Showing posts with label small business. Show all posts
Showing posts with label small business. Show all posts

Wednesday, July 18, 2012

Of Islands and Villages



"No man is an island,
Entire of itself.
Each is a piece of the continent,
A part of the main.
If a clod be washed away by the sea,
Europe is the less.
As well as if a promontory were.
As well as if a manor of thine own
Or of thine friend's were.
Each man's death diminishes me,
For I am involved in mankind.
Therefore, send not to know
For whom the bell tolls,
It tolls for thee."


John Donne
(1572–1631)

That quote by John Donne is one of my favorites, and it was in the spirit of that quote that, I believe, Barack Obama was speaking — at least, at first — when he told small business owners that "you didn't build that."

Just to keep that statement in context, here is the rest of what Obama said last Friday in Virginia:
If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you've got a business — you didn't build that. Somebody else made that happen.

In the context of the workplace, Obama is correct. Unless he/she is self–employed, no business owner is solely responsible for what is done by his or her business. He/she has employees who build the products or provide the services. Everyone does his or her part.

It's a team effort.

And, yes, other people built the roads on which cars and school buses travel. And other people built the schools and churches that shaped us as we grew up — and continue to shape succeeding generations. These things were accomplished collectively through taxes and labor.

Some people don't like taxes of any kind, but taxes are not inherently bad. They pay for essential things from which we all benefit. As Supreme Court Justice Oliver Wendell Holmes Jr. reminded us, "taxes are the price we pay for a civilized society." And taxes have certainly made many things possible for all of us that few, if any, of us could have provided for ourselves.

And, in a larger sense, again, Obama is correct. Most of us had a "great teacher" or a great pastor or a great coach "along the line" who encouraged us and shared with us the knowledge they had acquired in their lives.

That part, I guess, echoes the vision that was articulated by Hillary Clinton, Obama's chief rival for the 2008 Democratic nomination and his secretary of State, in 1996, the year her husband was re–elected president.

The title of her book, "It Takes a Village," was based on an African proverb — "It takes a village to raise a child" — and, while it aroused considerable ire from her husband's political foes (who ridiculed both Clinton and the book's title by saying things like "it takes a village idiot"), it would be difficult to refute the basic premise — that all the people in a community contribute to the upbringing of each child, for good or ill.

(If that had been all that Obama had said, I doubt that anyone would have raised as much as an eyebrow. I have no children of my own, but most of my friends do, and I think nearly all of them would agree that their children are influenced by many people and things outside the home.)

But then Obama said, "If you've got a business — you didn't build that. Somebody else made that happen."

And that was when he revealed himself to be what his most vocal critics have long said he was — a socialist. A lot of people equate socialism with communism or fascism — but that, I suppose, depends upon the extent to which the person (or regime) in question advocates socialism's implementation.

(Great Britain, for example, implemented certain elements of socialism into its national system, but it could hardly be regarded as a communist or fascist society.)

I have no evidence of Obama's ultimate intentions — other than his own words and actions — but his advocacy of collectivism is clear.

The last part of that quote is where millions of business people came to a parting of the ways with Obama. He praised the collective effort but ignored the individual risk in any business, large or small.

Every business has someone who takes the vast majority of the risks. The risk for the employees is relatively minimal, I suppose. If the business goes under, they can file for unemployment and look for something else.

(Not an easy task in this economy, but, after all, millions are out of work in this country at any given time, whether the economy is good or not. The circumstances make it much more difficult, but, as the Greek historian Herodotus wrote, "Circumstances rule men. Men do not rule circumstances.")

But the business owner may have invested virtually everything he/she has.

A business owner may have been inspired by something his high school history teacher said to him when he was 17, but that teacher more than likely risked nothing in the business. (In fact, unless the teacher promoted something akin to anarchy, he/she probably did not put his/her own job at risk — much less create any.)

And paved roads are wonderful for going back and forth to school — much easier on the body and less distracting (and I know whereof I speak because the roads where I grew up were unpaved for many years) — but we all use the roads, not just those affiliated with a particular business.

Paved roads aren't some kind of special benefit for a privileged group.

I have a friend who, along with his wife, bought and runs a birthing center in north Texas.

In an e–mail yesterday, he said to me, "Small business owners make up a huge part of job creation. We only employ 10 people, but we bust our butts to keep them employed and ourselves afloat."

He told me he was "very disillusioned" by Obama's words. And, I suspect, so are many other business owners.

Not everyone was cut out to be an entrepreneur, but if there has ever been a place on this planet where people were encouraged to dream their dreams and take the risks that were necessary to make their dreams come true, it has been America.

Not all of those dreams have come true. But folks with an entrepreneurial spirit have always been encouraged to dream here. It's what freedom and capitalism are all about.

