Speculative corporate takeovers and mergers

(Ref. 308)
Problem Components
Policy issue area: Economics
Policy issue: Management
Description: Actual and attempted corporate takeovers not based on real economic needs or benefits.
Symptoms: Corporate and financial giantism and concentration; payoffs to corporate raiders; loss of jobs due to need to sell off or dispose operations.
Causes: Insufficient rules and regulations to control the activity; a purposefully "hands-off" attitude by the Administration.
Cost of problem: -
Solution Components
Resources: Federal government regulatory agencies.
Goal: Ensure that corporate mergers and takeovers improve the economy and our competitiveness in international trade.
Program area: Economic development
Program-remedy: 1. A regulatory program to ensure that mergers and takeovers will result in a more productive economy
2. Eliminate tax incentives which encourage uneconomic mergers and acquisitions
3. Regulations that prevent the rewarding of speculative takeovers (greenmail, golden parachutes).
Program-prevent: National economic policy that encourages productive investments and economic growth based on profitable industries and enterprises.
Cost of program: -
Beneficiaries: Participants of the economy; workers.

Return to Exhibit H

Return to Contents