If you were great at the Monopoly Game would you bet your paycheck in a Friday night Monopoly Game with friends? If your answer is yes, then would do the same thing if that game was played with no rules at all?
In the U. S. business world, the reason for studying business in school is to learn where to find the business rules. There are key places where they can be found, with a partial list below:
Common business practices; Traditions;
Commercial Law; Contract Law; Common Law; Constitutional Law;
Federal and State Agency regulations;
Bankruptcy Law.
The above list is only a hundredth of the various locations of the business rules one should strive to operate within that is controlling the true to life business racket.
But today we are seeing a two tiered legal system that has been forced on us that is still changing every day, as we usher in Communism to replace our dying Capitalist system. In prior years one could somewhat predict the outcome of contemplated decisions by studying the business rules. But this is no longer possible as we enter an uncharted lawless, openly corrupt, systems. It now becomes impossible to predict outcomes.
Let’s look at just one case study. Yesterday we were reminded that the Target Board of Directors will be sued as a class action suit against them by all shareholders for the shareholders loss in value of their stock. Why? Because the Board has a fiduciary duty to advance the corporation profits and protect the stockholders; period, they represent the stockholders. So how can the Board remain on track to destroy the Target stock values in order to appease a handful of non-stockholders that can’t clearly see what’s between their legs?
1. In the normal business world, a major Insurance company provides insurance protection for the Board from stupid decisions like this.
2. The Insurance company will provide expensive legal services to protect the Board, paid up front by the Insurance company.
3. The lawsuit will drag on for a few years.
4. The insurance company will raise their monthly rates to be paid over several years, so Target ultimately pays for all the costs in the form of future insurance.
5. Ultimately, the Insurance company is a finance company lending Target money and collecting it back over future years along with a healthy profit for the insurance company.
6. But what if Target goes totally out of business? This means that the Insurance company just lost their “investment”.
7. If Target goes out of business will the insurance company continue to protect the Board of directors?
8. Meantime, the Board members must go through the collapse and depression not knowing if they are protected from a huge lawsuit. But also in the meantime, the Directors have lost the value of their personal stocks that plummeted.
9. My ultimate question is how should the Insurance company calculate their own net worth? Should they reflect a potential loss if Target is forced out of business? If yes, how should it be computed?
10. Now go back through points 1 through 9 and consider that traditions and law precedents are no longer carrying the weight they once demanded. One paid for judge can destroy that old predictable path.
Folks, what we are witnessing is the breakdown of not only small businesses but the large ones as well as they too can no longer predict the future.