Monday, May 17, 2010

Top Down Management

In business, top down management almost never works, at least not as planned. Anyone who has worked in the corporate world for any time at all knows the brightest minds are not in home offices . . . they are in the field, taking the pulse of the client base.

But Washington either never learned this (not surprising) or simply doesn't care.

You pick.

The latest DC saga comes in the form of, "I'm from the IRS and I am here to help you".

Yeah, that's going to work real well.

The AP reports the IRS is going to launch a campaign to "sell" small business on the idea of providing group health insurance for their employees and taking advantage of the (for a limited time only) tax credit.

The White House estimates up to 4 million small businesses may qualify for the tax credit, but it's not clear how many will be eligible. To begin with, they have to provide health insurance — and many small employers don't. To qualify, companies must pay at least 50 percent of their workers' premiums.

Other than the fact that very few business owners trust Washington, coming up with the cash to fund health insurance is a problem during this deep recession. Tax credits are only meaningful if you have enough revenue to add the expense and headache of providing health insurance for employees and their families.

I wouldn't expect DC to understand that given their track record.

Go back a dozen years or so and Washington decided it was a good idea for everyone to own a home, and pressured banks to make loans to people regardless of their ability to actually, uh, qualify for the loan.

We know how well that worked.

More recently we had Cars for Clunkers. This one worked so well the program ran out of money in a few days and Congress had to refill the coffers with money they didn't have.

But why wouldn't it work when you can trade in a car worth $500 and get $4500 in trade in value?

Following the banking collapse and unconstitutional bailout, Washington once again flexed their fake muscles and demanded that banks resume loans to businesses in order to spur the economy.

What they failed to take into account was a lack of demand for loans, based on the sluggish economy.

Still, that didn't stop Washington from kicking the dog because banks weren't loaning money.

Now we have the oil rig flambe' in the gulf and Washington believes all you have to do to fix the problem is berate the oil company that owns the rig.

Somehow this management style isn't working.

I could be wrong, but I don't think a sales pitch from our buddies at the IRS is going to make businesses suddenly buy group health insurance.
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