Hattie Stimson
Hello Stimson,
In your post, you offer a substantive discussion on the numerous tools that the governments can use to shape the operations and performance of businesses. Among the tools that you address include promoting political stability and influencing tax policy. I agree that these interventions enable the government to define how firms operate. However, I feel the need to add that it is rather difficult to determine the particular effect that the measure that the government adopts will have on the market. For example, recently, as part of efforts to enhance the competitiveness of American businesses and industries, the Trump administration introduced tariffs on imports from countries like China. While the tariffs made Chinese imports more expensive, they also exposed American businesses to the threat of harmful Chinese tariffs (Cheng, 2019). I think that before implementing a measure, the government should conduct a thorough evaluation. Only after it has determined that the measure will not hurt businesses should the government proceed with implementation. Regarding political stability, I agree that a stable political climate fuels businesses. However, I think that it should be noted that the government is just a single stakeholder. Maintaining political stability demands full commitment from various stakeholders. Businesses are among these stakeholders. For example, firms could work closely with communities to promote social cohesion. They should not leave it to the government to guarantee stability.
In addition to the issues addressed above, you also explore how the government affects businesses by setting interest rates. I concur that interest rates are among the tools that the government relies on as it seeks to ensure that firms operate properly. However, personally, I feel that governments should not become involved in setting interest rates. They should leave this job to such independent bodies as the Federal Reserve. Recently, the Trump government has been embroiled in a conflict with the Federal Reserve regarding interest rates. While the government wants the interest rates kept low, the Federal Reserve insists that the economic conditions are ideal for raising the rates (Fleming, 2019). I fear that the spat between the two bodies threatens the American economy. It creates uncertainty, thereby making it difficult for firms to conduct their businesses properly. I would strongly encourage governments to avoid politicizing such matters as interest rates and instead act in a way that serves the nation’s best interest. In closing, I am in agreement that the government influences businesses. However, I maintain that governments should act soberly and avoid bullying businesses. Instead, they should pursue policies that help firms to thrive.
Delegate your assignment to our experts and they will do the rest.
References
Cheng, E. (2019). American businesses in China: tariffs are hurting us. CNBC. Retrieved June 6, 2019 from https://www.cnbc.com/2019/05/22/trump-tariff-increases-hurting-us-businesses-in-china-survey-says.html
Fleming, S. (2019). Federal Reserve to defy Trump and hold rates steady. Financial Times. Retrieved June 6, 2019 from https://www.ft.com/content/6120a9f6-6b9b-11e9-80c7-60ee53e6681d
Karen O’Donnell
Hi Karen,
As part of your efforts to demonstrate how governments affect businesses, you offer the example of Amazon’s failed bid to establish officers in New York City. In your discussion, you note that the bid failed because Amazon failed to gain the support of local leaders. Personally, I think that the situation was a lot more nuanced than you present it. For example, as Sherman (2019) reports in his coverage of this issue, Amazon and government officials engaged in secret discussions. Instead of involving the people of New York who would be impacted by the deal, the two parties chose to betray the principles of integrity and transparency. I endorse the decision by the local officials and the people of New York to denounce and reject the deal. The primary mandate of the government is to represent the interests and advocate for the welfare of the people. While I agree that the Amazon deal would have created thousands of jobs in New York, I think that ultimately, this deal would have had a damaging effect overall.
In their text, Thomas and Maurice (2016) note that regulation is among the tools that the government employs as it influences private commerce. Among the most important points that this duo makes is that through regulation, the government balances the interests and rights of different stakeholders. I think that the issue of regulation and the impact that it has on business is echoed in the case of Amazon and New York City. I feel that had the deal been approved, the people of New York would have suffered. For instance, Amazon has a poor record regarding the treatment of its employees. It pays them poorly and forces them to work in deplorable conditions. These problems would have been reported in New York had the company been permitted to build its offices in the city. Therefore, I find that by rejecting Amazon’s bid, the local officials safeguarded the interests of New York City residents. Other government officials and agencies should follow the example of these officials. While they should take all necessary steps to create environments that enable companies to flourish, the officials should ensure that business success is not achieved at the expense of the welfare of the public. More importantly, I think that governments need to protect the environment. The US has entered a new era where the environment is being sacrificed for the pursuit of maximum profit and business success. I believe that I am not alone when I say that we need officials and agencies that will say no to business and political corruption and yes to environmental conservation.
References
Sherman, E. (2019). The real problem with the Amazon and New York deal. Forbes. Retrieved June 6, 2019 from https://www.forbes.com/sites/eriksherman/2019/02/18/the-real-problem-with-the-amazon-new-york-deal/#77c9391d7d79
Thomas, C. R., & Maurice, C. S. (Managerial Economics: Foundations of Business Analysis and Strategy - 11th ed. McGraw-Hill/Irwin
