20 November 2011

Business or Politics - Which Makes the Biggest Difference?

Want to know one reason that daily papers face diminished readership? They focus on what the average person knows to be issues of diminishing returns.

Imagine someone making $40,000 a year.

In one scenario, they get a new president who lowers their taxes by 2 percentage points.

In another scenario, they get a new CEO who raises their salary by 2%.

The impact on after-tax income in the first scenario is about $100. The impact in the second is nearly $700.

And this does not even delve into the myriad policies changes having to do with issues like leave time, opportunity for advancement, equity sharing, and the ability to influence the (positive or negative) impact on the community.

Throughout the West, changes in management and policy at the level of employer will make a bigger difference than changes at the government level. And this belief about the diminishing returns to a focus on government policy vs. the advances that could accrue from a focus on corporate policy is one of the reasons that I wrote The Fourth Economy.

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