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This week President Obama was in Wall Street, New York making a keynote speech on the need for regulations in the money market. Obama made major comments on the way business was done on Wall Street to the dismay of some key stake holders. Actually, many have come out strongly in opposition to his proposed government regulation in the economic sector. But I believe what Obama said was very important if we are to avert what happened after the collapse of the Lehman Brothers last year in September. While regulations cannot stop a recession from happening again, I believe they will reduce the risk factors. Some of the things highlighted in the President’s speech, were the abnormal salaries paid to the executives while at the same time enjoying tax cuts. Also, high risk investments by bank ventures and lending too much with very little interest rates that cannot be self sustaining have negatively exposed the economy. The President also commented on how firms and companies have gone into borrowing high amounts of money without sound asset base to act as collateral hence exposing investors’ money unfairly. These are the reasons why the economy is in such a dire state coupled with the high government expenditure in fighting terrorism in Iraq and Afghanistan. Government measures should include reducing executives pay cheques, while at the same time equalizing taxation. This will demonstrate fairness and at the same time allowing everyone to bare the burden of taxation equally. Banks and major corporations must be forced to change and embrace sound management practices and hence avoid high risk lending, borrowing and investment. This will help the economy to stabilize and more importantly we need to move from a credit based economy to a saving based economy (where cash is king, not credit). I believe President Obama is right on this one. Stephen is an business management expert. He researches and studies on big and small business strategies . Website: Business Management Strategies for efficient business operations.
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taxation, president obama, credit, economy, management, investment, money, cash, corporation, asset, investors, recession, obama, saving, wall street,
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