Not Knowing is Not Good

“Did you ever hear the statement that, ‘China has a 50 to 100 year [sic] view on management of a company, whereas we run our companies on a quarterly basis???’ Not good!!!!”[1] – Donald Trump

This essay is about the validity of the argument above. It is not about the issue in the main which is the question regarding the interval of time for filing corporate financial statements. The argument above suggests that the president’s logic is thus: China’s way of governance over corporate information is good and thus it must benefit the economic system. Since that economic system includes a procedural view on management that is longer than ours, it is a good procedure.

But what if that procedure, that length of time for corporate reporting would not benefit the greater economic system that we have, even if it does benifit China's? And if China doesn’t have a better one, why is he trying to get us to model ours after it? Also, there is no evidence that China's economy is more desirable, especially if that means building buildings that easily fall down[2] and have horribly unhealthy air[3] to breath. Maybe that’s why there is so much more corruption and human rights issues in China – not enough view on the segment of systems management that is already partly hidden because it is hidden.

But what the logic of the argument really says is that if you haven’t heard of the statement “China has a 50 to 100 year [sic] view…” if you haven’t heard that, then not good for you!!!! I think that’s four official presidential seals of disapproval for not knowing -- Really not good, i'm sure. That is to say that the argument above is not related to any argument about the length of time as it primarily argues what type of person one is depending on whether or not they have heard the quote about a procedural difference in a different economic system that is not necessarily desirerable considering how Americans like to live their lives. Simply not knowing about a different system is the simple ignorance everyone has about some aspect of the world, but stupidity is justifying something becasue you haven't heard of it.

[1] Trump endorses dramatic shift to the US economy | CNN Business
[2] Sichuan schools corruption scandal
[3] What does the climate crisis have to do with corruption?

Further Reading & Research

Why we shouldn't just switch to a forign policy model, especially China's

A strong argument against the U.S. adopting a 50-year business reporting model is that this idea is based on a fundamental misrepresentation of how business is conducted and regulated in China. China does not have a 50-year reporting interval; in fact, its companies typically report financial results on a quarterly basis, similar to the U.S.[1]

The idea of a 50-year reporting cycle was recently brought into the public debate by former President Donald Trump, who used the idea to suggest that U.S. businesses operate on a shorter timescale than their Chinese counterparts. However, the premise is factually incorrect and ignores the benefits of regular, transparent financial reporting.[2]

Arguments against extremely long reporting intervals

In addition to the flawed premise, there are several strong arguments against such a long reporting cycle:

• Lack of transparency and accountability: Infrequent reporting would severely limit the public's and investors' insight into a company's performance, financial health, and risks. This lack of transparency undermines accountability and makes it more difficult for investors to hold management responsible for poor performance.

• Market instability and insider trading: Financial markets rely on timely information to function efficiently. Removing regular reporting would create long gaps between official disclosures, which could lead to extreme market volatility as investors rely on rumors and speculation. It would also dramatically increase opportunities for insider trading, as management would have exclusive access to financial information for extended periods.

• Misallocation of capital: Accurate, timely financial reports enable analysts and investors to compare companies and allocate capital to the most productive and promising businesses. A 50-year reporting cycle would make this comparison impossible, preventing investors from making informed decisions and hindering the market's ability to efficiently direct capital.

• Poor internal decision-making: Infrequent reporting would also be detrimental to a company's internal management. Regular, shorter cycles help management monitor progress toward goals and adjust strategy quickly. Waiting 50 years to assess results would prevent companies from identifying and correcting major issues before they cause catastrophic damage.

• Damaged credibility and increased risk: A massive reduction in reporting frequency would harm the credibility of U.S. financial markets, making them appear opaque and risky to global investors. This could drive capital away from the U.S. and into more transparent and reliable markets.

What is the actual debate about?

The actual discussion in the U.S. is not about eliminating reporting for decades but about the pros and cons of moving from quarterly reporting to a semi-annual (six-month) cycle.

• Proponents of less frequent reporting argue it would reduce the pressure on companies to focus on "short-termism"—making decisions to meet quarterly earnings expectations rather than focusing on long-term growth and innovation.

• Opponents of less frequent reporting, including many investors and market analysts, believe it would significantly reduce transparency and harm market stability. They argue that regular reports are essential for accountability and for providing investors with the information they need to make sound decisions.

[1] Why Trump’s push to scrap quarterly earnings caused Wall Street to ‘freak out’

[2] Quarterly or No? How to Argue About the Frequency of Financial Reports - Barron's

An argument for changing U.S. business reporting intervals to very long periods, like 50 to 100 years, is that it would force an extreme shift in corporate focus from short-term profits to long-term sustainable growth. However, this is a theoretical argument that would face severe consequences in practice and is not seriously proposed by any major figures or organizations. The discussion in the U.S. capital markets is about reducing quarterly reporting to semiannual, not eliminating real-time transparency for decades at a time.

The central argument for longer reporting intervals

The primary argument for reducing reporting frequency centers on counteracting "short-termism" in corporate management. By removing the pressure of meeting or beating quarterly earnings estimates, the theory suggests that executives would focus on decisions that create sustainable, long-term value, even if those decisions negatively impact short-term performance.

This shift could, in theory, encourage companies to:

• Prioritize long-term investments in research and development and innovation.

• Focus on strategic goals rather than short-term market reactions.

• Lower compliance and auditing costs associated with frequent reporting.

• Avoid making operational decisions solely to manipulate quarterly results.

The case for 50- to 100-year intervals

The idea of a "50- to 100-year view" on corporate management is sometimes used rhetorically to contrast long-term strategic thinking with the short-term mentality of quarterly reporting. The argument to adopt this ultra-long reporting cycle would be an extension of the short-termism critique, but taken to an extreme. It would imply a radical departure from the current system to force a multi-generational, sustainability-focused mindset on companies.

Why this argument is purely hypothetical

While the underlying critique of short-termism is part of a real policy discussion, a change to 50- or 100-year intervals is not. Such a proposal would lead to impractical and dangerous consequences for the U.S. economy, which is why it is not under serious consideration.

The most significant issues with such a change would be:

• Loss of transparency and accountability: Public companies would operate with little to no public scrutiny of their finances for generations. This would erode trust, increase opportunities for fraud, and hide problems from regulators.

• Massive risk for investors: Without regular updates on performance, investors would have no basis to value a company or make informed investment decisions. This would paralyze the public markets.

• Inability to attract capital: Companies would find it almost impossible to raise money in the capital markets, as no investor would risk their capital on a company that withholds financial information for decades. The capital formation that drives the U.S. economy would stop.

• Increased insider trading: Company insiders would be in a uniquely privileged position, holding critical information for years before it is made public. This would increase the potential for illegal and unfair trading.

• Elimination of market discipline: The U.S. financial markets rely on regular reporting to impose discipline on management and hold them accountable. Without this, poorly managed companies could coast for years without consequence.

The forign policy model that China is using is what our economy needs.