Business column
usiness
Tom Bockor
The first in a series, this col
umn seeks to foster thought
and insight with respect to the
role of the student in society
and the role of society in a stu
dent’s life.
With that, let us consider a
recent event which has reciev
ed far too little press. The sub
ject is the proposed“bailout”
of the U.S. shoe industry.
The battle shapes up like
this. The industry is on one
side. The shoe manufacturers
are being squeezed by foreign
competition. They wish to have
the U.S. government initiate
protectionist policies in order to
make the domestic producers
more competative.
We find President Reagan
on the other side. Citing prin
ciples found in laws addressing
market structure, such as an
titrust, the request is denied.
Now, it is quite simple to see
the reasoning behind each
stand. The shoe industry -
management and union - wish
to maintain their personal stan
dard of living without altering
capitol requirements or produc
tion standards. Foreign com
petition is forcing domestic pro
ducers out of the market.
Qn the other hand, Reagan
feels that bailing out the in
dustry is subsidization of inef
ficiency. To do so would be to
subsidize the people in this in
dustry at the expense of the rest
of the taxpayers. The govern
ment feels that this is inap
propriate and is not consistent
with the common welfare of all
the people.
Clearly, the ramifications
would be a virtual blank check
to inefficient industres. We, as
a nation, would not only be
tolerating ineffeciency, but
fostering it as well. We would
be artificially supporting an
uneconomical product. In ef
fect, inefficiency and waste
would be rewarded.
What about Chrysler? They
are an extreme example. The
sheer size and composition of
Chrysler and its role in the auto
industry as well as the overall
economy warranted govern
ment action. Denial of
assistance would have resulted
in a violent upheaval within the
industry resulting in massive
unemployment, sympathy
strike movements, riots,
political instability and more.
Chysler was a victim of a
violent, sudden world crisis.
The shoe industry has had time
to respond to the changing en
vironment but failed to do so.
Clearly, baling out Chrysler
falls under the heading of,
“provide for the common
defense.” There is no com
parison between Chrysler and
the U.S. shoe industry.
Returning to the subject, the
ramifications of not protecting
the industry are also clear. The
outflow of money to foreign
countries increases the federal '
world at Capitol:
trade deficit and we all know
what goes with that. Also, a
large number of unemployed
must be absorbed by the
nation.
Causing this is not the intent
of the president. What is in
tended is firmly entrenched in
economic theory. By not bail
ing out the industry we are for
cing the firms to deal with the
reality of the free market and
the infamous “invisible hand”.
Briefly, this means that effi
ciency through allocative and
managerial means is guaranteed
by the market. Resources are
employed to the market level of
efficiency and residuals are free
Get down to business faster*
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If there’s one thing business
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ness-oriented calculator.
The Texas Instruments
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Its built-in business The calculator is just part
formulas let you perform of the package. You also get
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accounting and statistical business courses: the Business
functions - the ones that Analyst Guidebook. Business
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like present and future value of calculator and classroom.
© 1985 T 1
for other
markets or firms.
In any case, unemployment or
subsidization, the taxpayers
must be burdened. However, to
subsidize is to perpetually
burden the nation with ineffi
ciency while allowing the
market to decide, guarantees
only a short-term burden while
resources migrate to other
industries.
So what does this mean to
the student? Well, regardless of
who is right and who is wrong,
the stand by Reagan for effi
ciency over subsidization is
echoed by students every
where.
calculations, amortizations
and balloon payments.
The BA-35 means you
spend less time calculating,
and more time learning. One
keystroke takes the place
of many.
Consider this...
Particularly here at Capitol
Campus (at least in principle).
I’m sure many students object
to the argument against in
tervention in this case.
However, collectively, the
students must agree with the
president’s position, in
principle.
The reasoning is, again, sim
ple. One of the top concerns of
students across the country is
ineffective performance among
tenured professors. Right or
wrong, this sentiment appears
to be very strong on this cam
pus. The scenerio goes
something like this: Give pro
fessors tenure and they’re
*
• •ill’
The Capitol Times Friday, September 13. 1985 Page
A powerful combination.
Think business. With
the BA-35 Student Jkmm
Business Analyst. wV
Texas
Instruments
Creating useful products
and services for you.
guaranteed a job for life. They
become lazy, insensitive to stu
dent’s needs, and ineffective.
Further, there is nothing that
can be done by the student to
rectify this. If students have
their way, course evaluation
would be replaced with tenure
review.
In principle, the administra
tion is subsidizing tenured pro
fessors. Students collectively
abhor this practice and
therefore must side with Presi
dent Reagan, in principle, or
abandon their own.
To expand, if one is displeas
ed with a product one should
not repeat purchase. Therefore,
f £: