Daily Archives: October 18, 2010

When A President Suffocates American Business

It started out with Ken Langone, one of the four partners who created Home Depot in 1979.   Langone, the third generation grandson of immigrants,  helped build I-495, the  Long Island Expressway through New York, as a construction worker.  Years later, he rose to become the director of the New York Stock Exchange.  His experience in construction, the desire to bring quality do-it-yourself materials to the public affordably with his partners, saw Home Depot sprout up across America.  

Despite the challenges that face business start-ups, Home Depot flourished.  Nowadays, Langone believes the burgeoning regulatory environment and policies raining down on business directly out of Washington D.C., are choking the entrepreneurial spirit.  The one that sustains America.  He addressed his concerns to President Barack Obama, after his response to him at a recent town hall meeting.   

Stop Bashing Business, Mr. President.  WSJ. 

For more than two years the country has listened to your sharp rhetoric about how American businesses are short-changing workers, fleecing customers, cheating borrowers, and generally “driving the economy into a ditch,” to borrow your oft-repeated phrase.

My question to you was why, during a time when investment and dynamism are so critical to our country, was it necessary to vilify the very people who deliver that growth? Instead of offering a straight answer, you informed me that I was part of a “reckless” group that had made “bad decisions” and now required your guidance, if only I’d stop “resisting” it.

Your insistence that your policies are necessary and beneficial to business is utterly at odds with what you and your administration are saying elsewhere.

That short-sighted wavering—between condescending encouragement one day and hostile disparagement the next—creates uncertainty that, as any investor could tell you, causes economic paralysis. That’s because no one can tell what to expect next.

Indeed, businesses flourish when steady and supportive business policy flows from the government.  For any type of work to thrive, a complementary environment is requisite.  Businesses already must adhere to a host of rules and regulations and pay taxes in various forms, to remain law-abiding and in compliance.  But they must also be profitable to sustain employees and improve and expand the business.  Dedication to the goal of making a business successful is fundamental.  Experience can accelerate and expand the peaks, and lessen the troughs in any line of work, by minimizing poor and costly decisions to the organization.  Thus, experience is a critical factor in a successful business.   

Let’s go back to assess that executive experience that Obama proclaimed while campaigning in 2008.  The experience he believed was sufficient for leader of America.  In fact, his expereince was that of community organizer for the likes of ACORN.  Fresh out of law school, Bill Ayers, the self-admitted terrorist of the Weathermen Underground that was responsible for bombings of federal buildings like the Pentagon, the U.S. Capitol, and others, hired Obama for his brainchild of the Chicago Annenberg Challenge.  Recall, CAC was a public school reform project of the late 1990’s designed to improve educational achievement.  Obama was in charge of the grant process to make sure the goal was met?  So did public school students improve achievement?  Did Obama at the helm of  a near $100 million granting project, take money and translate it into tangible education improvement?

Obama’s Challenge.  NRO. 

The Chicago Annenberg Challenge stands as Barack Obama’s most important executive experience to date. By its own account, CAC was a largely a failure. And a series of critical evaluations point to reasons for that failure, including a poor strategy, to which the foundation over-committed in 1995, and over-reliance on community organizers with insufficient education expertise. The failure of CAC thus raises entirely legitimate questions, both about Obama’s competence, his alliances with radical community organizers, and about Ayers’s continuing influence over CAC and its board, headed by Obama. Above all, by continuing to fund Ayers’s personal projects, and those of his political-educational allies, Obama was lending moral and material support to Ayers’s profoundly radical efforts.

Do not forget Obama and Ayers Pushed Radicalism On Schools.  WSJ.  He did cut his teeth working with ACORN after graduation from law school.  Recall, instead of seeking legal work on Wall Street like many of his Harvard Law School graduates, he instead chose to pursue community organizing in Chicago.  Business acumen likely benefits those who choose the business avenue, which can translate into effective real world results, particularly in the high stakes Wall Street environs.  Obama wove himself into the fabric of community organizing such as ACORN, where it is easier to hide and camouflage performance amongst many, without the overhanging responsibility of delivering results.    

Mr. Obama once conducted “leadership training” seminars with Acorn, and Acorn members also served as volunteers in Mr. Obama’s early campaigns. External partners like the South Shore African Village Collaborative and the Dual Language Exchange focused more on political consciousness, Afrocentricity and bilingualism than traditional education. CAC’s in-house evaluators comprehensively studied the effects of its grants on the test scores of Chicago public-school students. They found no evidence of educational improvement.

$100 million of someone else’s money is a a substantial amount to be investing without demonstrating tangible results.  A businessman with investors must demonstate positive results to people who have put their own cash on the line.  But the disconnect  between understanding basic economics and responsible stewardship of other folks’ cash is crystal clear. 

Linda Chavez: Obama has no clue about entrepreneurship.  WE. 

The “shovel-ready” comments were all salesmanship and no substance.

The president’s problem is that he has neither experience in, nor understanding of, the private economy. He has worked exclusively in the nonprofit and government sector.

When entrepreneurs fail, they’ve lost their own money and that of investors who have freely chosen to take the risk.

Government programs, however, play with other people’s money — since government has no money of its own. When government programs fail, the consequences aren’t born by the people making the decisions but by the taxpayers.

When you have your own skin in the game, there is a vested interest in delivering high-yeilding performance.  When it is someone else’s money, it is very easy to throw caution to the wind.