidant - a company that employs about 3,000 workers in Arden Hills - along with a Q&A in last Sunday's Strib, and a speech at the University of St. Thomas School of Law, Spitzer fulfilled a trifecta of media coverage in the metro area that our own AG/governor-hopeful Mike Hatch must envy.

Spitzer, obviously, has a bit more prestige than Hatch, and over the past few years has had a remarkable influence nationally. He does, however, cut quite the controversial figure. Reviled by many in the business community, Spitzer has been on a crusade against corporate malfeasance, and his pulpit of choice has been his AG position. Most notably, Spitzer has taken on the mutual fund industry, the New York Stock Exchange, and insurance executives. Although I'm pretty sure Spitzer would reject the comparison, he has, in many ways, struck a pose (vogue!) as the Ralph Nader of the 21st century: A consumer advocate using his position to fight battles the government is either too weak or too disinterested in fighting.

In our capitalist system, the corporate culture essentially competes in two races: a race to the bottom and a race to the top. The race to the bottom boils down to offering the lowest price a company can afford while still turning a profit. The race to the top is a manifestation of the supreme value of material success. In these frantic races to the bottom and to the top, corporate culture often steps into that gray area between the legal and the illegal, and many times plant both feet firmly in the illegal realm. Problems arise when the people in the middle of that race to the top and race to the bottom fall victim to the illegalities of corporate culture malfeasance.

Ideally, government regulation provides a buffer and a hindrance against such actions. Spitzer argues, however:
Ever since Ronald Reagan first ran for president, he articulated a theory that government is the enemy. Since then, we've been in an intellectual environment where the role of these agencies is openly and publicly derided. So it should be no surprise that 30 years later we look back and see that every one of these agencies has failed to do its job.
Regulatory agencies and government enforcement has been weakened to such a point where, in some cases like, say, Enron, corporations feel no fear of reproachment. Therefore, when the federal government fails to protect its citizens, it is the duty of people like Spitzer to use their power in filling the vacuum.

Essentially, Spitzer's argument rests on the fact that the free market - the race to the top and the bottom - will not always take the best interests of people - of citizens - into account. Rather, a company, by its very definition, takes only its own interests into account, even when it does social good within communities. Laws and regulations for child-worker protection, minimum wages, the 40-hour work week, and other vital workplace policies can only be instituted and enforced by government.

These types of government protections have only become more vital as our economy has shifted from a manufacturing base to an information and service base. There are just as many needs for protection and regulation now as there ever has been; however, finding those needs have become more complex. They are not necessarily visible to the public, who in many ways have merely become apathetic to the fact of unscrupulous and unethical corporate practices. Keep in mind, I do not advocate for unfair, intrusive, and obsessive government regulations. There are creative solutions out there, as well as self-regulation and self-enforcement. Both the current political climate and the current corporate cultural climate, however, do not appear to favor such remedies.

A company that merely steps its pinky toe into the an illegal practice is just as guilty as a company that swan dives into illegality, and both should be held accountable. Corporations need to learn they have power over not only their own interests, but the interests of millions of shareholders, consumers, and participants in the national economy. In order to administer a fair economy, corporations need to realize this fact, reform the corporate culture, and find some corporate responsibility.

Absent that...I say prosecute 'em.

PeP Points (Ilya): The Federal Reserve System may not be your friend
Strib: Tough love toward Wall Street
Strib: New York's top lawyer champions enforcement
PiPress: New York attorney general suing Guidant over handling of device flaw
NYT: Wal-Mart Memo Suggests Ways to Cut Employee Benefit Costs

7 comments:

Anonymous said...

ZZZZZZzzzzzzzzzz. I stopped reading after the fifteenth paragraph. What were you talking about again?

xtrachromosomeconservative said...

Who do we prosecute when our social security benefits are cut because the government has been pilfering the "trust fund" for the last thirty five years?

PiedPiper said...

You're such a good Republican, X. Avoid the topic by bringing up something unrelated to the topic. Congrats...you got me.

And, btw, you should prosecute the US government if you're worried about those social security benefits. I think you'd have a legitimate case. Class-action style.

xtrachromosomeconservative said...

There is already case law on the subject you tool. Put your nose in the books. And I don't object to anything you say in particular, Spitzer is doing an important thing, restoring some faith in capital markets. I am sure there is some prosecutorial overreach, but he is definitely drawing much needed attention to corruption that affects most of us. Still, I just wanted to point out something with government, sometimes you don't have the ability to redress your grievances, and the entitlement programs are such a case. So don't be so snarky you knee-jerk lib.

xtrachromosomeconservative said...

And I think your suggestion of suing the goverment, if you reflect on it, are revealing of the underpinnings of a lot of left of centre beliefs and policies: the government has its own money. Yes, lets proceed with a class action lawsuit against ourselves so that we can tax ourselves to pay ourselves. BRILLIANT! Or if we could just find that little lock box, wherever it is.

PiedPiper said...

A) My suggestion to sue the government over Social Security was not to be taken seriously.
B) The fact that my suggestion somehow reveals a wacko lefty conspiracy to sue ourselves just so we can tax and pay ourselves indicates that you may be taking yourself a bit too seriously.
C) Dude, you gotta chill out. Just as you agree with me that Spitzer is doing some necessary work, I agree with you that Social Security has been pilfered. We perhaps don't agree on how to fix the problem, or even the priority of the problem considering other pressing fiduciary issues such as Medicare. But, my point is that this post, to me, had no relevance to Social Security. If you want to talk about Social Security, then we can talk about it. But I thought I was talking about consumer advocacy and the use of an AG's office to regulate corporate overreach. Government overreach is a legitimate topic that ought to be discussed, but this post doesn't seem like the place for it.
D) Don't you love a good pissing match? You know I can't hate on you, X!

xtrachromosomeconservative said...

Dude, I always I love a good pissing match. Seems like we should have a big cyberhomoerotic man hug now.