KEITH CHROSTOWSKI

Business needs to step up, build trust

Updated: 2013-08-06T16:16:50Z

By KEITH CHROSTOWSKI

The Kansas City Star

Trust in government is taking body blows these days.

Government is having immense troubles implementing laws and remedies. It’s beset by swirling scandals, phony or otherwise. It seems it can no longer solve problems.

Are these the symptoms of a government grown too big? That’s now more prone to corruption, breakdowns and just plain stupidity? That’s unmanageable?

I’ve argued that those who believe in big government shoulder a special obligation. It’s not enough just to pass some law or the other. It’s on big-government advocates — oppositional intransigence is no excuse — to make sure government works. It should run efficiently without corruption, cronyism or undue political interference. Remedies must be implemented smoothly.

But a recent Wall Street Journal/NBC News Poll found that just 17 percent said they had a great deal or quite a lot of confidence in the federal government. In 1990, it was 36 percent.

In a recent Gallup Poll, confidence in Congress is at a miserable 10 percent. As the Journal noted, confidence in the presidency is higher at 36 percent, although even that is down from 58 percent a decade ago.

But enough jabbing at big government. Critics of big government should heed this: Confidence in big business isn’t so hot, either.

In June, Gallup found that just 22 percent of respondents said they had a great deal or quite a lot of confidence in big business. A full third said they had very little or none.

Small business does better, gaining the trust of 65 percent, but banks do about the same as big business, at 26 percent.

Confidence in big business almost always lags confidence in government. In the Gallup data, you have to go back to 1999 to find it as high as 30 percent. Before that, the high was in 1985, at 32 percent.

Big businesses have always been viewed suspiciously. In return for helping create the most-prosperous country in the world, improving our lives in countless ways, we accept the bare-knuckled fight for profits that capitalism requires and the great power corporations exert over us.

But a couple of decades ago, journalists and academics began writing that the already frayed “social compact” companies had with Americans was breaking. Executives no longer felt they owed their employees much loyalty, and they began moving factories overseas to tap cheaper labor.

The drive for short-term profits and stock market returns began overriding job creation, workplace and consumer safety, customer satisfaction, you name it.

Then our largest financial institutions (with government help) nearly wrecked the economy.

Through the Great Recession and weak recovery, it seems that big businesses have become especially slow in preserving, not to mention building, the confidence people should have in them.

Despite taxpayer-funded bailouts and stimulus, a critical mass of them come across strangely disconnected from average Americans. And a simple listing from just the last few years of all the big business mistakes, miscalculations, malfeasance and criminality, borderline or otherwise, would fill several pages of this newspaper.

In recent weeks, we’ve seen pressure on big businesses to even pay a living wage. Low-wage workers’s pay has flatlined but median pay for chief executives of top corporations rose 16 percent last year.

The companies say they can’t afford higher wages but complain about lack of demand. But wouldn’t employees earning more spend much of that extra money at their own workplaces?

At a time when many Americans are struggling to find good jobs and coping with flat pay, here’s Caterpillar’s chief executive, Douglas Oberhelman, explaining his company’s pay freeze:

“I always try to communicate to our people that we can never make enough money. We can never make enough profit.”

The New York Times noted that Oberhelman’s compensation has increased more than 80 percent over the last two years.

Big business seems to be running the economy under the equation: Technology plus efficiency equal high profits plus a soaring stock market, which equal a high jobless rate, flat wages for you and high pay for the boss.

This bashing of big business from a business editor certainly appears unsympathetic. But executives should take this as a friendly warning: With all the power and wealth big business and its executives are gaining, they can’t just stand aside from the consequences of income inequality, flat wages and a high jobless rate.

If they do, voters will goad politicians of both parties to tax away their wealth for stronger safety net programs that counteract low pay and lack of jobs.

If big business won’t step up, government will.

Big government.

To reach business editor Keith Chrostowski, call 816-234-4466 or send email to chrostowski@kcstar.com. Follow him at Twitter.com/keithc3.

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