Financial Regulation: too much or much needed

I was debating whether to discuss my views on financial regulation or healthcare. Seems to me that the healthcare debate is going to be in the spotlight for a while, so I chose to blog about financial regulation. Not the flashiest topic but one that has had some big news in the recent days. Starting with the news from the great pay czar Ken Feinberg, who is planning to restrict the bonuses that execs can receive most notably from AIG. It is important that the moves are not industry wide only pertaining to companies that received bailout money. I feel this is a huge mistake. Now competitors that are able to lure not only potential talent from AIG but also the talent that AIG currently has. If AIG can not offer competitive pay packages, they will most seriously see a decline in talent, productivity and profitability. This does not really help the US taxpayers get their money back. Why do we not just make AIG back what they owe, with interest? That seems to me the more logical thing to do.

UFC and Org Behavior??

I am sure that many of you are scratching your head on why I am talking about UFC (Ultimate Fighting Championship) on a MBA blog. First, for all of you that do not know what UFC is, it a mixed martial arts promoting the top fighters from all fighting style (kickboxing, wrestling, submission, karate, judo,etc) against one another. They produced a show called the Ultimate Fighter where 16 fighters train and compete against each other for a contract. To say the least I am a big fan of the show.

But how does this tie into organizational behavior. Well, the 16 fighters are split into two teams of 8 each and our trained by a current and successful UFC fighter. And to boost ratings they always find two coaches that have some kind of animosity towards each other (it would not be reality TV without). On the current season, there is a real dichotomy in the leadership displayed by both coaches. In this case both coaches once held the Light Heavyweight Championship. Coach A, Rashad Evans, has a very positive approach to his team. He is always encouraging them, giving them insights, generally fostering a strong team unity. He leans to team first. Rashad is there to pick his guys up after they fail. Coach B, Quentin “Rampage” Jackson is more critical in his evaluations of his team. His approach is to not really train them but to offer information from his experience. He does foster team unity and focuses more on the individual. In many episodes, if his fighter fails he just walks away in disgust.

SO after about 6 episodes in which one member of each team faces each other, who do you think has won the most fights. If you chose Coach A, Rashad Evans, you would be right. Not only has won most fights but as of today his team is undefeated. Is this really that shocking? From our study on positive and negative affectivity, each can have a dramatic effect on work related performance. Coach A is constantly showing his support for his guys, interacting with them, genuinely taking interest in them. Coach B has not developed close ties with his fighters, and many times when they lose he does not even go into the ring to check on them. The show provides a great example how attitudes and personalities can affect work performances.

Corporate Responsibility

I was listening to an interview with Jim Skinner, CEO of McDonald's, and he discussed the importance of corporate responsibility. He blames several of the recent financial blunders on a lack of so called "Doing the right thing" attitude among some corporations believing that self-policing and the want to do the right thing would do more than strict government oversight. I tend to agree with his views, we should be attempting to change the culture of corporate America. I am very afraid that government will pass tough regulation that will prevent business the lee-way to take some risks and stifle their innovation. People like to forget that without corporations Americans would not enjoy the lifestyles that they have today. Government should promote business ethics and reward those companies that do the right thing. While the many financial bailouts were of some necessity, too much of the money went to support companies who failed to the right thing. I would rather see the money go to companies that show responsibility in their actions and a willingness to look past profit margins.

Rush on Ammo

A recent article from the BG Daily News discussed the rising costs of gun ammunition and how it could end up costing taxpayers. If you are not familiar with this issue ever since President Obama took office there has been a big rush on hand guns and ammunition. Many fear that Mr. Obama would tried to pass tougher gun restrictions and would attempt to use back door tactics to eventually seize weapons. Much of this panic is about nothing. Mr Obama and Congress has much tougher policy decisions on economic recovery, healthcare reform and the war on terrorism much less to approach a hot topic as gun rights. However absurd the rumors and fears it has led to one thing; an increase on gun and ammunition sales and the rise on prices as well.

With people spending all their income reserves to buy ammo it is causing some hurt on taxpayers. Police departments and other government agencies that conduct weapons proficiency training are finding it harder to find the right type of ammunition and the prices in some cases have doubled. Here in Bowling Green, the BGPD has started buying extra ammo each purchase to help build a surplus to prevent training stoppage because of ammo shortages. The gun industry has taken advantaged of the irrational behavior of consumers by raising prices, even though the price to make ammo has not gone up.

I am a firm believer in the 2nd Amendment, but find it ridiculous how paranoid people are of phantom legislation. And because of them we must all pay.