Close Close

Regulation and Compliance > State Regulation

Year-End Potpourri

Your article was successfully shared with the contacts you provided.

Once again I wind up the year with a few loose ends that do not provide enough fodder for a full column. Hopefully, this will clean up the business of 2006 so that I can wish each of you a happy holiday season and my best wishes for a terrific 2007.

On several occasions, I have written about my objections to the concept of an optional federal charter. While most of the field people I know are of a similar mind, a few do not agree and have asked for more specificity as to my objections. My main concern has always been the probable loss of the “state action doctrine” which enables the states to provide such things as anti-rebate statutes and replacement regulations. Historical experiences will, I believe, justify this concern.

In 1931, California passed the first fair trade law in the nation. The law provided that manufacturers could set the price for their merchandise and all retailers must adhere to that price. The purpose of the law was to protect small businesses from competition from large department stores that could afford to discount the goods. Other states soon followed with similar laws. In about 1937, the courts struck down such laws as being in violation of the Sherman Anti-Trust Act. A sympathetic Congress quickly passed the “Miller-Tydings Act,” which exempted state fair trade laws–much like the McCarran-Ferguson Act exempted insurance. Over time, the concept of discounting became more prevalent and acceptable, and states repealed their fair trade laws. In 1975, Congress repealed the Miller-Tydings Act, and fair trade laws are now illegal in all states.

I have seen nothing in any of the OFC proposals that would seek to preserve “State Action Doctrine” for companies operating with a federal charter. To have a parallel system with some companies operating free of anti-rebate statutes and replacement regulations while state-chartered companies are still restrained would, I believe, create chaos in the marketplace and perhaps bring pressure to eliminate these rules altogether. I do not believe Congress would be as sympathetic today towards price stability as it was in 1937. I’m certain that would be the case with Sen. Trent Lott, R-Miss., who has vowed to repeal McCarran-Ferguson. This is not a good time to give him more ammunition.

I don’t normally get involved in politics in this column, but I feel that I have license to do so in response to Steve Piontek’s November 13th editorial, entitled “‘S Wonderful.” Steve’s exuberance over the election of Democrats to control the Senate and House was overflowing, to say the least. I will no doubt hear from those who share his enthusiasm for the new order–but what the heck–here goes.

One of the great thinkers of the ancient world, Aristotle, observed in the 4th century B.C.: “He, who has never learned to follow, cannot be a good leader.”

For the past six years, Democrats in Congress have been miserable followers. For almost all of this time, they have whined about lost elections and griped about tax cuts that pulled us out of the recession President Bush inherited, doing so in the shortest time on record and continuing to provide a robust economy. In my opinion, their leaders have voted against major security initiatives to protect the country, blocked vital appointments and undermined the President in foreign affairs, ultimately making diplomacy more difficult.

Well, the negative climate they helped create has worked well for them politically, and now they have to play the role of leaders rather than followers. So now we will find out whether Aristotle knew what he was talking about. For the good of the country, I hope he was wrong and that Steve can be justified in believing “‘S Wonderful”. For the record, I’m with Aristotle.

For my final tidbit, I would like to offer kudos to Arizona State University for creating the first university-certified course in “selling.” Not marketing, not communications–but real honest to goodness selling. A lot of other universities have courses in selling, but they are always connected to an outside institute.

The driving force behind this is Jim Kaiser, who graduated from ASU with a degree in Organizational Communications. When Jim embarked upon his first job as a salesperson, he quickly learned he knew nothing about how to sell. He didn’t have a clue as to what a “cold call” was. Fortunately, he rebounded from a dismal start and went on to a very successful career, and in the process, developed a healthy respect for the science of selling and an understanding that not much happens until a sale is made.

This is a pet theme of mine, for no matter what we call ourselves or how we describe what we do, in the final analysis we get paid for making a sale. The CLU designation attests to the fact that you have the tools of the trade; MDRT membership demonstrates that you know how to use them.

An objective of the new curriculum is to raise the standards of selling and establish it as a more respected endeavor. In that respect, ASU has come a long way. Some years ago, ASU offered a course in finance and insurance, and a few other local agents and I served on an advisory committee for the course. At one of our meetings, the Dean of the School of Business complained that after giving their students an education in insurance, the companies hired them to be “just an agent.” Hopefully, the course in selling will dispel such notions.

Again-have a great year!


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.