The Anti-Business Mind-Set

Editorial
Copyright 1999 Investor's Business Daily
September 21, 1999

To hear some politicians and reporters, all businesses want to do is rip people off, and in some cases let them die - all to make a buck. Too often, businesses cave in to this portrayal by leaving it unchallenged. It's encouraging to see, though, that some are fighting back.Take the case of an anti-business bill awaiting the governor's signature in California. Democratic members of California's legislature rammed through, without hearings, an 11th- hour assault on so-called big-box stores like Wal-Mart and Costco.

Dreamed up by unions and the superstores' rivals, the bill would outlaw stores of 100,000 square feet or more if 15,000 square feet were devoted to nontaxable items such as groceries and prescription drugs.

The unions don't like the superstores because workers there have resisted unionizing efforts. And rivals don't like the competition.

They cast Wal-Mart and Costco as big business intent on ripping off consumers and workers alike.

No matter that these stores offer groceries at lower prices than their rivals (most of whom are big chains themselves). No matter that workers there are glad for the jobs they hold. They're big business and therefore bad.

Thankfully, these companies don't see themselves in that light. They've taken out full-page ads in papers throughout California making their case. And there are signs this campaign is working. Sources close to California Gov. Gray Davis, a Democrat, say it's unlikely he'll sign the bill.

The outcome of another case is harder to foresee. But it still involves the same anti-business mind-set.

Suzuki and Isuzu are suing the publisher of Consumer Reports magazine for a combined $ 50 million in damages after the publication rated their sport-utility vehicles' safety as "not acceptable."

The companies charge that the magazine's parent group, Consumers Union, deliberately changed the way it tested the SUVs to produce the rating. They say the magazine faced lagging sales and needed a controversy to help fund a new testing center it had built. They say the magazine has cost them $ 500 million in lost sales.

The magazine, of course, says it's only reporting objective criteria and is urging the court to dismiss the case before trial.

Judges in the cases could decide this week on whether they'll go to trial. We hope they do. Consumers Union has long distrusted free markets - its founders were Marxists. It needs to be reminded that businesses need to cater to consumers if they want to make money, not let them die.

We'd like to see more companies take a stand against the mind-set that business is evil. Caving in and settling court cases to make the perceived problem go away may be cost-effective in the short run. But in the long run, such timidity just reinforces the anti-business mind-set.