Business Management: Centralized vs Decentralized Styles

Companies can be managed from the top in two ways. The public is not generally conversant with the difference. They’re:

One: Very strongly, or centralized, where the CEO is in complete control of the company’s daily operations. Many executives prefer this approach. I ran a highly successful 74-office employee-contracting firm using this management principle. Those offices operated within a myriad of industries.

Two: Loosely and decentralized, where more local control is allowed. Warren Buffett operates his different companies in varying industries on a decentralized basis. He has his individual companies perform without much strict daily direction.

I prefer centralized, hands-on oversight, which I believe is better from the operational standpoint. On the other hand, if your goals are primarily that of an investor, you never have the time, nor perhaps the ability or inclination, to cope with daily administrative duties.

In short, there are two different types of CEOS for two different styles.

Potential Damage of Cap & Trade

Right now Cap & Trade legislation appears to be stalled in Congress but left-leaning politicians and their groupies never give up trying. Those who still believe in global warming science as being truly unpolluted, are still true religionists.

Added to these entrenched-religion environmentalists are practical leftists who realize that Cap & Trade is an instrument for enforcing control and taxation across the board on the entire population. And without designating the effort for what it truly is.

The main problem is that economic damage will be imposed, though the vast majority of Americans do not want Cap & Trade.

The government is enacting many of these global warming tenets without the approval of the electorate, by stealth and undercover means.

It’s weapon? The almost unrestricted use of the Environmental Protection Agency.

Incentives For Creating Jobs

Left-leaning politicians and their economist advisers have no idea how to create jobs. Their training, experience and inclination work against such effort.

Jobs as a rule do not come from the government creating a post in a government office, or handing out a pick, shovel or hammer for a construction project. They come from real work demand of consumers. When the demand is not there, the job can never be viable or stable.

Incentives in the form of one-time tax credits are not valid inducements. Politicians and economists who cannot even operate a pushcart never learn this. True incentives come from permanent tax cuts.

To assist job incentives, there must also be minimal fiddling, causing higher costs for employed workers, on wages, fringe allotments, or threats of additional business licensing fees. And no veiled or actual increased taxation on income.

Psychological disincentives always are the culprits in destroying real job formation, a fact left-leaning politicians and their economist advisers will never learn, or they will lose their credentials.

Man-Made Economic Woes

I have commented in the past on our economic financial meltdown and economic woes, but I think it worthwhile repeating.

Far too many folks are still getting misled by the slanted media and by politicians who have their axes to grind.

One: Up and down economic cycles are normal, but excesses may have other causes.

Two: The current financial meltdown started as a direct result of a concerted government policy of making home mortgages available to folks who could not afford to have those mortgages.

Three: Because of government pressure, and threats of law suits from “do-gooders,” in addition to the opportunity for profit, banks collateralized the mortgage date obligations (CDOs) that facilitated mortgage sales the world over.

Four: Government-licensed rating agencies gave these CDOs the AAA ratings that assured the global sale of the securities.

Five: Thus, a bubble grew and grew until, like all bubbles, it burst.

Six: To add to the bad psychology that accompanies any bust, the government came in with a series of disastrous man-made steps.

Among just a few disasters: The decision to determine bank value on a daily fictitious basis. Catastrophic, unnecessary bailouts of banks, when ordinary guarantees would do. Buy-ins of auto companies to form a fascistic corporate state (a la Benito Mussolini). The government takeover of AIG when an ordinary bankruptcy would do less damage.

In short: The government has seen to it that a slight economic downturn has become a Great Recession. With an unconscionable deficit to go with it.

When GDP Fails, You Can Fantasize

GDP stands for gross domestic product. It’s a measure of a country’s economic output, the value of all its goods and services produced. It therefore represents the country’s standard of living.

The French GDP is falling, so they want to substitute their vacation time and other assumed “joie de vivre” as an additive. After all, it can be embarrassing when the French have to compare their left-oriented economy to those more attuned to capitalism.

Why not come up with some phony, arbitrary adjustment that assumes your way of living is superior to others? You may take the month of August off for holidays. So you come up with an arbitrary value from under your hat, (or is it chapeau).

But what about the lack of services during August? And those constant, paralyzing public union strikes?

How Easily Should Patents be Available for Business Methods?

Patents were originally intended for pure inventions. They contributed to our ability to become the industrial leader of the world.

Now they are being issued not only for actual products and things, but for general ideas and for business solutions. Or even the way collections are made online.

The U. S. Supreme Court is now looking at cases in dispute, to see if clarification of patent law is necessary and whether interpretation of the law is to be more limited.

We Never Learn About Practical Global Trade

Barack Obama appears to be becoming the first protectionist president since Herbert Hoover. That is a distinction he should not be proud to achieve, but his actions so far put him in line for the designation and distinction.

It was the Smoot-Hawley protectionist import duties that set off the world-wide trade craze that created the atmosphere, whereby industry was stifled and the Great Depression became global. That, along with Franklin Roosevelt’s high U. S. taxation policy and reckless government spending, and a mindless Keynesian philosophy.

A pump-priming stimulus theory that the Obama Administration is so keen about today.

Remember: We are an export country, with about $20 Billion at stake each year. Playing games with protectionism can be deadly for our economy.