Such dreams took a real beating four years ago when the economy collapsed. At the time, voters were so anxious to be rid of George W. Bush that they paid little attention to — or totally disregarded — Obama's talk of "spreading the wealth around."

My guess is they're paying considerably more attention now.

Friday, January 29, 2010

Somewhere Between Heaven and Hell

We are now about two days removed from the State of the Union speech.

As many have observed, the administration's emphasis has shifted from health–care reform to job creation. As one of the long–term unemployed, that is a priority change that I welcome. I feel it is long overdue.

I have said this many times before, but there is no reason not to say it again at this time. Health care reform is important. It needs to be done. But we have to put people back to work first.

Now, I understand that the government can't create jobs. But it can do things to encourage the creation of jobs.

As the major component of his strategy, Barack Obama has resurrected a promise from the campaign trail. About 15 months ago, when Obama entered the final three weeks of the campaign, he pledged to an audience in Ohio that he would give tax credits to businesses that hired Americans in 2009 and 2010.

But, apparently, the idea was abandoned when it failed to get adequate traction in Washington. I'm not an economist, but I felt, at the time, it was the only really promising proposal for dealing immediately with joblessness that I had heard from Obama. And I was disappointed when it was not included in the stimulus package.

Why wasn't it? I don't know the details. The credit that Obama promised was $3,000. Apparently, that amount was not sufficient. "If you have a company and you're selling fewer shingles, $3,000 isn't going to get you to hire somebody when your sales are shrinking," New York Sen. Chuck Schumer said more than a year ago.

Well, that sounds logical. And that logic seems to have been bipartisan. Both Democrats and Republicans apparently objected to the tax credit proposal.

I don't know if Obama and his advisers dug in their heels to any extent when the subject was being discussed. I don't know how hard they fought for it. But the fact that it wasn't included in the stimulus qualified it as a "broken promise," according to PolitiFact.com.

Did they raise the ante before giving in — even with a proposal of a superficial increase so they could save face and still preserve their political capital for their health care reform battle? Or were they more committed to the idea than that? Did they say, "Well, if the amount of the credit isn't enough, how much would be?"

If they didn't, perhaps that is their strategy now.

I can only assume that this tax credit proposal is an idea in which Obama has some faith because he brought it up again last month in a speech at the Brookings Institution. But, at the time, I heard nothing about the amount of the tax credits.

Well, the inadequacy of $3,000 tax credits once again appears to have been an issue. So now, Obama is proposing a $5,000 tax credit per employee hired. But small business owners again say it isn't enough.

So let me ask you something:
  • If health care reform has been put on the back burner, which apparently it has,

  • and if the focus now is on job creation, which apparently it is,

  • and if Obama is serious when he says that he wants to encourage small businesses to hire the unemployed and he believes in this proposal, which apparently he does, even though it was shot down a year ago,

  • and if this tax credit idea is the most significant weapon he has in his arsenal, which it appears to be,

  • and if small businesses are saying the amount of the tax credit that is being proposed is not sufficient, which apparently they are,

  • why not raise the amount of the tax credit to an amount that will make it worth a small business' time and expense to bring on new hires, even hires who have little or no relevant experience?
Even if it is an amount that, under normal circumstances, would be considered extreme, wouldn't that be preferable to another stimulus package that is loaded with pork?

That's the problem, isn't it? These aren't normal circumstances. I didn't major in economics, but my best guess is that a textbook recession would be one that lasts a few months, unemployment takes a short and modest hit and everything follows a clear and recognizable pattern.

This recession is 2 years old, millions of jobs have been lost and there doesn't seem to be anything remotely recognizable about the pattern that may or may not be leading us into a recovery phase. Contrary to what many economists have said, most Americans say they believe a recovery will not begin for at least another two years.

In other words, we're in uncharted waters here.

To be sure, another stimulus package may yet be necessary. Americans have been through many recessions, and economists may tell you that they follow certain patterns, but each is different, it seems to me, each is one of a kind. It may be mild, it may not. Anyway, this is, by almost every account I've read or heard (never mind my own), the most severe economic downturn that nearly all adults living today have experienced. It may require a unique and extensive combination of measures before it is finally tamed.

Now, correct me if I'm wrong, but isn't the most urgent challenge to encourage job creation? And, apparently, the point behind this particular proposal is to encourage job creation by offering a financial incentive for businesses. But if the incentive isn't large enough, what good is it?

Of course, the greater the tax credit is, the more checkpoints may be required. Every effort should be made to prevent businesses from taking advantage of these credits — and the people they are designed to help.

I believe we should do whatever must be done, spend whatever amount must be spent to put the unemployed back to work. It surely will add to the debt in the short term, but won't that be made up for rather quickly by the increase in working Americans who buy the goods and pay the taxes and are able to be full–fledged contributors to the economy once again?

Won't these job credits help make them better citizens — which, in turn, makes a better America?

Isn't that the ultimate goal?