Tuesday, February 10, 2009

Does the government want to trash the businesses it "rescues"?

A true conservative (as opposed to a neo-conservative) will philosophically argue that a government, an entity somewhat immune to business pressures but extremely sensitive to political pressures, is the last entity that should be in charge of a business operation. Because of the non-business attitude of the government, a philosophical conservative would argue that the government would not take the proper actions to maximize business revenue.

Perhaps the true conservative can appeal to Wells Fargo as an example of such behavior.

Wells Fargo is in the business of making money. Provided that Wells Fargo's internal planning is not completely screwed up - which is admittedly a distinct possibility - Wells Fargo is naturally going to take actions that will make money for the firm, both in the short term and in the long term.

One of those actions is to make sure that its employees are intent on making money. To do that, you need to reward high-performing employees.

Politicians may refer to such awards as "junkets." In a Sunday New York Times ad, Wells Fargo disagrees:

"Okay, time out. Something doesn't feel right," the ad begins, before attacking "media stories" for creating the mistaken impression that every employee recognition event is a "junket, a boondoggle, a waste, or that it's for highly paid executives. Nonsense!"...

Wells canceled its major events, such as trips, for 2009, and has received $25 billion from the government's Troubled Asset Relief Program, or TARP.

But the cancellation of those events hurts those Wells Fargo employees who are "most deserving of recognition," such as tellers, personal bankers, operations clerks and credit analysts, the ad says.

The ad attempts to compensate those employees for the thanks they will not receive this year at their canceled events, said Wells spokeswoman Julia Tunis Bernard.

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